TrophySmack Are Stunned By Mark Cuban's Offer | Shark Tank US | Shark Tank Global

Summary

Matt Walsh and Dax Holt pitch their company, Trophy Smack, to the Sharks, seeking $600,000 for 8% equity. The business provides unique, customizable fantasy sports trophies, championship rings, and belts. With impressive revenue growth, from $850,000 in year one to $1.9 million in year two, they aim to expand beyond fantasy sports into corporate awards and employee recognition. Despite facing competition, their innovative approach to trophy design and streamlined assembly gives them a competitive edge. The Sharks make offers, with Mark Cuban suggesting a larger stake for the investment, leading to a deal.

Takeaways

• 😀 Matt Walsh and Dax Holt are seeking $600,000 for 8% equity in their business, Trophy Smack.
• 😀 Trophy Smack provides customizable and unique trophies, rings, and belts for fantasy sports enthusiasts.
• 😀 The founders noticed a lack of personalized trophies for fantasy sports, which led to the creation of Trophy Smack.
• 😀 Trophy Smack allows users to select their sport, size, and color to create a custom trophy, with thousands of combinations.
• 😀 The company’s first-year revenue was $850,000 with a net profit of $200,000, which was reinvested into inventory.
• 😀 In the second year, Trophy Smack grew to $1.9 million in revenue with a net profit of $500,000.
• 😀 Despite the pandemic, the company’s revenue in year three has already surpassed $650,000.
• 😀 Trophy Smack has an 80% profit margin, indicating strong business performance and scalability.
• 😀 The founders initially invested $250,000 to get the business off the ground, with the first major sales occurring within the first three weeks of fantasy football draft season.
• 😀 The company’s future potential extends beyond fantasy sports to corporate awards, employee recognition, and youth trophies.
• 😀 Investors Mark Cuban and Lori Greiner show interest, with offers of $600,000 for 25% and 17% equity, respectively, highlighting the company’s growth potential.

Q & A

What is Trophy Smack, and what does it offer to its customers?

Trophy Smack is a company that specializes in providing unique and customizable fantasy sports trophies, championship rings, and belts. Customers can personalize their trophies with various options such as sport, size, and color, offering a wide range of trophy combinations to create the perfect fantasy sports award.

How did Matt Walsh come up with the idea for Trophy Smack?

Matt Walsh came up with the idea in an organic way. He was frustrated by the lack of customizable, high-quality fantasy sports trophies available when he was playing in a fantasy football league. He jokingly suggested to his friends that he should create a massive trophy, but after realizing there was nothing like it on the market, he decided to start the business himself.

What makes Trophy Smack different from other trophy companies?

Unlike traditional trophy companies that offer generic designs, Trophy Smack allows customers to customize trophies in terms of colors, sizes, and designs. Their trophies are modern and innovative, offering options such as blinged-out rings and over-the-top championship belts, which makes them stand out in the fantasy sports space.

How much did Matt Walsh and Dax Holt invest in starting Trophy Smack?

Matt Walsh and Dax Holt initially invested $250,000 into the business to get it started, with an initial $60,000 injection followed by rapid growth in their early sales.

What were the revenue and profit figures for Trophy Smack in its first two years?

In its first year (2018), Trophy Smack generated $850,000 in revenue and had a net profit of around $200,000, which was reinvested into inventory. In the second year (2019), the company made $1.9 million in revenue, with a gross profit of $775,000 and a net profit of around $500,000.

What is the projected revenue for Trophy Smack in the current year?

Despite the challenges of the pandemic, Trophy Smack has seen its revenue increase compared to the previous year. As of the current year, the company has made $650,000 in revenue year-to-date.

What are the growth opportunities for Trophy Smack beyond fantasy sports?

Trophy Smack sees significant growth potential in markets beyond fantasy sports, such as corporate awards, employee recognition, and youth trophies. They are exploring the possibility of expanding into these areas by leveraging their e-commerce platform and unique product offerings.

What is the competitive landscape like in the trophy and award space?

The trophy and award space is highly competitive, but most companies in the industry haven't taken a national approach to e-commerce. The traditional trophy assembly process is costly and inefficient, which is where Trophy Smack differentiates itself with streamlined, more efficient manufacturing and design processes.

Why do other companies in the trophy space struggle to compete with Trophy Smack?

Other companies in the trophy space struggle because the traditional trophy-making process is slow and expensive. Trophy Smack's unique supply chain and logistics, as well as their innovative trophy design and customization options, allow them to deliver better products at a lower cost and faster turnaround times.

What was the reaction from the sharks during the pitch for Trophy Smack?

The sharks were intrigued by Trophy Smack's business model and growth potential, though they had concerns about the valuation and equity offer. Mark Cuban made an offer of $600,000 for 25% of the business, while Lori Greiner was interested but not willing to invest at the original 8% equity offering. Ultimately, the entrepreneurs accepted a deal, although the terms were slightly different from their initial ask.