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Shark Tank Business Lessons

First up in the Shark Tank was the Profender by Tony Devine, who was asking for $75,000 in exchange for 15% equity (Which is a $500,000 Valuation).  The Profender is a basketball training tool to help shooters simulate game situations where a defender is closing out on them to contest the shot.  The way this is currently done in most training situation is by having assistant coaches use brooms to extend their reach while basketball players practice shooting the basketball.  Profender as Seen on ABC's Shark Tank Mark Cuban validated that the product has use and utility.  The main concerns came down to the ultimate size of the market for the product and the price point.  Since there are so many school related & professional basketball teams globally, the talk on the set came down to if there is a market for the family consumer to put it in their driveway.   With the price point of the Profender became a major issue for the Sharks.  At virtually $500 per unit, the price seemed too high for the consumer market, which was evidenced by the reactions on twitter.

Reactions to Profender on Twitter

After all of the other Sharks bowed out, Mark Cuban was the last remaining Shark.  Robert Herjavec asked Mark Cuban if he was in or out.  Cuban clearly thought the product was good, but he backed out citing the fact that he didn’t think the market was big enough to make it worth the time he would invest into the business.  This harkens back to a key lesson we have pointed out in prior episodes, which is that the Sharks and other Investors are typical not going to devote a lout of time to run the business for the founders.  The founders have to have the desire, drive, and energy to push to live, eat and breath the business 24/7.  Two Lessons learned here:  #1 Don’t overprice the market for your product.  That only works for luxury goods or goods that are valued by scarcity.  #2.  BE the driving force behind your business or Accept the fact that you are better off being employed. 

Nardos Naturals LogoSecond up in the Shark Tank were the Mastranardo brothers from St. Petersburg Florida.  There are four Mastranardo brothers to the business known as Nardo’s Natural Organic Skin Care, a line of high quality skin care products.  The Mastranardo brothers were asking for $75,000 for 12% of the business ($625,000 Valuation).  The brothers had a great camaraderie, and seemed to make a energetic team, which elicited Daymond John to positively compare them to his four person partnership with FUBU.  The main drawback for the Sharks were the small amount of gross revenues at the time of taping, which were $30,000.  This was a small sum that definitely did not jive with the fact that the brothers projected Gross Sales to be $4.8 million dollars in two years of time.   The current gross sales did not justify the valuation, nor did they justify the projected sales.  Mark Cuban pointed out that the brothers had already been in business for at least a year and had not enough accounts up to that point to make it getting to over 4 million dollars in sales seem feasible.

Fortunately for the Mastranardo brothers, they had the presence about them to entice Barbara to make an offer for Nardo’s Natural Organic Skin Care.  Naturally, she offered significantly less $75,000 for 50% of the company ($150,000 Valuation).  After a short consultation in the hallway, the brothers came back in to take the offer.  Why did Barbara do it?  Clearly she felt that the Brothers as a collective unit would make the business happen, plus she also felt that they would be brand-able.  Investing in brand-able products or people has clearly been her play in the Shark Tank, which was evidenced by the Update Segment on Pork Barrel BBQ

Two More Lessons Learned here:  #1.  If your business is a retail product, then have a branding angle for marketing and differentiation purposes.  #2.  Be a business owner that investors can believe in, meaning be all in and committed to see it through to make it over the hump.

Rent A Grandma as Seen on ABC's Shark TankThird up on the Shark Tank was the Los Angeles based Todd Pliss of Rent A Grandma.  Pliss was asking for $150,000 for 20% equity ($750,000 Valuation).  Rent A Grandma is a domestic assistance staffing service that differentiates itself by offering experienced domestic help.  The workforce of the company would typically be of Baby Boomer age, who offer a lifetime of experience.  Gross sales for Rent A Grandma at the time of taping weren’t much, which was the first issue that  the Sharks had.   After that the Sharks questioned the Gross Profit Margins, which were 15% of billing.

Todd Pliss had also just started franchising at the time of taping, and pitched that aspect of the business to the Sharks.  In general, I suspect that Sharks aren’t that interested in being Franchisors, since it is complex business model with an additional set of customers, namely the franchisees.  Ultimately though, the business was not far along enough to really pique the interest of the Sharks, and even though they admitted that it was a smart concept, they did not invest.

Lesson to take away from this segment is to make sure to copyright a good name, as Todd Pliss had done with Rent A Grandma.  Barbara Corcoran, a branding expert acknowledged that Todd Pliss was smart to do that.

Litter Jewelry as featured on ABC's Shark TankLast up on the Shark Tank were the sister duo of Litter Jewelry.  Mackenzie Burdick and Rachel Mann are from San Francisco.  Rachel and Mackenzie were there asking $80,000 for 51% (~$157,000 Valuation).  Yes, you read that right, the sisters were willing to give up controlling stake in Litter Jewelry.  This is really key, as the key to their segment was that they were really just hoping to be designers, and not really be in the charge of the full operation.  This ties back to the lessons from the first segment.  Given that they were not interested in running the entire business operation themselves, they really were looking for Investors to do the work for them.  As we have mentioned before, and Mark Cuban mentioned in the opening segment, Time is a precious commodity, and Investors are not there to work, but to put their money to work.  With that being said, it made sense that they settled on the offer from Daymond John that essentially was an employment offer with a 30% royalty on the lines that they design.

So we really have the same Lesson Learned from the Profender segment.  If you are not going to see the entire business through, and just want to focus on the creative, be prepared to work for someone else.  

Recaps of Previous Shark Tank Episodes with Recaps of the Business Lessons from Each pitchWant to read recaps of previous Shark Tank episodes? Click here to see the entire collection episode recaps, all of them with business lessons you can take away from each pitch.

For More information on how Just Elementary, Inc, Business Brokers can help you with Valuation Matters & Negotiation Techniques for your business contact our Client Care Manager Sonia Chhabra at (888) 926-9193 or email

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