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Shark Tank: Episode 8 Recap

Posted on 10/06/2009 by Gina in Shark Tank

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Shark Tank

 

by Michelle Spigner

On tonight’s episode of Shark Tank, D.J. Stephan and Sean Conway are up first with an Internet business that will help students study while earning some extra money.

 

D.J. and Sean started up their business Notehall as students at the University of Arizona. Notehall allows students to post their class notes and study guides on the site for other students to buy. The notes sell for around $5 and the students who post their notes receive a cut of the purchase price.

 

The sharks are skeptical because it sounds too good to be true. But D.J. and Sean clear up the details. It is completely legal, the students have the opportunity to see a portion of the notes before they buy them and they can get a full refund if the notes are no good. They have made $30,000 in revenue and their competition just can’t keep up.  They are asking for $90,000 for 10% stake.  Kevin H. and Daymond are out, this type of Internet business deal just isn't for them, but the other sharks are clamoring for a bite of the company.

 

Kevin O. starts the bidding at $90,000 for 51% and Barbara comes back offering the same amount but for 50%. But Sean and D.J. don’t want to give up so much of their company and come back with a counter offer of $90,000 for 15%. And they are so confident that there company will be profitable that they will include an insurance policy that if in 2 years they do not hit $1 million in revenue will give up their portion of the company.

 

Kevin O. isn’t willing to go that low but lowers his offer of $90,000 for 51% down to 35%. Barbara will go even lower, down to 25% for $90,000. Robert raises his investment to $115,000 for 35% and Kevin O., desperate to keep their interest, matches Robert’s offer.
Even with Robert and Kevin O.’s great Internet business experience, the boys chose Barbara. They feel she was the most trustworthy and genuine. But Kevin O. just isn’t satisfied and instead of uttering his classic “you’re dead to me” once he didn’t get the deal, he followed the investors out of the boardroom. Kevin O. told them that they were insane to make that type of deal with Barbara, but wished them luck anyway.

 

Next into the tank is Lisa Lloyd who is asking for $150,000 for 20% in her company Treasure Chest Pets. Her company produces a line of organizers for kids that are disguised as stuffed animals. They are designed to hold toys, knickknacks, books and the like.  A lot is riding on this deal for Lisa. She has invested a lot of her own money and her house is in danger of foreclosure.


The sharks think her product is adorable and her numbers convince them that it can sell. The stuffed animals made revenue of $100,000 in the last year. The demand has become so high, that she doesn’t have enough money to produce the merchandise she needs to fill the orders.

 

Kevin O. has worked in the cutthroat toy business for years and doesn’t want to do it again and is out. Kevin H. doesn’t like that it is such a niche product and is out. Barbara would be very comfortable investing in the company but not for the amount she is asking.  She will give $50,000 for 50%. Daymond offers his unlimited manufacturing capabilities and distribution for 60% and Lisa would only have to cover sales. Daymond invites Barbara in on the deal to invest $150,000 for 60%.

 

Robert senses that it is not the expertise that Lisa needs but just the cash, and will offer the $150,000 she is asking for no equity in return. The investment will act as a line of credit. Lisa decides that she does need more than just the money and goes with Barbara and Daymond.

 

Edwin Heaven is up next with his product Throx that he claims is the cure for the age-old mystery of the missing sock. He is asking for $50,000 for 15% equity in his company. Everyone has been a victim of a sock being eaten by the dryer or just disappearing in the drawer. Well, Edwin has solved this problem by packaging socks in threes, so if you lose one you still have a pair. In his words the product “beats the competition by a foot.”

 

The sharks think it is cute but its too novelty and they don’t see how customers would continue to buy it as a real product. All the sharks are out, and Edwin doesn’t make a deal.

 

Last into the shark tank is Danon Beres, designer and CEO of his accessory company Washed Up Hollywood. Danon learned how to make and design belts and belt buckles from his father. He created Washed Up Hollywood to continue the tradition of designing and selling high-end belts for a reasonable price.

 

He is asking for $500,000 for 25% in his company. He has made $400,000 in the last year and his belts are available in 300 stores in North America including Nordstrom.

 

The sharks like the belts, but they just can’t get past the half a million dollars that he is asking for. They think his company is only worth around $600,000 when Danon valued it at $2 million. The sharks agree that if they were to give him $500,000 dollars they would have to own his entire company to make the deal fair.

 

At this point they have hit a wall. No one is out. The sharks want to invest but $500,000 is just too much, they think he is just being too greedy. For that reason, no one offers him a deal. Sorry Danon.

 

 

Shark Tank airs Tuesdays at 8/7c on ABC.

 

(Image courtesy of ABC)

 

Washed Up Hollywood:

 

Treasure Chest Pets:

 

For more Shark Tank Links visit Sirlinksalot.net

 


  


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