Nui Is STUCK Between The Deals Offered By The Sharks | Shark Tank US | Shark Tank Global
Summary
TLDRIn 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
🍪 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.
💰 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.
Mindmap
Keywords
💡Keto diet
💡Sugar cravings
💡Newie cookies
💡Natural sweeteners
💡Gross margin
💡Valuation
💡Royalty
💡E-commerce
💡Customer lifetime value
💡Equity
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
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