14x11 - Episode 11

[bunniefuu]

Narrator: Tonight, Tony Xu,

founder of the largest food
delivery platform in America,

DoorDash, joins the t*nk.

My entire entrepreneurial career

is figuring out how to
get mass distribution.

We like to say that the
mosquito is our state bird.

Reimagines the ancient
wisdom of my heritage.

We're looking for somebody
that might want to show the world

how Metric Mate works.

-That would be Mark. -[ Growls ]

We actually have 700,000 customers to date.



I didn't expect that.

We're positioned to
change this industry entirely.

Let's reinvest back in the
business and let's go for.

No way. Okay, I gotta
call a little bit of BS there.

You're the biggest blood
-sucking thing up here.

I'm gonna DoorDash
up to you guys right now.

Damn!

♪♪

Narrator: First in the t*nk

is a product line to protect
you in the great outdoors.

♪♪

Hey. My name is Nichole Powell,

and I am seeking $250,000
for 5% of my company.

Sharks, I grew up in Minnesota,

where we like to say that
the mosquito is our state bird.

[ Laughter ] So...

you can say I know a thing
or two about bug spray.

Every time we would go outside,

my parents would cover me and my brother

with icky, sticky bug spray

and coat us in greasy chemical sunscreens.

Ew.

Years later, I realized I was
still using those same gross,

artificial and environmentally
unfriendly products.

And that is why I created Kinfield,

the modern outdoor brand
that is leading the revolution

with clean bug sprays that work

and sun care the whole family will love.

Our first product was Golden Hour.

It's a DEET-free bug repellent

made with citronella,
lemongrass, and vanilla

to keep those pesky mosquitoes
away and smell amazing.

Since then, we've launched a
biodegradable repellent wipe,

recovery products,

and a line of innovative
mineral sunscreens.

So, Sharks, who's ready to build a bug-free

and sun-protected future with me?

In front of you are some
of our best-selling products,

including our full bug and sun line.

This is an entire line, you said,

of sunscreen mixed with bug repellent?

No, they're separate products.

Okay. So the orange
products that are in front of you

are part of our bug line.

Your bug repellent smells so good.

I'm surprised you don't attract the mosquitoes.
Yeah, it doesn't smell like bug repellant.

And how does it compare against DEET,

in terms of preventing the
mosquitoes from biting us?

So we had the
protectiveness of our repellent

verified by an independent lab.

The test results showed
us that our bug repellent

has an average of 3
hours of protection time.

How did you come up with this idea?

I went to Indonesia.

It's an absolutely beautiful country.

But the combination of the
heat plus the rice paddies

means that it is an
absolute mosquito paradise.

And it was while I was there
that I actually came across

this strain of citronella that we now use

for our bug repellent.

Okay, so, $250,000 for 5%

Imputes... imputes a $5 million valuation.

So you better have some sales.

So I launched the brand
in the summer of 2019.

We did $45,000 sales.

Okay.



All direct to consumer?
Was all that through retail or...

Almost all of that was online.


-Yeah. -There we go. -All right.

Did you make any money
in any of these years?

Not quite yet. '22?

So, 2022, thus far this year,

we've done $1.5 million in sales,

- Good for you. -Good for you.
- And we are on track

to do $2.1 million this year. Do you think
you'll make money on the $1.5 million?

We will not make money yet.

We're positioned to be profitable

in about a year and a half.

H-How much are you spending on marketing?

So our customer acquisition
cost right now is about $26.

Oosh. Okay.

What I'm trying to
figure out, on every sale,

are you losing or making money?

You told me $26 for
customer acquisition costs.

I don't know your average
margin across the product line.

What is it? The products
in front of you now

are between 79% and 85% margins.

Golden Hour costs us about $4.53 to produce

and we retail that for $22.

Cloud Cover, our body sunscreen,

this one we pay $5.04,
and we retail it for $34.

What's the average sale, then?

Our average order value
on our website is $45.

So $45. Nichole, where
are you selling your product?

So about 80% of our customers
buy directly with us online.

But I still believe that being
in both dot-com and in retail

is important to building
a healthy business.

Why... Why do you feel that way? But... But
it seems like you're growing so quickly.

I mean, Nichole, do you need to do that?

I mean, you're controlling your own
destiny right now. We absolutely do.

We absolutely do. And here's why.

You need to have the convenience.

There are things that you need
because you're going outside.

You have a park picnic this weekend.

And so retail has to
be a part of our journey.

You're gonna be losing
money in retail, won't you?

Not necessarily, because w...

Not necessarily is a
whole lot different than no.

You still have the distribution cost.

You have the marketing support cost.

You have to advertise more, not less.

It's the fact that you're gonna
have to raise a lot more money

for your R&D, for inventory,
for scaling, for advertising.

Based off the deal you're offering,

we get diluted to nothing, right?

Not necessarily,

because alongside raising investor capital,

we're also doing lines of credit.

How much debt do you have right now?

Less than half a million. Half a million.

Okay, well, that's real. It varies by
month depending on what we're paying.

Look, you're very, very, very impressive.

But when it's all said and done,

where we'd start versus
where we'd end up...

I just don't see it.

So for those reasons, I'm out.

Nichole, I'll make you an offer.

Thank you.

I'll give you $250,000 for 10%.

And I hate to say it, but I want
a $2 royalty per product sold.

Oh! Mm.

Oh. Savage. Until it's paid back, only.

Thank you for your offer.

Well, now that we're
throwing royalties around...

Oh, Mr. Royalty. Yes, exactly.

I'll do the $250,000 for 5%,
but it can never be diluted.

In other words, Mr. Wonderful
always gets his 5%.

And I will also put a royalty on it.

But not as greedy as Barbara.

I'll do $1.50 per unit

until I get back $750,000.

I'm tempted by your sales

and your spectacular presentation.
That's like a double ratchet, Kevin.

Greiner: I mean, if there's anybody up here

that knows how to sell a mosquito product,

it's me. Thank you, Lori. It's me.

Well, you're the biggest
blood-sucking thing up here, but...

He has more in common
with the mosquitoes, right?

That's why I know this product line.

We're trying to get rid of bloodsuckers.

Okay. I did Bug Bite Thing.

Within a couple of years,
we did $25 million in sales

and we're in 30,000 stores. Wow.

And we've had offers to sell already.

So, here's my offer.

I'm gonna give you the $250,000.

I'm only gonna take 5%, but
I am going to want a royalty.

I'm going to want $4 per the item sold

until I get... Damn!

-Wow! -Wait. Wait. Listen.

Whoa! Until I get my money back.

Just till you get the money back? That's
almost as blood-sucking as Kevin's offer.

Until I get... It's not. It's not.
Let me rephrase how a royalty...

When someone asks for a
royalty only until I'm paid back,

that is the equivalent saying,

"I don't really want to
give you any money."

No, it's not. Of course it.

It's just, "Here's my money, you give it
right back." No, I'm gonna... Mark. Mark.

You're not giving an
offer, so you should just...

I'm just telling you how royalties
work... you know, sit there and be quiet.

Alright, Lori, why don't you finish
the offer? So let me explain to you

why I would do that.

I don't want to work for
free for the next three years,

for maybe down the road when we sell it,

I'm more than worth it.

O'Leary: Well, congratulations, Nichole.

You have three offers. Thank you.

They're all commensurate
with the risk. Corcoran: Nichole.

Nichole, I'm gonna add one more offer

into the... into the mix just because...

Oh, wow. Oh, Tony.

♪♪

♪♪

Narrator: One Shark is out.

Nichole has three offers on the table

for her clean bug repellent
and sunscreen line Kinfield,

but they all involve a royalty.

And Tony may also be interested.

Nichole, I'm gonna add one more offer

into the... into the mix just because...

Corcoran: Oh, wow. Oh, Tony.

While there are obviously
gonna be challenges

heading into retail,
especially as we think about

how to grow this business,

I actually think that this
business is gonna be

worth quite a bit.

So I actually want to be
with you more for the equity

and not really try to take
money away from you.

My offer is $250,000, 10%.

No royalty?

Straight equity, clean deal,

no ratchets, no royalty.

Let's reinvest back in the
business and let's go for it.

Thank you for your offer.

Four offers. Congratulations.

Oh, my gosh. Well, I would
match his offer if you prefer it.

Greiner: So Barbara's
matching him at 250,000 at 10%.

Cuban: So what is your
offer now? $250,000 at 10%.

Flat equity deal.

So, Tony did you a big favor. Wow.

I... am a bit overwhelmed.

Well, can you make a decision?

So, the hard thing
about royalties right now

is that we already take a reduced margin

when we go into retail.

Nichole, this is exactly why I gave you

a straight equity deal.

No loans, no interest, no royalty,

especially as we head
into a lower margin channel,

that allows us to get mass distribution.

Tony and Barbara, would
you consider joining forces?

Why not? Let's do it.

You're willing to give up 10%?

For 10%, you could each do $125,000

and take 5%. For 5%?

You know what, Nichole?

I'm sorry to say it. I'm out.

I've been there as well.

I know exactly how to help you scale,

especially in the operating side. Mm-hmm.

We'd be willing to do the
deal. $250,000, both of us, 10%.

♪♪

It's what you just offered.

Do we have a deal?

You have a deal. Yes!

Deal. Hallelujah.

Good. Congrats.

I'm also a midwesterner. [ Gasps ]

Illinois. Oh, I'm in Minnesota.

We're kin. Thank you so much. Yes.

You have my outfit on. I have the same one.

[ Laughs ] Congratulations.
You did a great job.

Thank you, Nichole. Thank you all.

Truly, sincerely.

♪♪

I got an offer from four Sharks.

Oh, my gosh.

I chose Barbara and I chose Tony

because their offer of equity

really told me that they
were in it for the long haul

and that they were just as excited

about where Kinfield is going as I am.

Corcoran: You know what, Tony?

I've never gotten into bed
with a man I don't know before.

This is exciting. Yes, you have.

[ Laughs ] Yes, you have,
Barbara. That's just not true.

I'm insulted.

♪♪

I was born in China

and my family immigrated
to the U. S. when I was 4.

My parents wanted to come to the U. S.

To create a better life for our family.

My mom was a doctor in China,

but the U. S. didn't recognize her license.

She had to give up her entire career,

work three jobs a day,

including as a waitress at a restaurant.

My parents pretty much
had to sacrifice everything.

I've had a very non-linear career.

I started by studying
cancer research at Berkeley,

and then I decided to go to
Stanford to pursue my MBA.

Stanford gave me the
opportunity to think about

how technology can come
together with business.

That's actually how I met my co-founders,

and we weren't necessarily
looking to start a company,

but we were very excited to
help local business owners,

a group that all of us
were passionate about.

That's how DoorDash came to be.

One of the things we had heard
from many local business owners

was that they could not offer delivery.

In fact, they would refuse.
To us, this was crazy.

We were certainly not the
first company to launch delivery,

but in many cases in
business, the goal isn't to be first.

The goal is to be the last person standing.

Technology has always been a great way

to level the playing field,

but usually the access
isn't evenly distributed.

It usually starts with the big companies.

To us, DoorDash is about
democratizing access

to technology and to
empower local economies.

Williams: This pandemic
hit, our business plummeted,

and all the business came
back through DoorDash.

Local businesses really represent

the best of what America has to offer.

Businesses like Honey's Kettle Kitchen.

It's not just the business,
but the amazing community

that that company has
created over the years.

Dump it into our batter.

Especially as DoorDash gets bigger,

I think it's even more important

that I stay closer to our front lines.

Every employee at DoorDash
does deliveries once a month.

Even me.

Today, DoorDash is the largest

local delivery platform
in the United States.

We serve over 25 million customers,

over 500,000 local businesses.

There are over a million drivers,

and we've contributed almost $70 billion

of economic impact in 2021 alone.

The odds of someone coming to this country

with $200 in the bank,

to them building a
multi-billion dollar company

and, more importantly, a
positive change for the future

is only something that
can happen in this country.

And it is my American dream.

"Shark t*nk" is one
of the greatest platforms

to level the playing
field for the underdogs.

It gives equal access to talent everywhere,

and I'm so excited to be a part of it.

Part of my drive is how I grew up,

not having very much and trying
to make something out of the lot

that I was given in life.

A lot of that drive comes from
wanting to see success in others

and making sure that I can give back

so that collectively we
can all be successful.

♪♪

♪♪

Narrator: Next up is an accessory

designed to help you
maximize your workouts.

♪♪

Hey, Sharks. I'm MT.

And these are my business partners,

Braxton and Ecleamus.

And we're here seeking $100,000

for 5% of our company Metric Mate.

Hey, guys, this is pretty tense.

Think I'm gonna go get
some reps in and get pumped.

Whoo!

[ Laughter ] Let's go.

We're gonna flash back a few years ago

to watch Braxton do this
workout before Metric Mate.

All right, he's in the gym.

He's got a pen and paper in hand.

Looks like he's gonna write
down his exercises and his reps.

Great idea, if it was 1962.

Come on. Pen and paper?

Strike one for that,

and throw in another
strike for the tight T-shirt.

[ Laughter ] Okay, moving on.

It looks like he didn't even
bring the paper from last time.

He's guessing about everything.
What is he doing today?

Is he even making progress?

Sorry, Braxton. Strike three.

You're out.

Sharks, let me introduce
you to your new best friend...

Metric Mate,

a patented platform that allows
you to turn any gym equipment

into smart equipment.

Not only does it seamlessly
track your reps and your sets,

the platform analyzes your
workout to provide more useful,

here we go, metrics

like calorie burn,
intensity, force, fatigue,

even if you're at risk for injury.

All of this information can be shared

with your personal trainer,

your coach, your physical therapist,

even millions of your
social media followers.

All to increase accountability,

but more importantly, to
promote healthier lifestyles.

Sharks, invest in Metric Mate
so we can make sure your bottom

and your bottom line get in shape.

Now, we've got the Metric
Mate technology set up,

and we're looking for somebody

that might want to show the
world how Metric Mate works.

- That would be Mark.
- You got it, big guy. -[ Growls ]

So go ahead, join us at
the shoulder press machine.

Now, two of the things that
Metric Mate takes into account

is, one, you're tempo.

And two, we're looking
for a full range of motion.

All right, Mark, all you have to do

is follow the prompts as you hear it.

Okay. It's gonna automatically
connect to the device

and all that after that.

[ Automated voice ]
Mark, begin your workout.

One. So if you're not
doing the rep correctly,

you don't get your rep
count, right? Got two.

So you got to burst on that up. Oh. Got it.

And then... Just one more.

That's cool.

Mark's set complete.
But that was lackluster.

Are you really a Shark?

[ Laughter ]

Machine's working.

[ Laughter ]

I love it. Thanks so much.

So there's a device that
goes on the machine,

and there's an app that
you guys are building?

That's correct. So the device is
what we use to collect the data...

Yeah... that no other
type of equipment has.

But in particular, if you're traveling

or if you're at a different gym,

putting your pin in and
letting it connect to Bluetooth

was actually pretty slick.

Now, the question I have
is, can I do it on a phone?

Because being able to see it is important.

Absolutely. So, most of the time

you're using it on your mobile phone.

But also, you could have it in your pocket.

You have your headphones in.

And it's talking to you, right?

You're trying to... You're
using our guided workout.

So our Metric Mate assistant
is giving you the instructions.

Right. Besides being
maybe health enthusiasts,

are you engineers or
how'd you get into this?

Between the three of us,
we have eight degrees.

Greiner: Eight? Xu: Eight?

Wow. Yeah, we have 15-plus years experience

in terms of software,
manufacturing, supply chain.

And we got a patent lawyer over here.

So you guys are real slouches. No
question about it. Yeah. [ Chuckles ]

So, have you tested how
accurate the device is,

or is it mostly a recording product?

Most of the data that we get is unique data

because everything else is a wearable.

You're getting the biometrics,

but you're not getting
what you're actually doing

on the machine.

We're collecting all of it

and using that information,
along with the biometrics,

to bring together a full, holistic picture.

Okay, well, that's an
interesting statement right there.

So you say "along with the biometrics."

So you're integrating to
iwatches and what other devices?

'Cause that's where the
biometrics are coming from.

Yeah, we've built the
technology to allow that.

Right now, our focus is
working with personal trainers

to provide a service that is unparalleled.

Like, I-I work the gym in every station.

I want this thing.

Why do I have to have a trainer involved?

That's why we're here today.

So, our funding right now is limited.

So our focus has been on personal trainers

because they work with multiple clients.

That means the client has to
go to the gym with the trainer

'cause he's got the device.

At this point. Now,
once we get the funding,

we're able to proliferate the hardware

to now we're able to make
that available to our users.

So what does it cost you to make right now?

It costs us $99 to produce

at a quantity of 1,000 units.

And so we can retail it for $199,

which is what we plan to do.

Now that we're moving towards
being able to put the device

in the hands of the trainers,

we've got 10 devices
that we're looking to sell.

We've sold five before we got on here.

And the only reason we
didn't sell the other five

is 'cause they're sitting
over here on the stage.

So as soon as we get back to Atlanta,

those will be packaged
and sent off to trainers

to start the revenue -generation process.

So if I'm looking at this
as just a consumer product,

I can just purchase it for
$199 online at your website?

So, as of right now,

we have preorders available
for the end consumer.

Cuban: What if I don't want any... But
what about the biggest barriers of entry

for going directly to the consumer

is government certification.

So we have about five
government certifications

that are between $150,000 and $200,000

that are preventing us from being
able to send this direct to consumer,

which is why that B2B2C model

that we're doing with the
gyms and the personal trainers

makes sense.

What if I don't want any of that?

You know, the cool part to me is,

I just want to use this as my
pin and it just tracks my reps.

Mark, I think what you're asking is,

is there a way for just you to
use it on your own? Cuban: Yeah.

That's what I want it for.

I think that's the
business here, guys. Yes.

I mean, I think you have a
big business in consumers,

but a small business with trainers.

Look, guys, I think it's a great idea

as a consumer product first.

I'm really, really afraid
of all the analytics.

Basic analytics are okay...
Here's how many reps you did.

This was the machine you were on, right?

But when you start
getting into real analytics

where you have to use the biometrics,

the engineering and
analytics behind that are hard.

Really, really hard.

To me, that makes the
business worse, not better.

And so for those reasons, I'm out.

Greiner: You guys, listen,

I understand your first
model is to go with the trainers,

and I respect that you know your business.

But I think that this would be

just really great if you simplified it

and just made it for consumers.

Well, help us to do that,
Lori. T-That's why we're here.

Well, I actually am not
a huge workout queen.

I wish you good luck, but I'm out.

Our roadblock for the
consumer is the funding.

So we're not opposed to it.

The personal trainer is
where we have access to.

What bothers me about the deal is,

I don't know if the
consumer is gonna like it.

You really haven't given us any evidence.

They may. They may not. I don't know.

It's early. So I'm out.

Yeah, look, guys, I can
see myself trying a product

that actually does that,
but my strong advice is

get it into the hands of consumers.

Let them tell you what's working.

Maybe all they want is
just instant gratification

to know how many reps
they've done, right? Understood.

But for now, I think
it's a bit early for me,

and for those reasons, I'm out.

O'Leary: So I have a company called PRx.

PRx has sold millions
and millions of dollars

of gym equipment. We've heard of it.

We've been very successful.

We're building our own plant
to manufacture now... Wow.

Because supply chain is so broken.

So here's the offer I'm gonna make you.

I'll give you the $100,000 you asked for.

However, I want to take
advantage of my PRx investment.

So, we're gonna manufacture.

That's the contingency right here.

And I want... Are you ready for it?



Greiner: What?! Cuban: Oof.

You guys... You guys need
me so badly... Kevin, you savage.

And I know I have leverage here.

You should counter. Lori,
you didn't make an offer.

I'm the fourth partner. I get a quarter.

Unfortunately, for 25%,

that's just too high for us
because we put in too much.

We have the patents, we
have the intellectual property,

we have the software guy.

Is our counteroffer?

Strickland: We want to do $100,000,

but we also want to add
in $150,000 line of credit

that we can take advantage of.

And we want to come back at 12.5%.

No, I'm not doing that deal.

If this needs more capital,
like all of my companies,

I'll figure it out.

But if you want to scale this thing,

we got to sell 100,000 units in a year.

For $100,000, the highest
we could go is 7.5%.

♪♪

Would you be willing to increase?

No. What I want to get is
a quarter of the business

'cause I'm now getting on a journey.
Cuban: Guys, look. Kevin's very direct.

If there was wiggle room, he'd be wiggling.

Yeah. And he's not.

So you guys have got to make a decision.

♪♪

I'll give you one quick piece of advice

then you have to make a decision.

Where are you gonna be a year from now

if you do get the money or if you don't?

Even though it may feel painful

because of all you've done to get this far,


lot better than 100% of a grape.

Definitely appreciate your offer.

We're gonna counter if
you could do 200K for 20%.

And we would love to work
with PRx to be able to make sure

that we can get this thing
distributed as quickly as possible.

The offer I made was $100,000 for 25%.

You either accept it or you don't.

♪♪

We thank you for the opportunity.

I appreciate. Thank you.

Damn, guys. Corcoran: Wow.

Sometimes it doesn't work out.

God.

Indeed. Good luck, guys.

Xu: Thanks, guys. Best of luck.

Good luck, guys.

♪♪

You good? Let's go do this thing.

We have no regrets walking
out without a deal today.

We know what we're worth.

We can find investors in those areas

that can service us the same way.

But the one thing that
we won't be able to do

if we went out with that deal

is say that we stood on our values

and what we came here for.

Honestly, it was on them.

No, it really wasn't.
They've worked really hard.

They have three utility
patents. That doesn't count.

How hard... Everybody that comes here
It's probable cost them a lot of money.

There's no b... They didn't
want to give away 25%.

I get it. Nobody does. They went to 20%.

Well, I'll tell you, the good
news is I'm gonna buy one.

I don't have to buy the company to
buy the product. [ Corcoran laughs ]

♪♪

♪♪

Narrator: Next up, a modern twist

on a traditional beverage
with health benefits.

♪♪

Hi, Sharks. My name's Rosa.

I'm from San Francisco, California.

Growing up as a little girl in China,

Grandma taught me the
philosophy of food as medicine

from an early age.

She always brewed these healing tonics

with a symphony of
wild herbs and botanicals

that were great for my health.

They worked wonders for me,

soothing my stomach and lifting my spirit.

Fast-forward to grown-up me,
I worked a lot of stressful jobs

and started to feel the effect on my body,

mostly in my gut.

So I returned to Grandma's homemade tonics,

and, Sharks, I became a
true believer in gut health

and had to share her wisdom with the world.

And that's when I brewed up wildwonder,

a sparkling drink that reimagines

the healing tonics of my heritage

by combining herbal
wisdom with whimsical flavors.

Our drinks have all the
gut-supporting superfoods

your body craves, 50%
less sugar than kombucha,

and best of all, is the first drink

that combines both
probiotics and prebiotics.

Why? Because better gut health

should be as easy as popping over a can.

Sip on our Strawberry Passion

for a perfectly sweet and tart refresher.

Dip into our dreamy pink drink Guava Rose

for both floral and fruity.

Try our Peach Ginger that
gives you all the peachy vibes

with a zesty kick.

Or indulge your senses with Mango Gold

for a tropical and refreshing taste.

Sharks, food is my love language

and I don't believe in
giving up taste for health.

I am seeking $500,000 for 5%...

-Whoa. -Whoa.

Of this gut-supporting and
immune-boosting superdrink.

So who's ready to put a
modern twist on ancient wisdom

and join me in drinking
our way to better gut health?

Sharks, in front of you
are wildwonder drinks

to sip on and enjoy.

We fresh-brew all the herbs and botanicals

and pair that with fruit.

I just drank the Guava
Rose, which tasted to me like

rose water with a little
bit of bitterness, right?

But we're talking probiotics. Yup.

Every can has five
grams of prebiotic fiber.

That's unusual in a drink.

We're a more holistic
way to approach gut health.

Most companies out there,

like kombucha, drinking vinegar,

first of all, they have that
really acquired fermented taste,

and that's not serving
the average customer.

I agree with that. And we're
here to really expand the market

with no fermented taste

and is a healthy
alternative to soda as well.

So as you can notice, every
can has 35 calories only.

It's incredible. 90% less sugar than
soda and 50% less sugar than kombucha.

And there's nothing artificial in it.

Everything is organic certified as well.

It's very clean ingredients.

Rosa, didn't we go to school together?

Yeah, we did. Thank you for remembering.

To tell me your background a bit more.

So, um, yes, we both
went to business school,

not the same class.

So let me tell you a little more
about my personal background.

I grew up in China.

My grandparents actually raised me

for the first 12 years of my life...

Wow... while my parents
immigrated to the U. S.

I came to the States at age 12

with zero knowledge
of the English language.

Within three years, I joined my
high school's debate team. Wow.

So then I was only a
sophomore from my college

to secure a finance
internship from Goldman Sachs

in their New York headquarters.

After I graduated, I worked in

private equity and venture investing,

so I know a lot about scaling businesses

with capital efficiency

and making a return on your dollar.

[ Laughter ]

I launched wildwonder in 2020.

I actually had large POs going
out to offices like Facebook

and Google, and COVID happened.

So that actually wiped out
my entire revenue stream.

It was really a hard time,
but I basically got to work.

Within three months, I knocked
on 200 grocery store doors,

got my website up and running. Wow.

And by the end of year one,

I was carried by over 100 stores,

including our regional Whole Foods.

Wow. Good for you.

O'Leary: I'm always fascinated

when someone comes into "Shark t*nk"

with a beverage deal with a
valuation of 10 million bucks.

Because I know how
hard it is to get distribution,

and 100 stores, with all due respect,

is nothing in terms of
what you have to achieve.

But that was last year, right?

That was 2020.

Okay. O'Leary: What do you
have now? How many stores?

So, year-to-date, we've
generated over $1.4 million revenue.

We're at a run rate of
$2.5 million right now.

We also have some really exciting launches

coming up in the next 30 days.

So are you gonna make any money this year?

At this scale, we're not net profitable.

Food and beverage is a gross margin game.

I'm very focused on
increasing our gross margins.

Rosa, what do you sell them for,

and what does it cost you to make them?

It cost 90 cents to make.

I retail for $3.49, and
within a year's time

we can get that cost down to 70 cents.

How much money have
you put into the business?

We raised, last year, $2.1 million.

That's all you've raised so far?

So we also have investors
putting in money right now.

What... What valuation are these raises at?

Last year we raised on a SAFE,

is a pre-money SAFE $6 million cap. Mm.

Look, I admire you.
Your story's incredible.

The product's fantastic.

One of the best, I must say,
I've ever tried in the t*nk,

but at 5%, I don't even
get out of bed for 5%.

For me, I'm out.

Sorry to hear that.

For me, the risk isn't matching the reward.

I think you're in a very,
very, very big market.

So I'm sorry. I'm out.

I'm sorry to hear that.
Cuban: I can't stand kombucha.

I can drink this all day long.

And the utility of it,
right, with the fiber

and drinkability.

Which one is it that I just
drink the whole thing of?

The Strawberry Passion? Yeah.

I'll order it. It was really, really good.

Thank you. But the amount of money

that you're gonna have
to continue to raise...

Entrepreneurs tend to kind
of try to find an equilibrium

of how much they want to keep

versus how much they
can raise. That's right. Yeah.

And it's very, very difficult.

It makes it for a small investor, just 5%?

It makes it really, really hard for us

to participate in all the upside.

So for those reasons, I'm out.

Thank you, Mark. You're welcome.

I think your product presents
as well as you did today.

Flawless, really.

I know you invest... You
invested in some beverages.

I did. Twice. There could
be some synergies, Barbara.

Listen, the first time I cried
when I lost some money,

the second time I put in more
money to follow my bad money

and lost that, too.

And then I wrote a note to my attorney,

signed it, had it notarized,

saying, "k*ll me if I ever go
into another beverage company."

[ Laughs ]

And I'm afraid he would k*ll me, actually.

I'm out.

Thank you.

Well, Tony.

♪♪

I do think, like some of the other Sharks,

I think this is a category
where you kind of

have to achieve a minimum scale... Mm-hmm.

Before it actually has a chance. Yeah.

Your ask was $500,000 at 5%. Yeah.

My... My counter to you
is the $500,000 at 9%.

And that's my final offer.

You know, I'm not a beverage guy,

but I do understand scaling
capital efficient businesses...

Mm-hmm... in a very sequential
way to have a chance at that success.

And I think that's what you need.

So the last round we
raised, pre-money SAFE,

so $6 million cap.

I'm happy to meet you somewhere

just so that I don't go under that.

♪♪

Would you be able to do $500,000, 6%,

but I'll give you a 3% advisory shares?

Just so it doesn't hurt my
my valuation as much.

But you'll get the same amount.

♪♪

Done. All right!

We got a deal! Cuban: Good job, guys.

Awesome. Oh, my gosh.

I love it.

Oh, we made it happen.

We made it happen. Yeah, yeah.

Congratulations on everything.
Thank you. Thank you.

Yeah, congrats on all the success.

Congrats, Rosa.

Yay! So glad.

This is validation for my
product and for my company.

I worked really hard to get
wildwonder to where it is today.

We've gone through a lot of challenges,

and it's clear that Tony
really appreciates that

and he believes in me and
he believes in the company.

So we're gonna take it to the next level.

Let's do it, buddy. Let's go, man.

Narrator: Next up is a
company hoping to make a dent

in the growing plastic-waste problem.

♪♪

Hi, Sharks. I'm Achal.

And I'm Russ. And we're Cabinet Health,

the sustainable healthcare company.

Did you know that the medicine
industry produces 190 billion

single-use plastic medicine
bottles every single year?

That's enough to make a
line from here in Los Angeles

to Australia... Mm.



And of all of those bottles,
only 3% to 7% are recycled.

The rest end up in our oceans,

our landfills, and eventually our bodies.

Sharks, in my hand is
the amount of microplastics

that you unknowingly
ingest every single year.

Whoa. That's 260 grams of microplastics,

which is like consuming a credit card

every single week! Wow.

Cabinet Health is a
sustainable healthcare company

that's invented the world's first

compostable and refillable system.

Today, we sell and manufacture

high-quality over-the-counter
medicines and supplements.

And we're on a mission to
eliminate single-use plastic

one cabinet at a time.

We're positioned to
change this industry entirely.

And we're here today to
ask for a $500,000 investment

for a 2.5% stake in Cabinet.

[ Laughs ] Xu: Wow.

So, Sharks...

Together: Are you ready to
un-plastic the healthcare industry?

Sharks, in front of you is
a sample of our products.

It starts with our refillable, stackable

and super space-efficient bottles.

Also, right next to that is our
compostable refillable pouches

that meet FDA standards.

And while they might look like plastic,

are made out of backyard
compostable materials.

So I see you opening them.
It's a child-resistant cap.

And then you hear that...
satisfying snap. [ Click ]

That's the closure system.

Cabinet promises customers
that we'll provide our products

less than the brand price with more pills.

And customers continually save

by staying sustainable
using our plastic-free refills.

So they save about 20% to 30% on pricing.

So the refills come in these
packages, these packs?

Is this the idea? Absolutely.

So the way that our product system works

is when you buy a starter set,

to customers, that's around $10 to $20,

that glass bottle that
you have in front of you

is a forever bottle.

When you purchase it, you get that once,

we make a 60% to 80% product margin on it.

So, you're selling a commodity.

You're appealing to me because
I care about sustainability.

Is that the story?

That's a really important part of it.

Kevin, we actually have


Xu: Wow. 700,000?

And the reason that they buy from us is,

number one, we have a better value

and customers can
save sustainably on refills.

So the first refill becomes
where the savings start

because you're not... This
is an expensive package.

Kevin, it's even better.

So our products are priced
less than the brand name.

The reason we can do that,

I'll let Achal share about
our supply chain advantage.

But customers save on the first purchase.

So I'm happy to share
how we got started, as well.

I think that'll start to answer
some of your questions here.

Yes. Tell us about you and your story.

I'm a third generation
healthcare entrepreneur.

My grandfather built one of world's first

acetaminophen factories 60 years ago.

-Wow. -Wow.

So when most kids were at summer camp,

I was literally in a medicine factory

learning the ins and outs of this world.

And as weird as it sounds, I loved it.

Along the way, I started
my professional career

in healthcare strategy
and supply chain consulting.

And, quite frankly, I was
born to build this business.

And while I have a deep
personal background in healthcare,

my good friend Russ'
background in sustainability

is really what makes
our partnership special.

My personal background is I'm
a sustainable product specialist

and a U. S. Army officer in the
Connecticut Army National Guard.

And I-I started my career in
state and federal legislatures

building environmental policies.

From there, I moved
over to the private sector,

where I worked at Deloitte Consulting,

that's where I met Ach, and
I led and started a program

that helps scale social businesses.

It would be an appropriate
time at this point to say $500,000

for 2.5% imputes a $20 million valuation.

So I've been waiting quietly in the weeds

to hear about... What are the sales?

Happy to share. Happy to share. Absolutely.

So to answer that
directly, we'll do $14 million

in sales this year. Xu: There we go.

What?! $16 million run.

I didn't expect that.

How much you making on that?

Right now, we're
profitable on a unit basis.

We're investing heavily in
research and development

to be able to bring additional
sustainable products to market.

When I hear $14 million in sales,

what I really want to know is how
much cash flow is it spinning off?

Got it. So if I understand
that question correctly...

It's very simple.

Cash flow is cash flow. Yeah.

This year we'll do $8 million
in inbound cash receipts.

Is that your net profit is $8 million

that you're taking home? It is not.

So net profit this year
will be negative 20%.

We'll be break even Q3 of next year.

Now, why negative 20%?

What's the problem? Great question.

So we're investing about
$2.5 million this year

into research and development.

No way. Okay, I gotta
call a little bit of BS there.

What? Okay.

You've got your sustainable
packaging. Mm-hmm.

You're using OEM medications.

You're not inventing any medications

that are gonna go through FDA approval.

The products do have
to go through... Right.

Rigorous stability
testing by drug molecule...

Every single drug... because we're
completely changing the packaging.

So every single medicine... That's where
your research and development money

is going right now? Yes, correct.

We need to invest heavily

that the packaging that we've made is safe.

You have to get FDA
approval for different packaging?

Absolutely. Every time you release this?

Every single pill count
and every single packaging.

Let me save you a little time. Yeah.

It feels to me like the kind of business

that I'd wait forever to get my money out.

There's too much risk in this.

There's always something
else to spend money on.

So for those reasons, I'm out.

♪♪

The next 12 months, what do you project

your revenues and your profits to be?

Yeah, next 12 months we're
projecting around $25 million.

We'll do about a negative 10% net income

and then we'll have a break
even point of October 2023.

Can you tell us about
the fundraising history?

Absolutely. So we've raised $13 million...

Oh! ...from mission-focused investors

that believe in eliminating
single-use plastic for medicine.

What was the latest valuation?

$81 million post-money.

So we're here offering you a deal... Wow.

That's four times better than that,

because we believe in the
valuation. O'Leary: $81 million?

Guys, look, I-I'll clear the deck.

I appreciate what you're
trying to do on sustainability,

but a lot of what you're
doing does not add up to me.

It's just not a fit for me.

I appreciate what you're doing,
but for those reasons, I'm out.

O'Leary: Um, I'm in this space,

and I believe in the
power of sustainability

being a motivator for consumers.

I've seen it happen with Blueland,

but I can't do this deal at
your valuation... it's insane.

Even now that you say it's a discount from

when you did it at $81
million, if that was the number.

I'll give you the $500,000. I want 12.5%.

Kevin, first of all, really appreciate
the offer. Yeah, thank you so much.

Let me get to the punch line for you, guys.

I-I think the packaging is great.

You're playing in a space

with highly recurring business activity.

I'm a big believer in
sustainability in general.

That said, here's my offer.

♪♪

♪♪

Narrator: Two Sharks are out.

Russ and Achal have an
offer on the table from Kevin

for their sustainable medicine
company Cabinet Health,

but Tony is also interested.

Xu: Here's my offer.

I'll do $500,000,

and I'll do it at 10%.

Achal: Yeah.

I think where you're really gonna need help

is in the operational
excellence of scaling up.

And that's really what, you know,

the business at DoorDash, we're all about.

Yeah. And in terms of what I've done,

you know, in terms of my
entire entrepreneurial career

is figuring out every single way

to actually optimize that process.

So that's what I actually think,
you know, we can do together.

And I think it'd be a huge business.

We think that your investment
and your investment,

Mr. Wonderful, could be worth a lot more

if we partnered together

and so wanted to get a
sense if you'd being open

to doing a deal together

or, Lori, if you'd want to come in on that.

I think what you've
done is really brilliant.

You can get rid of so many plastic bottles.

You did a beautiful job of it.

So I really, really like that.

But I think the valuation
is... out of this world.

Um, I hate it.

So I wish you guys both good luck.

I'm sorry. I'm out.

Cuban: Guys, it's time
to make a decision, guys.

You can counter, say yes, say no.

It's up to you.

Tony and Kevin, we'd
be curious if you'd be open

to a creative deal structure

where we can give you an opportunity

to earn that equity investment back

and you guys come in together.

Go ahead and make your
counter. Let's see what they say.

How about a deal where you do 3.5% each

in terms of equity, but
we give you a royalty

where you actually earn
your initial investment back.

What's the royalty on each unit sale?

We can do up to 2% of top line revenue

until you have that
initial investment repaid.

I'll tell you what we would do,

and I'm speaking on Tony's behalf,

if you let us double our money, okay,

and this is not being a savage at all.

So 500K each, then the royalty stops.

Does that work for you,
Tony? I think it works.

Although the equity feels light.

It is light, except now you've got 2%.

But you put the 2X...

You put the 2X return threshold. Exactly.

Yeah. I can get behind that.

You got a deal. That's the lowest I go.

[ Indistinct whispering ]

Works for me. Works for you?

Let's do it. All right.

You guys got a deal. Done!

Deal!

I'm gonna DoorDash
up to you guys right now.

It's so nice to meet you. Mr. Wonderful.

Pleasure to meet you. Thank you. You too.

Congrats, guys. Congrats.

We'll blow it up for you, that's for sure.

Congrats, guys.

Thank you all. Take care.
Thank you very much.

Greiner: Congrats. O'Leary: Love it.

You know, every time I get a royalty,

I feel warm and fuzzy. [ Chuckles ]

Sometimes you are actually wonderful.

[ Laughs ] Cuban: Never. Never.

Russ: With Kevin and Tony on board,

we can bring sustainable packaging

to so many more medicine cabinets

and learn from the best.

We took a slight valuation hit,

but what's really important
is we're on a mission

to eliminate single-use
plastics from medicine.

To have two Sharks on our side,

to be able to do that,
is exactly what we need

to be able to solve the problem.

♪♪

♪♪