Nui Is STUCK Between The Deals Offered By The Sharks | Shark Tank US | Shark Tank Global

Summary

In this Shark Tank pitch, Christofer and Victor present Newie, a low-carb, keto-friendly cookie brand, seeking $300,000 for 10% equity. They share their personal journeys of overcoming sugar cravings by creating a healthier cookie option. With $1.1 million in sales over 12 months, they highlight their product’s key benefits: low sugar, net carbs, and high demand. The sharks express interest, offering various deals involving equity, royalties, and credit lines. After considering the offers, the entrepreneurs ultimately agree to Barbara's deal of $300,000 for 25% equity, confident about scaling their business.

Takeaways

• 🍪 Two entrepreneurs, Christofer and Victor, pitch their company, Newie, which makes keto-friendly cookies with low sugar and carbs.
• 🥥 Newie cookies are made from almond flour, coconut oil, and grass-fed butter, containing only 1 gram of sugar and 2 grams of net carbs per cookie.
• 💰 The founders seek $300,000 for 10% equity in their company, which has generated $1.1 million in sales over the last 12 months.
• 🛍️ All their sales have been direct-to-consumer through their website, but they are launching on Amazon soon and expect sales to double.
• 🧁 Newie cookies are sold at $29.95 per box (20 cookies), with a profit margin of $1 to $1.30 per cookie, though they aim to reduce costs.
• 📦 The company recently moved production to a co-packer but faces challenges with demand and cash flow for inventory.
• 📊 Despite strong sales, their net profit over the last 12 months was only $35,000, and they seek to improve margins and efficiency.
• 👨‍👩‍👦 Both founders come from immigrant families, and their personal stories of hard work and entrepreneurship resonate with the sharks.
• 💼 Kevin O'Leary offers $300,000 with a $1 royalty per sale until recouping his investment, then $0.45 royalty in perpetuity, plus 25% equity.
• 🤝 After negotiating with other sharks, the entrepreneurs accept Barbara's deal of $300,000 for 25% equity, focusing on scaling their business.

Q & A

What product are the founders pitching in the script?

The founders are pitching 'Newie,' a low-carb, keto-friendly cookie with only one gram of sugar.

What is the primary motivation for creating Newie cookies?

The founders created Newie cookies to satisfy their sugar cravings while on a ketogenic diet without consuming unhealthy amounts of sugar.

What are the main ingredients in Newie cookies?

Newie cookies are made with almond flour, natural sweeteners like monk fruit, and healthy fats such as coconut oil and grass-fed butter.

How do the founders plan to make Newie cookies affordable for retail?

Their goal is to reduce the production cost to $6 per box by working with supply partners and buying ingredients in larger volumes.

How much does each box of Newie cookies cost?

Each box of Newie cookies costs $29.95, plus $4.95 for shipping.

What have been the founders' main challenges so far?

Their main challenges have been managing cash flow to meet demand and scaling production as they transition to working with a co-packer.

What are the company's sales figures over the last 12 months?

Over the last 12 months, the company has sold $1.1 million worth of cookies, with $630,000 in sales year-to-date, despite being sold out for half of that period.

What are the sharks' main concerns regarding the business?

The sharks are concerned about the high valuation, the current profit margins, and the scalability of the business given the high production costs.

What offers did the sharks make to the founders?

Kevin offered $300,000 in exchange for a royalty of $1 per sale until his investment was returned, then 45 cents in perpetuity and 25% equity. Barbara offered $300,000 (split into $150,000 in cash and $150,000 as a line of credit) in exchange for 15% equity and a 50-cent royalty per box sold.

What was the final deal the founders accepted?

The founders ultimately accepted Barbara's original deal of $300,000 for 25% equity.

Outlines

00:00

🍪 Introducing Newie: The Keto Cookie Revolution

The founders, Christofer and Victor, introduce their company Newie, which makes keto-friendly cookies with low sugar. They pitch to the sharks, seeking $300,000 for 10% of their company. The founders share how switching to a ketogenic diet changed their lives but also led to sugar cravings, which inspired them to create their low-sugar cookie. Newie cookies contain only one gram of sugar, made from almond flour and healthy fats. They are sweetened with a proprietary blend of natural sweeteners. The sharks receive samples, express interest, and ask questions about the cookies' nutritional content, customer base, and business operations.

05:02

💰 Sharks Weigh in: The Offers Begin

Kevin O'Leary offers a royalty-based deal where he would receive $1 per sale until he recoups $300,000, after which the royalty would drop to 45 cents per sale. Additionally, he asks for 25% equity in the company. The founders thank him and wait for other sharks to chime in. Another shark offers a similar deal but with a 50-cent royalty and 15% equity. Finally, a third shark offers $300,000 for 25% equity and pledges to help scale the company. The founders consider these offers, weighing their potential impact on their business.

Keywords

💡Keto diet

The keto diet is a low-carb, high-fat diet designed to push the body into ketosis, where it burns fat for energy instead of carbohydrates. In the video, the founders discuss how they adopted this diet, lost weight, and felt healthier, which inspired them to create their low-sugar cookies to help others maintain the diet without giving in to sugar cravings.

💡Sugar cravings

Sugar cravings refer to the strong desire to consume sugary foods, often challenging for people on restrictive diets. In the video, the founders highlight how sugar cravings were one of their biggest struggles on the keto diet, motivating them to develop a sugar-free cookie alternative to help manage these cravings.

💡Newie cookies

Newie cookies are the product developed by the founders, designed as a low-sugar, low-carb cookie alternative. Made with ingredients like almond flour and natural sweeteners, these cookies cater to people on diets like keto. The cookies aim to provide the enjoyment of a sweet treat without the negative health effects of sugar.

💡Natural sweeteners

Natural sweeteners, such as monk fruit and erythritol, are used in Newie cookies instead of sugar. These sweeteners provide sweetness without the added calories or blood sugar spikes associated with traditional sugar. The founders emphasize this as a key innovation that allows their cookies to fit into a healthy, low-carb diet.

💡Gross margin

Gross margin refers to the percentage of revenue remaining after deducting the cost of goods sold. The founders mention their goal to reach a 75% gross margin by reducing production costs. This financial metric is crucial as it impacts their ability to scale and generate profits.

💡Valuation

Valuation is the estimated worth of the company. In the video, the founders seek $300,000 for 10% equity, implying a $3 million valuation. However, the sharks challenge this, with some considering the valuation too high based on the company's current financials and profit margins.

💡Royalty

A royalty is a payment made for the ongoing use of an asset, such as a product or brand. In the video, one of the sharks offers a royalty deal where they would receive a dollar per cookie sale until recouping the $300,000 investment, after which the royalty would decrease. This alternative to equity investment helps align the investor's returns with sales growth.

💡E-commerce

E-commerce refers to the buying and selling of goods or services over the internet. The founders emphasize that all their sales have been through their website, which is a core part of their business model. They highlight plans to expand to Amazon, anticipating significant growth in sales.

💡Customer lifetime value

Customer lifetime value (CLV) is a metric that estimates the total revenue a company can expect from a customer over the entire relationship. The founders mention that their customers often reorder their cookies, which supports the high CLV of their e-commerce business, an important metric for their long-term profitability.

💡Equity

Equity refers to ownership shares in a company. In the video, the founders negotiate the percentage of equity they are willing to offer in exchange for investment. Sharks like Barbara offer to take 25% equity, which the founders initially resist due to concerns over losing too much ownership and control.

Highlights

The founders introduce their product, a keto-friendly cookie with only 1 gram of sugar, made from natural sweeteners like monk fruit and almond flour.

They seek $300,000 for 10% of their company, showcasing how the keto diet changed their lives, helping them cut out sugar and lose weight.

Newie cookies are marketed as a delicious alternative to traditional sugary cookies, containing fewer net carbs and calories.

The founders emphasize their cookies’ unique selling proposition: customers can eat a whole box and still consume less sugar than in one traditional cookie.

The business has traction, with over $1.1 million in sales in the last 12 months, primarily through their website and social media influencers in the ketogenic space.

Victor and Christopher share their immigrant backgrounds, highlighting their entrepreneurial spirit and work ethic learned from their parents.

The sharks express concern about the valuation and offer alternatives, such as royalty deals instead of equity.

Mark Cuban, Kevin O'Leary, and Barbara Corcoran make competing offers, sparking debate among the founders over equity percentages and royalty payments.

The sharks praise the founders for their product and story but emphasize that pricing and cost management are key to scaling the business.

The business is currently facing production challenges due to high demand, causing supply shortages despite the significant sales growth.

The sharks warn the entrepreneurs about focusing too much on small equity differences instead of long-term business success.

Barbara offers $300,000 for 25% equity, positioning herself as a mentor who can help them grow rapidly.

Victor and Christopher negotiate with Barbara, attempting to reduce the equity percentage, seeking additional credit for scaling.

Kevin offers an alternative deal with a $1 per sale royalty until $300,000 is repaid, followed by a 45-cent royalty in perpetuity, plus 25% equity.

The entrepreneurs ultimately agree to Barbara’s deal, accepting the 25% equity offer to move forward with scaling their company.

Transcripts

[Music]

next up is a treat that capitalizes on

the keto diet

[Music]

craze hey sharks my name is christofer

and I'm Victor and we are the founders

of new where we make saying no to Sugar

ridiculously easy tasty and fun and

today we are seeking $300,000 for 10% of

our company so a couple years ago our

lives would change forever Victor and I

cut out the sugar and went on a low carb

ketogenic diet and it was amazing I

stopped napping and I lost over 40 lb we

felt Invincible that is until we had to

face our sugar Cravings sugar was

everywhere it was in donuts and brownies

and even in our biggest weakness cookies

so instead of caving in we go to my

mom's kitchen and with no baking

experience created newie a super yummy

cookie with only one gram of sugar newie

cookies are a delicious and nutritious

Harmony of almonds and good fats like

coconut oil and grassed butter you can

eat this whole box of neie cookies and

still consume l sugar than one

traditional cookie we use a proprietary

blend of natural sweeteners that tastes

just like sugar but without all the

sugary consequences so sharks will you

help us make the world a butter place

can we taste it of course absolutely

that's how we bribe you bring on the

neie yeah this is for you mark thanks

Victor that's for you Lori thank you for

you Mr wonderful thank you so much

you're welcome oh it looks good

appreciate it yes M smells great

not bad

delicious how many carbs in this cookie

there are two gram of net carbs per

cookie wow what am I eating here sand so

we use almond flour and we sweeten it

with natural sweeteners uh monk fruit

and AAL how many calories in this if

it's just one cookie the individual I'd

say about 140 calories any protein in

here uh 6 g of protein per serving nice

we have a lot of traction over the last

12 months we've sold $1.1 Million worth

of cookies wo good for you guys how how'

you find your customers so we reached

out on social media to people that were

influential in the ketogenic space which

is growing very rapidly can we hear a

little bit about both of your

backgrounds yeah so uh my parents

immigrated here from Mexico and I feel

like I've been an entrepreneur my whole

life in kindergarten I bought big bags

of candy I sold the individual pieces

door to- door as a way to make money in

junior high I started a lawnmowing

company I became the first person in my

family to ever graduate from college

good for you so my parents came here

from the Philippines and I remember my

dad used to work four jobs just to put

food on the table and he really taught

me what hard work really means and my

mom she used to tell me if you don't

like something don't complain change it

so guys those sales numbers are

impressive you going to tell us how you

did it yes so it's all been through our

website we're not even on Amazon yet

which we are launching this month and

we're expecting our sales to double

making these in a commercial kitchen now

we moved to a co-packer recently finally

part of the challenge this year has been

just being able to meet with demand we

sold $630,000 year datee half of those 6

months we have been sold out can you

give us the numbers on it so we sell

them for $29.95 C the boxes to look get

yeah yeah we sell them for $29.95 plus

$4.95 shipping wow expensive um for how

many cookies each box has 10 packs each

pack has two cookies so it's 20 cookies

what are the margins on this what do you

makeing for depending on the flavor

between $1 and $13 that's the best price

that you could get it down to uh our

goal this years to get to a 75% gross

margin part of it is we're looking to

hire someone in operations that has

great relationships with Supply Partners

as well as uh manufacturing Partners

guys can you get this down to six bucks

in cost that's the goal that's the goal

cuz you can't go into retail if you're

if you're spending more than six makings

and one of our challenges has been cash

to be able to buy inventory to be able

to buy at the volume needed to be able

to reduce the cost over the last 12

months tell me how much you've netted

our net if if we're the last 12 months

is $

35,000 what is your average cost $1250

yeah right so you're basically making

about 11% of profit but our customer

lifetime value is uh do they reorder oh

yes they do what evidence do you have of

that uh we have data cuz it's all

e-commerce guys I'm going to clear the

deck because one of my companies listas

healthy cookies which is low calorie low

net carbs I don't know that we compete

or not compete but it's just not a deal

I can do so for those Reasons I'm out

okay understand guys I like what you're

doing I just can't get close to your

valuation so I will respectfully go

out thank you appreciate your time so I

happen to know a woman that loves

cookies and I mean loves Jennifer eats a

cookie every night before she goes to

bed but I'm trying to get still into

this valuation Kevin I I wonder how you

get there cuz Sol here's the solution

rather than fight about valuation cuz

you're going to have a hell of a fight

I'll make you the same offer I made

Wicked Good Cupcakes when they stood

exactly where you were and they have

become

multi-millionaires here's how it works

it's a dollar a sale that's the royalty

on it until I get my $300,000 back then

it drops to 45 cents in perpetuity and I

get 25% Equity just to be a partner and

stay

motivated I'll never pay you a 3 million

valuation now nor will any other shark

but it doesn't mean you don't have a

great business that's the solution align

our interests there's an offer we

appreciate the offer you like to respect

other folks as well I'll give you an

offer I'll give you the 300,000 150 in

cash 150 in a credit line I want 50

cents for each box of cookies you sell

and I want 15% Equity

ouch this is a deal that I would really

be excited about

[Music]

so I connect with both your stories

coming from immigrant parents as well I

can really appreciate what really having

a PhD is all about the poor hungry

driven and I really feel that both of

you have that so here's my offer 300,000

for

25% ouch but we are going to grow you to

a company that you're going to be very

proud of very soon but it's a few

questions on that what do you mean

you're going to help me scale it I would

get the specifics yeah I mean we would

love to hear bar your attorney no I'm

just saying these kids are entitled to

yeah we would love to hear how that

would work cuz at 25% is a lot you still

own 75 after this deal right what you

want to do is grow the large pizza and

get a nice piece of it all right guys

look 25% is

crazy I'm asking for 2 and 1/2% Equity

I'm going to give you massive social I'm

already in this space like crazy and 2

and 1/2% Equity is just is there so that

when you exit I get a

tip 25% for 2 and a 12% you won't be

able to get him on the

phone I've been looking at the space of

cookies now for a while and it's

something that we've been wanting to

take wide really quickly and we thinking

direct consumer is the best process I

get two young entrepreneurs I believe in

but more important is what you guys can

inherit and the position I'm going to

put you in

[Music]

would you come down to

20% with an opportunity for a line of

credit because we know that as we scale

we're going to need uh some additional

funds for cash

flow guys 25% is the best deal don't do

that that's way too much Equity way too

much it's

crazy we just don't know how we could do

25% you've got to decide kids can we do

that

cash Barbara would you be able to do

300,000 uh cash with a line of credit

for

15% no it's 150 and 150 you understand

that there's a 50 Cent royalty on that

50 cents is nothing are you changing

yours well I'm just pointing out you

guys real you guys realize you're

arguing you weren't willing to give up

Equity but you're arguing about this

other form of payment

that will probably end up costing you

more than the equity would have cost you

I'm I'm going to say one more thing cuz

I like you sometimes you have to

understand when an opportunity of a

lifetime is hitting you and when you're

cashing your check of several hundred

million you're not going to worry about

the 5% or the 10% and I'll tell you what

I'll do 22 and A2 I'll split the baby

with you and I get a $1 royalty instead

of a 50 Cent you guys keep on going

backwards that's

crazy could we go back to the initial

deal if you're willing to do that 25%

original deal we're

in we got there you

go about Circle we're going to have some

fun yeah