Shark Tank (2009–…): Season 14, Episode 4 - Episode #14.4 - full transcript

Tonight, on "Shark Tank"...

I'm here to take the word
"drinking" back from alcohol.

Ooh!
Yeah, it's nice!

C'est bon.
C'est très bon.

This has, of course,
been our dream,

our entire lives
to stand on this stage.

You're asking me to
make a bet on the business.

Every single person who's
ever bet on me has won.

I feel a little insulted that
you just let me sit there.

- Whoa!
- Grasshopper will learn.

The problem is,
this is hard to sell.



But make no mistake...

I... am a lion. Rawr!

First in the Tank

is a product created
for students, by students.

Whoo!

Hi, Sharks. My name
is Matt Gronberg.

And I'm Sam Chason.

We're here today seeking
$250,000 for 5% of our company,

Storage Scholars.

Oh, guys.

So think back to your
first year of college.

It's the last week of school.

You're saying goodbye to all
the new friends you just met,

and you're up late studying



when you get the text
message from Mom...

"Hey, good luck on your
last exam tomorrow, sweetie.

Are you all set to move out?"

The panic sets in.

You don't have a
car to buy boxes,

you haven't reserved
that storage unit,

and you don't even remember
how that sectional couch

got into your dorm room.

Well, that is where we come in.

You can simply go online
and create an account.

You can add your parent to
overlook your order information,

and you can pay a $50
fully refundable deposit,

and we'll handle your
entire move-out for you.

Students are given boxes,
tape, bubble wrap, and labels

on campus the week
before final exams.

They pack up their
belongings, lock up their room,

and go home.

We have a partnership
with their university

to unlock that room
once the campus is empty,

and we'll move everything
into storage for the summer.

We'll even have all their
belongings ready and waiting

in their new room

when they return to campus
the following semester.

So, Sam, who
does all this moving?

That's the best part.

All the moving is done
by trained fellow students,

creating high-paying
jobs on campus.

So Sharks, as two 18-year-olds

terrified at the
thought of student debt,

we built Storage
Scholars in college,

which allowed each of
us to graduate debt-free.

Who's ready to join
us on our mission

to empower students across
America to do the same?

Wow.

Alright. Cool.

How many colleges
have you guys signed up?

We're on 23 college campuses.

Where are you currently?

So, we're at a
variety of colleges

ranging all the way from
New York down to Texas.

It started at our alma mater,
Wake Forest University.

We kind of grew
in the Carolinas,

and then kind of
spread our footprint.

How much is the total move?

It averages out to $559
for the whole service.

So that's boxes, tape,
and packing supplies

delivered on campus.

That's the pickup, the
storage for the four months,

the delivery, and
$100 of insurance

complimentary on every item.

I'm assuming you're
going to pay the college

to get into their service area?

So our strategy as a business

is we want to
partner with colleges

to get, like, their
full endorsement

and create this
total, like, key access,

pack it, lock it,
leave it experience.

So will they put... Okay, $559, that's
my revenue. Where are my costs?

So our costs are about
$199, and that includes

all of the boxes, tape,
and package supplies,

the labor, the
warehousing... Everything.

We're the only people
that I know of doing

the full key access
system in which

they pack it, lock
it, and leave it.

So there's nobody
else doing key access?

Not with the students
and with the technology.

And we have our own
custom-built technology,

which is what allows us to have

the 4.8-star ratings that we do.

What's the custom technology?

It's a Web app.

It was actually
built by his brother,

who's a full stack developer,
over the last six years.

But essentially, it
just does so much

of the automating
for our process

to be able to do 3,300
moves across 23 campuses

in 9 states at the exact
same week of the year

and nail it every time,
alright? So there's...

Wow. Impressive.

Tell us about your background,

and why did you
come up with this?

Yeah. So, I grew up in a family
of two high-school teachers,

and education was highly valued.

But when I decided on
Wake Forest University,

$70,000 a year. Wow.

I was looking at over
$100,000 in student loans,

and I always knew that
when I got to college,

starting a business
would be my path

to financial freedom.

So when I got to college,

I noticed there was
a gap in the market.

I also had a bunch of friends
that were looking to make money,

and I kind of combined
the two needs together.

We went door to door, getting
made fun of every single day,

but by the end of that year,
we serviced 64 customers

had $18,000 in revenue,

and that's how Storage
Scholars started. Good for you.

I just want to hear...
You went in with

this huge $100,000-plus debt
you were going to graduate with,

you started a business while
you were at school... Yes, sir.

And paid off all that debt?

- Absolutely. - Yeah.
- Wow.

And I came in a year later,
I had a very similar story.

I was trying to pay
for both my undergrad,

and then I eventually
had big dreams

of going to medical school.

So he said, "Why
don't you come work

for this business
opportunity that I have?"

So I ended up working a lot.

I worked 106 hours in 7 days,

unloading trucks until
4:00 in the morning,

just dying to prove my
worth to this business,

and I was at the right
place at the right time.

And are guys partners
now? Are you 50/50?

70/30 breakdown right now. Yeah.

Okay, and did you ever take in
any money from anybody else?

No. No. Zero dollars to date.

And how old are you guys now?

I'm 24. He's 23. Yeah.

And this is what
you do full time?

100% full time. Absolutely.

Good for you guys.
Good for y'all. Thank you.

So, what are your sales to date?

So, this year, we've done
$1.826 million in sales.

Oh, my God.

- Wow. Goodness. Wow.
- Congratulations!

So at your biggest school,

what's the most number
of storages that you have

at your biggest school?

Yeah, so, we're doing
about 700 students'

summer storage at
Wake Forest University.

At Wake Forest... that's
your home school, right?

Yeah. Yeah. So
everybody knows you.

What about a new school
that you added outside

the Carolinas, like in Texas?

Yeah, I mean, SMU,
we did 269 customers.

So how do you grow that?

So a lot of it is through the
partnership with the university,

and they're gonna help
e-mail on our behalf,

get on the university
website, which drives SEO.

So there's a whole variety... So it
goes back to... you got to get the

Yeah. Listen, I'll make
you an offer, okay?

Oh, God. I've heard enough.

You got an offer coming.
You got an offer coming.

I'm gonna make
an offer. Alright.

I think, look, at
the end of the day,

either it's a good
business or it isn't.

No way for 5%.

I'll give you... I'll do
the $250,000 for 20%.

Thank you so much for the offer.

- Appreciate it.
- We really do.

Hey, it's an offer. What
do you got, Robert?

Alright, well, listen, I
just want to tell you what I think.

First of all, great idea.

I mean, necessity, the mother
of invention, right? Thank you.

But I think you need to give
your valuation an evaluation.

A little massage.

And it's just... it's so out
there for me, you guys.

I absolutely love you.

But I am out.

Thank you, Lori. Appreciate
it. Thank you, Lori.

I like this.

I'll offer you the
$250,000 for...

I'll match Kevin...
$250,000 for 20%.

Thank you so much,
Daymond. Really appreciate that.

So, guys, I mean,
super impressive,

great business sense.

You have a great
maturity about you.

In some businesses,
moving slowly's good.

What I've learned from
you, you got to go faster.

Yeah. And so to go faster,
this is where money helps.

- So you've got two offers.
- Sure.

Kevin offered $250,000 for 20%.

Daymond offered
$250,000 for 20%.

I like the 20%, but I'll
actually give you more money.

I think your
valuation is inflated.

But it's a bit of a bet on you.

I'll give you $500,000 for 20%.

Whoa!

One Shark is out.

Kevin and Daymond
have each offered $250,000

for 20% of Matt and Sam's
college moving service,

Storage Scholars.

But Robert has offered
to double the money.

I'll give you $500,000 for 20%.

Whoa!

Thank you so much,
Robert. Robert.

That's incredible.
You go faster.

Guys, I'll sweeten the deal.

Robert has $500,000 for 20%.

Kevin and I will give you
$250,000 apiece for 40%.

Thank you, guys. Appreciate it.

Matt, I offered you
twice what you were asking. Yeah.

Far better than the
other two Sharks.

What do you want to do?

I mean, I think
at this point, like,

this has, of course, been
our dream our entire lives,

to stand on this stage.

And I wouldn't want to
not hear from every Shark.

I think that's an
absolutely incredible offer.

I'm just wondering...
We've heard from everyone,

but if there's
potentially another offer.

Mark, what are you gonna do?

Oh, there is another Shark.

So I'll make you guys an offer.

And congrats for
getting all these offers.

- Thank you.
- Thank you, guys.

- I'll make you the 250K.
- Yeah.

But I want 12%.

Okay. And the reason I'm asking

for a little higher
valuation than Robert...

You still get to keep
most of your equity,

so, you know, you're
diluted minimally. Sure, sure.

But, I mean, I've
got a platform,

and, you know, there are schools
that I have connections to. Yeah.

And if I get out there
starting to talk about it,

maybe they won't all be
partner schools... Sure.

But the phone's gonna ring
for you to open up new schools.

- Absolutely.
- Right?

And so that's the
value that I can bring.

Yeah, and I know... Thank
you so much for that offer.

I know college debt
is a big thing to you.

Yeah, for sure. You've
been very outspoken about it.

Yeah, for sure. I think
that's really amazing.

- Alright.
- So, guys, you have four offers.

What do you want to do?

Yeah. So, first of all,
guys, this is incredible.

This is a dream come
true to get all these offers,

be here with you all.

We do have one counter.

We're interested in all
the Sharks right now,

but we have one
counter right here.

Would you be willing
to do $350,000 for 8%?

No.

I'll do 10%.

But you guys are gonna
have to give up something

'cause I'm gonna give you
something you can't get elsewhere.

Sure. Would you come
up to $300,000 for 10%?

No. Do a $3 million valuation?

$250,000 for 10%.

Don't worry about the valuation,

'cause it's still
the same dilution,

and that $50,000 is not
gonna change your life.

You're gonna need more
money. Why would you do that?

Why won't you run faster?

Because it's
not just about the money.

Well, that's true.

Mark, you got a deal.
Mark, you have a deal.

Done. Appreciate it so much.

Let's go, baby. Let's go.

Baby. Yes, sir. Let's go, Matt.

We'll get this
done. Thanks, Mark.

Appreciate it, guys.
Thanks. Appreciate it.

Thank you. Congrats, guys.

Congrats, guys.

That's crazy.

Oh, my...

Mark gave us the deal
that we were looking for.

And we're just over the moon.

I'm speechless right now. I can't
even speak. We came in wanting him.

He's super passionate
about our mission

of eliminating college debt.

He's gonna give
people the opportunity

to be able to do this, create
jobs on college campuses.

And I know that he's
gonna be the right partner

to put some wind behind this.

We're really excited.

What was your deal?

250K for 10%.

You cut their value in half.

Sometimes when we negotiate
a really good deal for us,

the pressure's on
us to deliver now.

Yeah, it is.
Yeah, of course.

In Season 12,

we saw Oliver Zak
and Selom Agbitor

make a deal with Mark Cuban

for their tattoo skincare
company, Mad Rabbit Tattoo.

Why are you here? We
want to be the premier

and the face of
tattoo aftercare.

Let's see
what they're up to now.

The idea for Mad Rabbit really
came to Selom and I in college.

Oliver and I started
with $300 each.

We ordered ingredients
off of Amazon

and skipped class to cook
this in his college apartment.

Since airing on "Shark Tank,"

we've landed a deal
with Urban Outfitters

that placed us in 150 stores
across the U. S. and Canada,

landed 200 tattoo parlors,

and have sold in over
100 countries worldwide.

When we first
pitched the Sharks,

we only had one product.

The Mad Rabbit skincare
system is now up to eight products.

Before pitching to the Sharks,
we had sales of $3 million.

Since inking a deal
with Mark Cuban,

we've done over
$14 million in sales.

You guys were really
humble. You didn't brag a lot.

But you're kicking a lot
of your competitors' ass.

Mark has been
a fantastic partner

not only by following
on in subsequent rounds,

but also providing
strategic business advice.

Advertising online is becoming
more and more difficult

and getting less
and less of a return.

And a big part of what you've
done that's really stood out

is your own content creation.

To grow in our space,
we realized that we had to

move away from
traditional paid advertising.

That's what led
us to inking a deal

with the largest tattoo
community online and in print.

Mad Rabbit just signed
a deal with Inked magazine,

which is the number-one source
of content for the tattoo world.

I mean, anybody and everybody
who's got any ink on them

is aware of Inked magazine.

They connect as
part of a community,

and Mad Rabbit is
right in the middle of it.

And I can't think of a
better place for them to be.

As a first-generation
American from Ghana,

I am so grateful
for the experience

that "Shark Tank" has given me.

I could never have imagined

running a
multimillion-dollar business.

My advice to
entrepreneurs everywhere

is never stop learning and
never stop asking questions.

Welcome, everyone, to the
biweekly all-hands meeting.

If two college students

could start a
multimillion-dollar business

with $300 each,

we have faith that
you can do it, too.

All it takes is hard
work and perseverance.

I believe that
if there is a will,

there's a way to succeed.

Next in the
Tank is a stylish alternative

to boozy beverages.

Bonjour, Sharks.
My name is Melanie.

I'm the founder of Ghia.

I was born and
raised in Lyon, France,

and I now live in Los
Angeles, California.

I'm seeking $250,000
for a 5% equity stake

in my company, Ghia. Hmm.

Sharks, how many
times have you wanted

to take a night off of booze

and the only option
at the party was water?

How many times have you
wanted to take a night off of drinking

and been asked if
you're sick or pregnant?

I'm here to take the word
"drinking" back from alcohol.

That's why I created Ghia.

Ghia is delicious.

It's fresh, bitter, complex.

It has notes of yuzu, rosemary,

juicy Riesling grapes,
and a sharp kick of citrus.

And it's nonalcoholic.

There's truly only
good things in it.

A Ghia spritz is a perfect
accompaniment to any celebration

without a hangover
the next morning.

So how do you drink Ghia?

You can mix it with
your favorite bubbles

or have one of our
ready-made spritzes.

Sharks, who is ready to get
over the influence with Ghia?

Wow. How do we
drink it? I want to try it.

Let's have one together. Okay.

So you can have one of
our ready-made spritzes.

This one is mixed
with sparkling water.

This one is mixed with
our homemade ginger beer.

It's my personal favorite.

And lime and salt
is our newest one.

Oh, wow! That's really nice.

Melanie, how many
calories in this?

About 50. Mmm!

- In the whole thing?
- In the whole thing.

Melanie, this is really nice.

I love this one. Ugh.

The idea is that it's a
nonalcoholic amaro,

like an Italian drink, you know,

akin to a Campari
or an apple spritz.

Oh, that's what it reminds
me of... like a Campari. Yes.

Exactly. Yeah.

But an all-natural
version, much lighter.

And you know
exactly what's in it.

Ooh! Yeah, it's nice.

C'est bon. C'est très bon.

Merci beaucoup.
It's got bitters in it.

Très, trs bon.

What do you sell
each one of these for?

And what does it
cost you to make?

Yes, so we actually
just increased our prices.

And interestingly, our
sales have gone up.

So our bottle
now retails for $38.

It has 10 to 12 servings in it,

and it costs us $6.50 to make.

Our spritz costs
us $1.25 to make.

In six months, that
will be 70 cents only.

And it retails for $5.

Let's talk about the business.

Hopefully, we're gonna hear
some great sales numbers.

Last year was our
first calendar year,

and we were 75% online

because we were still kind
of on the tail end of COVID.

And? We made $2.5 million.

- Whoa?
- What?

- Mwah! Magnifique!
- Yes.

How did you sell that $2.5 million? Did
you make any money on that $2.5 million?

We just launched
with an Instagram post.

That's it? And it
took off. What?

And so did you make any money

on that $2.5 million last year?

Not yet, but we invested
very heavily into this year.

And we have a two-year path to profitability.
How much did you lose last year?

A little under a
million dollars.

- Ow!
- Ohh.

- You lost a million dollars?
- How much did you put in?

Well, we have a million
dollars' worth of inventory.

How much did you raise?

We had raised $3.5 million.

- Oh!
- Oh!

And we're currently
raising $6.5 million.

So, Melanie, who
did you raise... Oy!

What was the valuation
at $3.5 million raise?

Well, the first
$900,000 was a SAFE

at $7.5 million.

Your first $900,000 that
you raised pre-revenue?

Yes. It was everyone
I had ever worked for.

I worked very hard.

You know, I worked for companies
like sweetgreen and Glossier.

I worked at Goldman Sachs.

And the people that had
seen my work before...

How much do you still
own of the business?

I still own 57% of the business

after this $6.5 million round.

Wow, that's impressive. What
valuation is the $6.5 million round at?

It's a $35 million
pre-money valuation.

- What?! - What?!
- Holy!

So $41 million... By
our numbers, $41 million.

'Cause that's pre-money
versus post-money. Yes.

$41 million? What's
sales gonna be this year?

$4.5 million,
doubling next year.

Wait. I need an alcoholic drink.

Like, are you kidding?

And, Melanie, why
are you offering us...

$250,000 for 5%?

And if I did the numbers,

you're giving us a $5
million valuation today.

Like, I'm just trying to
understand that conversation

with the people you're pitching
it to at $40 million... Yes, yes.

And then telling them you're
giving it to us at $5 million.

Yes, well, you know,

this equity is directly
coming out of my shares.

Which is smart.
Good for you. Yeah.

I want someone to come in

and help me build this
into a huge business.

We launched in the
depths of the pandemic.

So we've already overcome,
you know, a lot of hurdles.

Currently, we're
sold in 750 accounts.

I personally reached out to
at least 400 of these accounts

myself on Instagram
during COVID.

Good for you, good for you.

2020, there was no other way.

And I said, "Hey, like,
I'm making this drink.

You're a chef I really admire.

I would love to
send you a bottle.

Will you please try it
and give me feedback?"

I really believe nonalcoholic drinks
are the future... Smart thing to do.

And every restaurant
in a few years

will have nonalcoholic menus.

And I really hope that you'll
join me on this adventure.

Here's my thought about this.

So I think you're
super impressive

to raise that amount of money,

and you're one of
the few that came in

to show us the
value that we add.

But I unfortunately
can't drink this.

I have acid reflux.

I want to be in this, but
I can't 'cause I don't...

I can't drink the
stuff, so I'm out.

Well, thank you very much.

Listen, Melanie,
you are amazing.

For me, when I
invest in something,

I have to be able
to partake in it.

And unfortunately, Daymond
and I have something similar.

I cannot eat citrus
or bitter things.

It just affects me.

And I'm just so sorry about
that because I love you.

That's okay. I
wish you good luck.

Thank you so much.
But unfortunately, I'm out.

Thank you, Lori.

Melanie, the category you
chose is one of the hardest ever

because it's either
expensive to ship them,

it's expensive to store them,

it's expensive to get shelf
space for them and to keep it.

Getting to $50 million in
sales to really have an impact

is gonna cost you $50
million to $100 million.

And so for those
reasons, I'm out.

Thank you very much.
Look, Mark's right.

You've somehow picked the
hardest category to get into,

and you're killing it.

Melanie, I'll give
you the $250,000

and I'll give it to you...

for the 5%.

That's my offer.
Do we have a deal?

Wait.

You may get an
offer from someone

who's actually in this business.

You're in the wine
business? Yep, I sure am.

'Cause, you know,
there's no alcohol in this.

Well, do you want to
hear my offer or not?

With all due respect to Kevin...
You're gonna get a second offer.

Melanie, I don't want to argue.

I don't want to negotiate
against other people.

I'm making a bet on you. Do you
want to hear another offer or not?

I'll give you the $250,000
for exactly what you asked for.

If you don't want that
offer, I'm happy to step out

and you can
negotiate with Kevin.

I feel like it's not fair
not to hear everyone out.

- I think that's reasonable.
- Ooh. Ooh.

Is that okay? You
may not like my offer.

Melanie, I'm out.

Ooh.

Ouch.

I'm giving you exactly
what you asked for.

He's right, Melanie. He's right.

I mean, at a certain
point, you got to decide,

as an entrepreneur,
why did you come here?

Because I think if
someone comes in here

and I give them exactly what they're
looking for... You're right, Robert.

And then they want to hear more,

I'm not sure where that
conversation's going.

So all due respect. I
wish you all the best.

Thank you.

So my offer isn't gonna change
because of what happened here.

Absolutely. So I
know what I'm worth.

I also know that
I'm in this business,

and I also know this category.

And everybody's talking
about how difficult it is,

and they're right, but
I'm not doing it for 5%.

I'm too valuable. Oh!

Ooh! I want 10%.

- Oh!
- Oof!

Your valuation just got crushed.

- Oof.
- Oh!

Because I have to get up in
the morning and work on this.

Ohh. I do.

You can moan and
groan all you want.

Have another drink.

You costed her her deal
with Robert. I'm sorry, Melanie.

I'm the only Shark

that is Chef Wonderful
and Mr. Wonderful.

That's my brand. That's
my business. I know.

That's why you should give
her, you know, a million for that.

Yeah. You can say
anything you want. You're out.

What do you think, Melanie?

That's true.

I'm not in a position to
accept an offer like that

without doing
wrong to the people

that have supported me from
the beginning. - She has 57%.

So I unfortunately...
It's your stock.

Yeah, she has 57%.

- That puts her under 50%.
- That puts her under.

- She's not gonna go under 50%.
- That puts me under 50%.

She can do whatever she wants.

You knew that already, Kevin.

I'm doing it for 10%.

I'm honored, but
I can't accept it.

Good for you,
Melanie. Thank you, Melanie.

Good luck,
Melanie. Thank you so much.

- Good luck.
- Good luck.

Bye.

I walked away without a deal.

You know, I feel like it was
fair to hear everyone out.

And I took the risk, and
I don't know if Robert

will regret backing
out of that offer.

But, you know, I hope

he lets other people
speak in the future.

I think she made
a mistake, Robert.

She should have taken
your offer, for sure.

I think she made a big mistake.

Rule number one in sales,
when you get the order...

Robert, what does ABC stand for?

Always be closing, baby.
Thank you, and we're out.

And rule number two in
business... never trust Kevin.

Next up is a vibrant art form

from the entrepreneur's
homeland.

Sharks.

My name is Sofi. I live
in St. Louis, Missouri.

But I'm originally from
Senegal, West Africa.

I'm here seeking $500,000 in
exchange for 10% of my company.

I was born into
the world of tribe,

and in the world of tribe,

weaving is passed
down generationally

from grandmothers to mothers
to daughters to granddaughters.

Senegal is full of joy,
color, laughter, and life.

Senegal is brimming
with abundance.

But when I first
came to the States,

I was shocked to learn that
many people's perception of Africa

was so interwoven with poverty.

This was such a stark contrast
from the place that I grew up.

I wanted to weave my
heritage into an art form

that told the true story
of African craftsmanship.

That's why I created
Expedition Subsahara.

Our beautiful, vibrant baskets
are made by artisans in Senegal,

all by hand and with love.

Our mission... to interject
joy, color, and culture

into every home with
our handcrafted storage

and home decor solutions.

And with Expedition Subsahara,
I'm dedicated to giving back

to the very community
that raised me.

Now, I know that I'm
standing amongst Sharks,

but make no mistake...

- I... am a lion.
- Grr.

Now, who's ready to join me

in transforming the
home goods space

by banishing boring storage

and making this world a more
cultured, more colorful place,

one happy basket at a time?

Sharks, in front of you,

you'll find your very own
Expedition Subsahara baskets

so that you, too, can add
some color in your lives.

Rawr!

So, tell us about... is there
a purpose for each one?

'Cause we have three
different shapes here.

Yeah. We've taken our
traditional craftsmanship,

and we've made modern vessels.

They're beautiful. The big one, for
example, is actually our bestseller,

and it's used
mostly for a hamper.

And these are handwoven?

They're all handwoven. Wow.

In Senegal?

And you import them in? Yes.

And what's it made out of?

Like, it reminds
me of lanyard string.

So they're actually made from
a sweet grass, elephant grass.

We use a variety of grasses.

And then all the color you
see is from recycled plastics.

Yeah. 'Kay.

And what does it cost?

How much would this
particular one cost?

Now, it would probably
cost, fully landed, $18,

- and we sell it for $50.
- And how do you sell it?

That's a fair price. Do you sell
it online? Do you sell it through retail?

Tell us about your sales.

We sell 95% online.

Our total sales
today is $900,000.

Wow! Herjavec: For this year?

For this year. $900,000?

- Wow!
- Wow!

$900,000. Sofi, I was
not expecting that answer.

- Wow!
- Whoa!

- Nice.
- Wow. Wow, wow!

Nice! Good for you!

Actually, lifetime,
we've made $3.6 million.

Oh. Oh, my God!

What did you do last
year, Sofi? Last year?

Lifetime. Last year,
we did $1.6 million.

You are selling

- a lot of baskets.
- Wow!

Sofi, does everybody... O'Leary:
So, Sofi, last year, $1.6 million.

What did you make
on that? What profit?

So, our gross profit was
over a million dollars. Wow.

Wow. What are your
margins typically?

About 60%. 60%?

Yeah. So what's your overhead?

Do you, like, not spend
any money on anything?

So that's our gross profit.

So I reinvested into
the company quite a bit.

Okay, so gross
profits was $1 million.

What was your net profit?
What was your net profit?

How much did your...? $75,000.

$75,000? $75,000. Okay.

- Whoa. - Whoa.
- Oh.

So let me take
you back, actually.

In 2019, we only
did $75,000 in sales.

When the pandemic hit,
people weren't buying baskets.

So in March 2020, we
made $4,000 in sales,

and I thought about
closing the business

because I couldn't sustain it.

Then from March
2020 to May 2020,

we did $45,000 in sales. Wow.

So, unfortunately, George
Floyd was murdered.

And with George Floyd's
murder came a huge rise

through the Black
Lives Matter movement

to uplift Black businesses,

and I saw a huge
shift in my business.

- That's awesome.
- That's good.

So I had to ramp up
production really fast.

I had to bring in weavers...
120 of them, to be exact.

So I had to pay them fairly.

I had to make sure

that the places where they
were weaving were taken care of.

I had to make sure
that the farmers had cars

to bring the grasses.

So basically our
margins kind of dwindled

because we had a
bunch of overhead

that we didn't have
the previous year.

Got it. Because it was
a mom-and-pop shop.

Sofi, are you saying that
you're paying the weavers

on a flat wage?

I just made the assumption

you were paying
them on a piece basis.

No, we're doing
this differently.

Normally that would be the way,

but we're paying them so
that they are our weavers.

Not all of them are going
to be as productive as the others.

Why don't you just
pay by the piece?

What we're going to do
is take the master weavers

and make sure that they
have someone underneath them

who can learn from them.

What's the competition doing?

Wait, wait, wait, wait. Hold on.

The problem is that's the
way it's always been done,

and that has done
nothing for my community.

Those baby weavers are going
to end up being master weavers.

They have to learn from a master just
like I did... - Good for you, Sofi.

- So that people have a living wage.
- You're saying you have to do it...

So we're doing it in a way that
is different. Good for you, Sofi.

Good for you. Good
for you. Yes. Yes. Yes.

Good for you. Sofi, what did you
spend on advertising last year?

Last year, I spent
$400,000 on advertising.

Whoa! Whoa.

So that's where the profit goes.

Tell us about your
numbers last month.

Yes. So, last month,
we did $160,000 in sales.

So your average
sale was how much?

$206.

$206. Yes.

Your margins are 60%. Yeah.

And then it costs you how
much to acquire a customer?

It costs me about $116
to acquire a customer.

Ay. You only have
five bucks left. Yeah.

That's a break-even business.
That's your problem right there.

Yeah. That's my problem
is for customer acquisition.

Right, but so what I think... So,
you're losing money right now.

So last month, you lost money.

We don't lose money.
We kind of just break even.

Where do you see
the scalability now

that you set up these
systems and people in place?

These are all online.

Right now, it is
harder and harder

to acquire a customer
the way that we're doing it.

So what I need to do

is get these baskets to
the masses through retail.

Oh! Oh. You wanna go retail?

Now you want to go to retail.

Ay. Whoa.

For every customer you acquire,

you're actually losing money.

And I think that's
a big problem.

I don't like retail for this
'cause it's going to tie up

a ton of capital in inventory.

I'm sorry. This is not
a business for me.

I'm out.

Okay. Thank you, Kevin.

I love your mission
and what you're doing.

I think your valuation...
I never talk valuation,

but the valuation for
me is a little off here,

and you're figuring so much out.

So I wish you good
luck, but I'm sorry.

I'm out.

I understand. Thank you.

Sofi, you're in
a difficult spot.

But, Mark... Go ahead.

Before you say anything,

I started this
business with $500.

$500 to $3.6 million.

I have never had a loan.

I've never had any
sort of debt, period.

That's
amazing. I took that $500,

and I just turned
it, and I turned it,

and I turned it.

Imagine what I
could do... Imagine...

With a Shark by my side.

I think you operate better
as a sole proprietorship

where you don't have investors

because you have
complete flexibility.

And coming in
asking for $500,000

makes it really
difficult to say,

okay, I know exactly how
I'm going to get a return.

I just don't see that.

So for those reasons, I'm out.

Sofi, you know, at $500,000,

you're asking me to make
a bet on the business.

I'm asking you to
make a bet on me.

Every single person who's
ever bet on me has won.

And I promise you, you
will never have somebody

who can work as hard as I can.

I don't sleep. I run the ads.

I pack the boxes. I still
weave when I need to.

I will work like a lion.

I promise you.

Bet on me.

There's a difference
between me betting on you...

'cause I'm willing to do that.

Betting on Sofi... I'm in, baby.

I'm in all day long.

There's no doubt in my
mind you're going to make it.

But as an investment
at half a million, I just...

I just can't do it 'cause
I don't see the return.

Not the return on Sofi.

I'm sorry. I'm out.

Okay. Thank you. Thank you.

You know, you said something
that most people don't realize.

The only people in history who
have ever changed the world

are the people who
never have accepted

somebody saying,

"That's the way it's
always been done."

And that is probably one of
the most dangerous statements

in the world that anybody says,

to have you accept the
way it's always been done.

And as long as
you keep doing that,

I believe you're
going to be okay.

This is not an
investment for me.

I'm out.

- Thank you, Sofi.
- Thank you.

Thank you, Sofi. Well done.

Thank you. Good
luck, Sofi. Well done.

Thank you.

I have never failed
betting on myself,

so we're going to continue
and I'm going to continue

betting on my culture,
betting on my weavers.

We are going to
take over the world

one happy basket at a time.

Next up is a better version

of an often-neglected
household item.

Hi, Sharks.

My name is Winston Mok,
and I'm the founder of Woosh.

I'm seeking $500,000
for 10% in my company.

Sharks, when was the last time

you changed your
home's air filter?

If you're like most
people, it's been a while

since you thought
about your filter,

and there's a good
chance it looks like this.

Ew! Isn't that
absolutely disgusting?

As filters get dirty,
they stop working.

And what this doesn't catch,

you and your loved
ones are breathing in.

This includes pollen,

pet dander, mold,
smoke, bacteria, and...

Ew.

- Ugh!
- Ugh!

Even COVID.

And that's why I created...

Woosh... a better air filter

that's smart enough to know
when it needs to be changed.

Let me show you how it works.

The smart air filter
is made of two parts...

A filter and a reusable frame.

The filter is made from
the highest-quality materials

and is placed inside the frame.

Huh.

The filter connects to Wi-Fi
and has integrated sensors

that track the
performance of your filter.

So when it's time to
change, we send a notification

and a filter
replacement in the mail.

With Woosh, it's easier to use,

smart, and produces less waste

than traditional
cardboard filters.

So, Sharks, who's with me

to whoosh for
smarter, cleaner air?

There's no intelligence to this.

No, there's smarts in it.
There's electronics built in.

We have integrated
sensors that connect to Wi-Fi.

It actually checks to
see... It looks at the airflow,

and we actually measure

the performance of
your filter accurately,

so we can see when
it's time to be changed.

So you've designed a
better mousetrap. Yes.

And what made you come
up with this idea? Why a filter?

So, it was the wildfires
in California that, in 2019,

my partner, she
came to me and said,

"Oh, you know, we've
got to be worried, like,

should we get a purifier,
should we get some stuff?"

And I said, "Oh,
yeah, for sure."

I'm kind of frugal, so I
really wanted to make one.

So I went on YouTube and
learned how to make one

from a box fan and a filter.

And when I got the filter...
When I ordered the filter,

it was 25 bucks to ship,
and it's a high-quality filter,

but I was sitting there going,

"Man, you know, why
is this so expensive?"

So half of that cost
is actually shipping.

So I thought to myself,
"Wouldn't it be cool

if, like, I could change this
and ship it for a lot less?"

So, are you a tech
guy? A software guy?

What's your background pre...?

Pre this, I grew up in Canada,

and so... Go, Canada!

I took the opportunity
to move to the U. S.

I joined Google as
a product manager.

Have you left Google? I
have left Google last year.

Are you doing this full time?

I've been doing this full
time for over a year now.

Let's go in a different
direction for a second. Yes.

$500,000 for 10%

imputes a $5 million valuation.

Yes. I think the
product has merit.

Please tell me you have sales.

So we are pre revenue.

But let me see if I
can save myself here.

We raised $62,000
two months ago.

And what's most
important is, last month,

we signed our first
partnership with Emerson,

the Sensi smart thermostat.

This is a Fortune 200,
130-year-old HVAC giant.

Huge. And they're huge.

And so I'll tell you what they
see in us. What's the partnership?

How does it work?
Partnership is they want

to bundle our product
with their smart thermostat.

Oh, now that's interesting.

What's your unique
selling proposition on this?

You ultimately know

exactly when you need
to change your air filter.

What's really important
is we have an add-on

for the growing number of homes

that are moving towards
smart thermostats.

We have an integration
that transforms your entire...

Your home's HVAC, or
the heating and cooling unit,

into a smart air purifier.

How does it do that?
What we do is we have a...

air-quality monitor that's
paired with our filter.

It sends a signal to your
smart thermostat to say,

"Hey, air quality is poor."

And what happens is
the monitor goes red.

It then sends a signal
to your smart thermostat

and says, "Circulate the air."

Clever. But what do you
sell this to somebody online

for right now if they
wanted to buy it?

Right. Right now we sell

this frame and
the filter for $99.

What does the filter itself cost

after I've paid the $100?
What do the... cost? Yeah.

$20.

And then, what does it
cost you to make the $20 filter?

Our costs, we have a 33%
margin, and it's shipped.

So it shows up at your door.

I'm going to guess that there's
some very large filter players

that already dominate
this market... Yes.

'cause it's an industrial market

that's been around
for decades. Right.

Now, what stops them from
just doing the same thing

to the existing multibillion
dollar business they have

and crushing you like
the filter roach you are?

I know. I must look
like a filter roach.

But I'll tell you something.
That's a great question.

Do you have patents?
We have patents.

They're patent pending.

The biggest filter
manufacturers,

I would say, have reached out.

They've deemed
us noncompetitive,

and they are now
willing to give us

their brand, technology,
and manufacturing

to make our filters.

So is that a licensing deal
you're going to do with them?

And this is licensing,
licensing, licensing.

You've come to the right place.

Grasshopper will learn.

From roach to
grasshopper I become.

Oh, my
God. Oh, my Lord.

Listen, Winston, I've
heard enough. Sure.

I'm gonna make you an offer.

You're my favorite filter roach.

There's no question about it.

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

But wait... there's more.

I want 50 cents'
royalty on every filter.

Oh. When does the royalty end?

Never. Oh.

Well, maybe when
you and I are both dead.

But wait... there's
more. Maybe not.

But wait... there's
more. There's... I...

Thank you for the offer.

I think what's
really important is right now,

we're a startup, we're growing.

And...

So, Winston, there isn't enough

in the value proposition for me.

And I'll tell you
why. Tell me why.

It's really easy
to change a filter.

People aren't doing it,

and I'm not sure this is
going to compel them to do it.

Let me see if I can
rope you in with...

Well, I think you've got an offer
here from Mr. O'Leary. Yeah.

So I'm not your guy
for this one. Yeah.

Wish you all the best.
"Woosh" away. I'm out.

Understood.

I don't really believe that I
can add any value to you,

'cause I think you're off on a
good start with a good product.

So I'm out. Alright.

Winston, I think you're
amazing and incredibly brilliant.

Unfortunately, I haven't
heard enough for me to gauge

what's going to happen
with your patents.

Because I have some doubts,

I'm not going to invest.

I'm sorry. I'm out.

I like the product, I like you,

I like the goal, I like
the mission, right?

The problem is,
this is hard to sell.

You're gonna have to spend a
boatload of money on marketing.

Even if you partner
with the big companies,

even if they use
all their outlets,

it's still going
to be a hard sell.

And so for those
reasons, I'm out.

Kevin, let me ask you something.

With all of us out
for various reasons,

where are you finding
the value in this?

Winston is a dual-patent
guy with sneakers on here.

That's all you need to know.

That's basically it.

You have a really
tough negotiation ahead

with these behemoths.

You remind me of BenjiLock.

We had to get two lock companies
competing with each other.

My team worked
on it for over a year.

It was a tremendous
amount of work.

Now, unfortunately,

I'm not doing it for 12.5%.

I want 15%.

I feel a little insulted that
you just let me sit there

listening to all these
Sharks squawking.

And I want 50 cents in
perpetuity on each filter.

There is Kevin with
another bloodsucking offer.

The perpetuity is
obviously a challenge.

I love that word.

That's eating cash flow.

It's a big risk.

Either I'm going to
make a lot of money

or I'm going to lose $500,000.

Winston, this is your
moment. I made you an offer.

What do you want to do?

Is there...?

No.

Four Sharks are out.

Kevin has made an offer
of $500,000 for a 15% stake,

plus a royalty of 50
cents in perpetuity

for Winston's smart air
filter company Woosh.

But Winston is having
trouble with the royalty.

I swear to you, if you
don't take this deal,

I won't even remember
what Woosh is.

50 cents on every
filter for perpetuity.

You
don't have to do it, Winston.

He's insane, and you know
it. You do not have to do it.

It's insane, and you know it.

Mark, if you believe... Winston,
you can counter all you want.

You do not believe, Mark. Greiner: I
mean, Winston, stop and take a moment.

And, Lori, you
passed. Yeah, I believe

that's the fastest way
to go out of business.

It's not going to go out
of business... But, Kevin...

because Mr. Wonderful is helping the business
grow. you're squeezing blood out of a turnip.

Exactly.

The perpetuity
just locks me out.

And I think in the long term...

You're exactly right. You
know what's gonna happen?

In 36 months, we're going
to be sitting together...

You'll be broke.

Just like we were.

You can make a counter.

Can we work with the equity so
you have a stake in the company?

No, because,
look, it's so binary.

It's such a small
piece of the company.

My counter would be...

I'll bring up the word
"perpetuity" again.

Instead of perpetuity,

lock me in for
the royalty for...

three years.

What happens if it takes us
three years to negotiate a deal?

You're getting it for
that entire time or...

But we have no sales, Winston.

We've got you in the
sneakers and the two patents.

The behemoth player

is going to buy me out.

They're not going to let
me keep the 50 cents.

It's the only deal
I'm going to do.

It's time for you
to make a decision.

I'll do the royalty...

but I'd be taking a down
round on the equity.

Can you hold me on
my ask for the equity?

I'll sign up with you on
the royalty for perpetuity.

So what's your proposal?
With the perpetuity,

the 500K, 10%, and you
get 50 cents for every filter.

So, if I stay at
10% on the equity...

Yes. you'll do the
50-cent in perpetuity?

Yes.

Done.

- Yes!
- Wow!

Great deal. Looking
forward to working with you.

I can't wait to work with you.

It's gonna be fantastic.
It's gonna be amazing.

Thank you so much.
Let's have some fun.

Congrats, Winston!
Good luck!

- Good luck!
- Good luck!

You guys, this has been
a dream come true.

Good luck.

Wow.

What a day.

I feel amazing,
and I'm so happy.

Mr. Wonderful called me
the filter roach,

but now
I'm the filter grasshopper,

and now I'm going to learn
from the master.