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Ep413 Episode 413

01/10/13 Season 4 TV-PG

ENTREPRENEUR: Dave Jackson & Dave Petrillo 

PITCH: Coffee Joulies 

ASKING FOR: $150k for a 5% stake

BEST PART OF THE PITCH: Coffee is served at around 180 degrees Fahrenheit. The two Daves have a product that absorbs the heat from your coffee to make it a drinkable temperature within minutes. Then the product releases the heat it absorbed to keep the coffee within the perfect drinking range for twice as long as usual. They say the right temperature to drink coffee is 140 degrees. It won't burn your tongue and gives you the flavor you desire. They had $575,000 in sales last year. They expect to sell over a million buck this year. They've been doing a lot online, but retail stores like Bed, Bath and Beyond and Office Max are now showing interest in their product.

DO THE SHARKS BITE? Daymond believes the evaluation of the company is way too high, so he's out immediately. Kevin offers $150k but wants a royalty of $6 for every unit sold until his investment is recouped. Then the royalty goes down to $1 per unit in perpetuity after that. Lori offers to jump in on that deal, as does Robert. Mark thinks the guys are crazy to go into retail and wholesale because their cost will go through the roof. Lori disagrees so vehemently that Daymond is convinced to jump back in on their deal. Mark offers them $250k for 12%. He prefers that they not go retail right away because he sees this as an opportunity to sell the company down the road for huge money. The Daves step out to call an adviser who is revealed to be author and entrepreneur Timothy Ferriss. While they chat with him, the four partnering sharks chat about possibly changing their offer.

THE RESULT: While the Daves are still on the line with their adviser, Kevin steps out to them with a preemptive counteroffer. They'll drop the royalty rate on the wholesale unit to $3. The Daves reenter the tank to thank Mark for his offer, but they decide to partner up with the other four sharks. They'll likely hammer out the details over some 140-degree coffee.

LEARN MORE: Visit http://www.joulies.com/
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UPDATE: Litter
Sisters Mackenzie and Rachel began their jewelry line, "Litter," after tearing apart their old jewelry and turning them into new pieces. They made a deal with Daymond and Mark that opened up a lot of doors. They had meeting with Frederick's of Hollywood that was set up by Daymond. They have a deal to make products just for them. They are looking to make around $3 million in sales in one year. That's a lot of loot for a lot of litter.

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ENTREPRENEURS: Nicole Townend

PITCH: Teddy Needs a Bath

ASKING FOR: $50k for a 10% stake

BEST PART OF THE PITCH: Nicole's product is the first washer and dryer bag for stuffed animals. The pillow case-like design allows you to throw stuffed animals inside, zip it up and toss it in the washer and then dryer. When done, you have a fresh, fluffy, germ-free animal. Nicole wrote a children's book to accompany her product and she's trying to build awareness to all the germs that get attached to stuffed animals. In six months, she's had $12,000 in sales. Nicole has fun-smelling dryer sheets with scents like cotton candy. Some major retail chains have shown interest in her product.

DO THE SHARKS BITE? Lori believes there are already bags out there like the one Nicole has created. She feels there's a need for something like this, but doesn't know how big it is. She's out. Robert can't see Nicole growing a market out of this product. He's out. Daymond thinks it's a little early for him to invest. Kevin offers $50k for 50% of the business, but he also wants 10% of sales paid to him until he recoups his money. Then it drops to 5% in perpetuity. Mark offers Nicole $100k for 40% of the company. This has Kevin dropping his equity to 30% and also drops his royalty percentage.

THE RESULT: Nicole takes a moment to have a chat with her husband. Kevin threatens to kill the stuffed bear he's holding if she doesn't take his offer. He also offers to drop the "royalties forever" part of his offer and will only take royalties until he gets his money back. Nicole has a counteroffer for Mark. She wants $100k for 30% and a 10% royalty until he gets his money back. Mark says, "Done, done and done." The good news is Nicole got a deal. The bad news is that the bear dies.

LEARN MORE: Visit http://www.teddyneedsabath.com
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ENTREPRENEUR: Jerry & Naomi Hancock

PITCH: SubZero Ice Cream

ASKING FOR: $300k for a 12% stake

BEST PART OF THE PITCH: Jerry and Naomi literally blow the sharks away with burst of frozen air. They've developed a method for making frozen desserts in front of the customers using liquid nitrogen. They are asking the sharks to imagine an ice cream store without any freezers. They make fresh, frozen, custom-ordered ice cream in about one minute. If the ice cream starts to melt, they can actually refreeze it. The sharks say it tastes great and is creamier than regular ice cream. Costs go down because you don't need expensive freezers. They have 18 retail outlets and 8 more that have been sold. They are projecting about $4 million in sales by the end of the year, but they had to buy out a past bad business partner for $500k.

DO THE SHARKS BITE? Daymond likes the idea, but he doesn't have the hours or time to help them grow the business. He's out. Kevin can relate to this pitch because his first job was as an ice cream scooper. But this interesting idea isn't enough for him to invest. He's out. The idea Jerry and Naomi have of bringing in another outsider doesn't make sense to Robert, so he's out. Lori thinks this is a great idea. She believes they can achieve success on their own, so she's out. Mark likes the idea as well, but he doesn't want to be in the ice cream franchise business. He's out, but will still eat some more of their ice cream.

LEARN MORE: Visit http://www.subzeroicecream.com
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ENTREPRENEUR: Beau Oyler & Jared Aller

PITCH: Urbio

ASKING FOR: $300k for a 12% stake

BEST PART OF THE PITCH: Beau and Jared put their minds together to come up with a way for those who live in smaller homes to have indoor plants. They created a modern, vertical garden that's a fully modular system designed to fit on any wall. Magnets allow the plant holders to attach to any metal surface including their own metal wall plates. They've had a great response and have sold in 50 different countries. They have $125k in sales in the first four months.

DO THE SHARKS BITE? Mark has actually been contacted by Beau and Jared before. Because he knows more about the investment than the other sharks do, he feels compelled to disqualify himself from the negotiations right away. In other words, he's out. Kevin offers the guys $300k for 20%. Robert offers them $400k for 20%. $300k of that is for the equity and the other $100k is to hire someone to run the business fulltime. Daymond would want to ask for way more than what his fellow sharks are offering, so he's out. Lori offers them $300k for 20%. Kevin tries to steer them away from Lori by calling QVC's audience old. Lori says, "Sometimes you remind me of a golf ball—small, bald and I want to hit you 300 feet away from me."

THE RESULT: Beau and Jared have three offers on the table. Lori and Robert get into a shark fight over the product. Beau tries to sweeten the deal by showing them all a purchase order from a container store for $150k. This has Lori saying she'll go down to 15%. Robert goes down to 17.5%. Kevin stands firm. The guys decide they want to keep their equity, so they partner with Lori to help their make their indoor plant business truly grow.

LEARN MORE: Visit http://www.myurbio.com/

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