ENTREPRENEUR: Steve Nakisher & Shane Talbott
PITCH: Talbott Teas
ASKING FOR: $250k for a 20% stake
BEST PART OF THE PITCH: Talbott Teas is designer whole-leaf teas and accessories that are steeped in style. There are 23 blends in this affordable, daily indulgence. The guys had $100,000 in sales in 2009. That grew to $350,000 in 2010. They were at $500,000 for 2011 before hitting the 4th quarter. They had a spike in sales after being declared one of Oprah's Favorite Things. They've been on QVC and want the Sharks to help them capitalize their growth. They have a 50% profit margin before they pay themselves. They've invested $300,000 of their own money and believe they can grow the company to eventually sell it for millions.
DO THE SHARKS BITE? Daymond loves the story, but he's already in the marketplace. He regretfully has to go out due to conflicts. Mark isn't a big tea guy, so he's out. Kevin likes the fact that this product is recession-proof. He offers them $250k for 40% of the business. Robert agrees with Kevin's assessment of the company, but he's out. Lori follows his lead.
THE RESULT: The guys ask Kevin if he'd be willing to reduce his equity at 30%. Mr. Wonderful rarely ever changes his mind after making an offer, but he likes these guys. He goes down to 35%. Steve and Shane take the deal. Looks like these three guys are going to have a little tea party.