Shark Tank US | Kevin Gets Pushed Out Of Simply Good Jars Deal

Summary

Jared Cannon, a chef from Philadelphia, pitches Simply Good Jars, a company revolutionizing packaged salads, seeking $500,000 for 7% equity. Offering fresh, nutritious salads in reusable jars, the business pivoted to retail during COVID-19, expanding from 4 to 230 locations. Despite current losses, Jared aims for national distribution and a $50-100 million valuation in two years. After negotiations, he secures a $500,000 investment for 10% equity from two 'sharks', combining their expertise to grow the business.

Takeaways

• 🍽️ Jared Cannon is seeking $500,000 for 7% equity in his company, Simply Good Jars, which offers healthy meal options in jars.
• 👨‍🍳 He is a chef from Philadelphia, passionate about creating exquisite meals, including a signature smoked salmon salad.
• 🥗 The product is a packaged salad that can be eaten directly from the jar, with a 9-day shelf life, aiming to revolutionize convenience food.
• 🌟 The jars are designed to be returnable, promoting sustainability and donating a meal for every jar returned.
• 📈 The business model pivoted from smart coolers in public places to retail due to the COVID-19 pandemic.
• 💸 The company has raised $2.5 million to date and is on track to do $700,000-$750,000 in revenue this year, after making $300,000 last year.
• 📉 Despite increased revenue, the company is not yet profitable and is expected to continue losing money for another year.
• 💼 Jared started the company with a $1,000 loan and currently owns 51% of the company, with a diverse cap table of other investors.
• 🤝 The sharks offer a mix of deals, including debt with interest and equity deals, with concerns about future funding rounds and company valuation.
• 📊 There's a debate among the sharks about the company's future, with some seeing potential for growth and others concerned about the financial burn rate.

Q & A

What is the name of the company seeking investment?

The company seeking investment is 'Simply Good Jars'.

How much equity is Jared Cannon offering in exchange for the investment?

Jared Cannon is offering seven percent equity in his company for the investment.

What is the amount of the investment Jared Cannon is seeking?

Jared Cannon is seeking an investment of five hundred thousand dollars.

What is the unique selling proposition of Simply Good Jars?

Simply Good Jars offers fresh, nutritious salads packed into easy grab-and-go jars that can be eaten directly from the jar or shaken to mix.

What is special about the smoked salmon salad prepared by Jared Cannon?

The smoked salmon salad is described as having pearled couscous, fennel, radish, feta, and aji amarillo vinaigrette that is claimed to be exquisite.

How does Jared Cannon plan to scale the business?

Jared Cannon plans to scale the business by taking it to national distribution within 18 months, leveraging relationships, production, and distribution.

What was the revenue of Simply Good Jars last year?

The revenue of Simply Good Jars last year was just shy of three hundred thousand dollars.

What is the projected revenue for Simply Good Jars this year?

The projected revenue for Simply Good Jars this year is between seven hundred thousand and seven hundred fifty thousand dollars.

What was the loss of Simply Good Jars last year?

The loss of Simply Good Jars last year was nine hundred thousand dollars.

How much money has Simply Good Jars raised to date?

Simply Good Jars has raised two and a half million dollars to date.

What is the current ownership stake of Jared Cannon in the company?

Jared Cannon currently owns 51 percent of the company.

What is the proposed offer from one of the sharks involving debt and equity?

One of the sharks proposed an offer to invest five hundred thousand dollars as debt at nine and a half percent interest and take seven percent equity, which would be diluted down to about four percent.

What is the final deal agreed upon by Jared Cannon and the sharks?

The final deal agreed upon was an investment of five hundred thousand dollars for ten percent equity, split between two sharks, effectively giving each shark five percent.

Outlines

00:00

🥗 Introducing Simply Good Jars

Jared Cannon, a chef from Philadelphia, is seeking $500,000 for 7% equity in his company, Simply Good Jars. He presents a unique concept of packaged salads in jars, aiming to revolutionize the way people eat on-the-go. The salads are fresh, vibrant, and nutritious, with a 9-day shelf life. The jars are designed to be reusable, with a promise to donate a meal for every jar returned. Jared showcases his product, a smoked salmon salad, and explains the convenience of the jars. He also discusses the impact of COVID-19 on his business, which led to a shift from smart coolers in public places to retail. The company has quickly adapted and expanded its retail presence, with plans to scale nationally.

05:01

📈 Scaling Up and Financial Projections

Jared shares his company's financials, revealing that they made nearly $300,000 last year and are on track to make $700,000 to $750,000 this year. Despite the growth, the company is not yet profitable and has raised $2.5 million to date. He discusses the challenges of scaling the business and the need for further funding. The sharks express concerns about the company's financial trajectory, with some suggesting that Jared might lose control of the company due to dilution from future funding rounds. The discussion also touches on the potential for national distribution and the company's plans to become a $50 to $100 million business within two years.

10:02

💸 Negotiations and Final Deal

The sharks engage in negotiations, offering different deals to Jared. One shark offers a debt deal at 9.5% interest for 7% equity, while another suggests an equity deal at a lower interest rate. There's a discussion about the potential need for further funding and the risks involved in scaling the business. Eventually, two sharks decide to collaborate on an investment, offering $500,000 for 8% equity, which is later negotiated to 10% equity. The deal is finalized, and Jared expresses gratitude for the support and the opportunity to grow his business with the help of the sharks' expertise.

Keywords

💡Equity

Equity refers to an ownership interest in a company. In the context of the video, the presenter is offering a percentage of his company's equity in exchange for an investment. The script mentions 'five hundred thousand dollars for seven percent equity in my company,' indicating a direct trade of a portion of the business for capital to help it grow.

💡Sharks

In the context of the video, 'sharks' refers to the investors on the show 'Shark Tank,' who are considering investing in the presenter's business. The term is used metaphorically to imply that these investors are savvy and may be aggressive in their pursuit of a good deal, as suggested by the line 'sharks if you couldn't tell I'm a chef.'

💡Simply Good Jars

Simply Good Jars is the name of the company being pitched in the video. It represents a brand that aims to revolutionize packaged salads by offering fresh, nutritious meals in a convenient jar format. The script emphasizes the convenience and health aspect of their product with phrases like 'eat healthier meals' and 'fresh vibrant nutritious salads packed into our easy grab-and-go jars.'

💡Returnable Jars

The concept of 'returnable jars' refers to the company's initiative to promote sustainability by reusing jars returned by customers. This is highlighted in the script with the statement 'all our jars are returnable,' showing the company's commitment to reducing waste and giving back to the environment.

💡Shake and Bake

The term 'shake and bake' in the video is used to describe the process of mixing the salad by shaking the jar. It's a playful term that suggests ease and convenience, as indicated by 'so just shake it up and the salad will mix itself.'

💡Smart Coolers

Smart Coolers are mentioned as a previous distribution method for the salads, placed in locations with captive audiences like hotels and airports. The script discusses the shift from this method to retail due to the COVID-19 pandemic, illustrating the company's adaptability.

💡Retail Pivot

A 'retail pivot' refers to the company's strategic shift from selling primarily through smart coolers to selling in retail stores. The script describes this pivot with 'we had to figure out how are we going to follow that customer to where they were now, right which was at home working shopping, at their local store.'

💡Cloud Kitchens

Cloud Kitchens are mentioned as a partner for the company's meal delivery platforms. This concept refers to commercial kitchens used by multiple food delivery businesses, as indicated by 'we partnered with cloud kitchens and we're able to list our products on these meal delivery platforms.'

💡Series A

A 'Series A' is a round of venture capital funding for startups. The script discusses the potential need for a Series A funding round with 'event if I'm gonna raise a Series A I'm gonna lose control,' highlighting the presenter's concerns about dilution of ownership.

💡Dilution

Dilution in the context of the video refers to the reduction in ownership percentage as more investors come on board. It is discussed in relation to raising more funds, as in 'you're not going to dilute yourself anymore,' suggesting that the presenter is trying to minimize the impact on his ownership stake.

💡National Distribution

National distribution refers to the company's goal to expand its product availability across the country. The script mentions this ambition with 'we're looking to take to a national distribution in 18 months,' indicating a strategic growth plan.

Highlights

Jared Cannon introduces Simply Good Jars, a company aiming to revolutionize packaged salads.

Seeking $500,000 for 7% equity to scale the business.

Cannon is a chef with a passion for creating healthy and delicious salads.

Presents a signature smoked salmon salad with unique ingredients.

Simply Good Jars offers fresh, nutritious salads in easy-to-grab jars.

Salads are designed to be mixed by shaking the jar, making them portable and convenient.

Jars are returnable, promoting sustainability and charity with each return.

The business model includes smart coolers placed in locations with captive audiences.

Covid-19 pandemic forced a pivot from coolers to retail distribution.

Quick adaptation to retail, expanding from 4 to 230 locations within a short period.

Partnerships with Walgreens and C-stores, as well as meal delivery platforms, for distribution.

Jars are sold for $8.99 to $10.99, with a wholesale price of $5 to $6.

Production costs are between $2.50 to $3.60 per jar.

Last year's revenue was $300,000, with a projected $700,000 to $750,000 this year.

Company is not yet profitable and is projected to lose money for another year.

Total funds raised to date amount to $2.5 million.

Cannon started the company with a $1,000 loan and owns 51% of it.

A deal is struck with two investors for $500,000 investment for 10% equity.

Highlight of the potential for national distribution and scaling to a $50 to $100 million company.

Discussion on the necessity of further funding rounds and the risk of dilution.

Concerns raised about the financial sustainability and the need for rapid growth to avoid failure.

Cannon's determination to avoid multiple funding rounds and to achieve rapid sales growth.

Final agreement on investment terms with a collaboration between two investors.

Transcripts

[Applause]

first into the tank is an easier way to

eat healthier meals

[Music]

hi there my name is jared cannon from

the great city of philly and i'm seeking

five hundred thousand dollars for seven

percent equity in my company

sharks if you couldn't tell i'm a chef

i've prepared some of the most exquisite

meals you can even imagine but my

favorite to prepare is you're never

gonna guess

a salad but not just any salad sharks i

make a mean smoked salmon salad with

pearled couscous fennel radish feta and

aji amarillo vinaigrette that will knock

your socks off what if i told you you

could have a five-star meal served to

you right in a jar well that's where we

come in simply good jars we are

revolutionizing the packaged salad to

create simply delicious simply beautiful

meals bursting with every bite so say

goodbye to messy flavorless and boring

greens and hello to fresh vibrant

nutritious salads packed into our easy

grab-and-go jars so just shake it up and

the salad will mix itself you can eat

directly out of the jar and if you take

a break or make a move simply cap it and

you're good to go and the best part all

our jars are returnable so for every jar

that we get back we not only reuse it to

help mother earth but we also donate one

meal to feed someone in need good for

you sharks in simply good jars we

believe fresh healthy food should be

easy to grab as a bag of chips so tell

me who wants to shake things up and help

us create the new standard for eating on

the go

can we try it of course

it really shakes yeah you know really i

really thought seeing it all layered

there that it wouldn't yeah it's very

deceiving

yeah

just want to shake the other one now

[Laughter]

okay

smoked salmon this is very very thank

you thank you it's really good thank you

it's fresh

wow it is fresh

what's the shelf life of it so it's a

nine-day shelf life why can't anybody

just put together a jar that's shake and

bake and i made it at home right

so the the whole jarred salad thing is

like a pinterest fad it's been around

forever but nobody's ever commercialized

it i see a cooler here are you selling

this where people are putting it into

their own coolers so before

kovid the primary revenue driver for our

business was you know really supported

by this fleet of the smart coolers that

we would put into places where there was

kind of a captive audience not a lot of

access to food let alone fresh food what

kind of places uh hotels airports uh

convention centers office buildings

universities so after kovit so as you

would imagine all the places that we had

distribution

ninety-eight percent we're not gone yeah

right yeah so

literally almost overnight so we had to

figure out how are we going to follow

that customer to where they were now

right which was at home working shopping

at their local store

and we were able to very quickly make

the pivot to retail

and the reality was salad bars went by

right

grocery stores

yeah oh yeah and they might not come

back the industry thinks that they do

come back it's still going to be about

two years great point yeah and jerry how

did you get into retail how did you make

that transition so

between easter

and memorial day we went from four

locations to 230 doors wow we launched

walgreens in chicago and then we

launched 175 c stores and we partnered

with cloud kitchens and we're able to

list our products on these meal delivery

platforms where now we get low friction

trial because you can maximize your

margin

that they take

oh yeah

it's only 10

okay but are you going to actually as a

company set up a cloud kitchen for each

major demographic so our contract with

cloud kitchens is national and what do

you sell one for

so jars sell from 8.99 to 10.99 today

and what do you sell it to the retailer

for so on the wholesale model we're

selling it five to six dollars it costs

us about 250 to 360. you're making about

350 each

all right why don't we talk about your

numbers so first of all

excellent excellent exercise oh thank

you so so what did you do last year and

then what are you on track to do this

year so last year we did just shy about

three hundred thousand dollars three

hundred thousand three hundred thousand

last year hold on wait i wanna make sure

that i heard the evaluation correctly

you you want five hundred thousand for

seven percent oh yeah all right talk to

me baby what are you on track to do this

yeah so we're already we're 475

year-to-date we're on track to do about

700 750 this year

7.50 and how much will you make on that

uh we we're not profitable we won't be

for about a year and how much have you

raised we raised 2.5 million to date

now wow i know

a lot of that was predicated on buying

60 of these things

and and really funding that model you

did say that you're not going to make

any money this year correct what did you

lose last year

900 000

last year you lost 900. yeah how much

would you probably lose that this year

again

we more than doubled our revenue

but hear me out so this is a food

company that we're looking to take to a

national distribution in 18 months we

have the relationships the production

and the distribution we're building this

to 50 to 100 million dollar company in

the next two years how much of your own

money did you invest in this so i

started this entire company on a

thousand dollar loan okay and oh yeah

i've been working on this for probably

five years and how much of the company

do you own

51

ooh

who owns the other 40. we have probably

about a cap table of maybe 12 other

individuals and groups but i've

assembled a team to take this to scale

in a big way and do it smart so we're

paying for that jared i think i think

you're in trouble i hope not i i don't

believe i'm in trouble you know you're

going to need several more raises you're

not going to be in control of the

company anymore because you're fifteen

control right here today i'm not i'm not

worried about that i'm worried for you

man why look event if i'm gonna raise a

series a i'm gonna lose control no

entrepreneur that's gonna take something

to the level that we we are shooting for

is gonna have 80 of the company in this

pocket do you remember plated yeah oh

yeah that was my deal your numbers are

identical in the second year we were

losing between 900 and 1.5 million for

three years in a row right it is

expensive baby sure so that was a big

big big burn and it was scary the living

you know what out of me until we sold it

to albertsons for 340 million dollars so

i'm a believer in this space

and i like the product so i'm thinking

you're gonna need to raise somewhere

between another five and 10 million

bucks exactly what we're doing right now

okay and so that's extremely dilutive

i'm gonna make you the same offer i made

the plated guys they choked on it but we

all made a lot of money later i will do

the 500 000 as debt at nine and a half

percent and i'll take the seven percent

as equity so that you're not going to

dilute yourself anymore and that seven

percent is going to get diluted down to

about four by the time you finish yep

and it'll help you with the more than

that

i love the deal

so i'm definitely considering it it's

not off the table jared i love it except

i just realized something

um

i don't think it's gonna work

i actually think you're going to start

losing far more money

as you get bigger and the only light at

the end of that tunnel is somebody

buying you out you got to be everywhere

tomorrow

i

i see too much risk for me in this i

hear you i'm out i appreciate it thank

you very much

yeah yeah so

i think you're in trouble

but i actually like you so much maybe

because of the salad that i you started

with a thousand dollars

i think you're gonna have to raise a lot

of money or you're gonna die and i see a

lot of these deals but i just don't know

if you're gonna be able to make it

through that critical time sure and this

is the critical time right and for us

500 doors represents 5 million i know it

is but but i don't want it to be a

critical time for my money so i'm out

listen

you were in a situation in covid it

wasn't working everything closed down

you created something new

i would actually consider going in on

this deal with kevin

kevin um i would consider that

because i don't normally i'm a lone

shark i like to do things myself but the

reason why i consider is because i think

with my

sales and marketing skills packaging

skills and i like kevin

and his experience with plated i find

very i think it's a good combo because

we get the marketing from lori but i

want to work with you on the a round

yeah look i'll make it official i'll go

in with her same deal we'll go 50 50.

exactly the terms detailed i want to

work on funding the next round or do you

want to hear what mark has to say

well mark's quiet over there yeah mark's

always quiet i always want i always want

to entertain what's in front of me too

so yeah want to throw your

foot in please do so

i'll match their offer but at three

percent interest but i'm gonna suggest

that we don't push for the series a

that's a mistake you will never be a

plated if you stay small

look you're already positioned to scale

yes right this is this is tough

you know what

i would not be a billionaire

if i had just kept on raising money over

and over and over again i'm with it

right yes and damn that's nice to say

yeah we're not gonna have to keep

raising we're gonna be doing something

that's just putting it on the tape right

there hey

jared here's how i look at it you know

you have three very different people

sitting here i do i don't think we're

going to have to worry kevin wants to

like raise more money but what i like to

do is i like to get so many sales and do

it so fast and blitz out so so laura you

and i should be working together that

you're not going to have to do a whole

bunch of races she's right she's

actually right on that yeah you know

what jared i'll change my offer

i'm not gonna do it as a loan i'm gonna

do it as equity i'll offer you five

hundred thousand dollars for seven

percent

did you want me in on it i'll do that

deal as actually

oh the two of us you mean would you be

willing to go in with mark as an equity

deal five hundred thousand

eight percent four and four call today

you make it ten percent i'll split it

with her

if you make it ten percent i'll do that

deal does that work we go up a little

bit in dollars

you're getting two sharks you're getting

you're getting two sharks and we're

going to increase your sales come on

yeah okay 10 deal done done boom

congratulations thanks guys i appreciate

everyone's time thank you very much good

job jeremy

great job good job

yeah having two sharks on board today to

shake this thing up get out there sell

some jars change the world one jar at a

time i want to say i wouldn't be a

billionaire

but i mean that's just i mean it's just

like there i mean you know what i like

saying it

you