The Sharks Fight For A Deal With Little Elf | Shark Tank US | Shark Tank Global

Summary

Brian Pea, a 21-year-old inventor from Massachusetts, pitches his product, the Little Elf Gift Wrap Cutter, to the sharks on Shark Tank. Seeking $150,000 for a 15% stake in his company, Brian demonstrates how the cutter makes wrapping paper cuts smooth, straight, and easy. Despite a 10-13% royalty deal with a major gift wrap company, he handles the business solo, earning $250,000 in sales. Two sharks, Lori and Kevin, make competing offers, with Lori ultimately winning Brian over with a $150,000 offer for 20% equity. Brian accepts, believing Lori’s expertise and QVC platform will be the key to success.

Takeaways

• 😀 Brian Pea, a 21-year-old inventor from West Boston, Massachusetts, seeks $150,000 for 15% of his company, Little Elf Gift Wrap Cutter.
• 😀 The Little Elf is an innovative, easy-to-use gift wrap cutter designed to eliminate jagged, crooked cuts when wrapping presents.
• 😀 The product operates by measuring the paper, sliding it into a blade-embedded slot, and pushing it forward to make a smooth, straight cut.
• 😀 Little Elf is priced between $5.99 to $7.49 on the company website, while a two-pack is sold for $13.99 on Amazon.
• 😀 Brian's business has generated $250,000 in sales, and he owns 100% of the company, with a licensing agreement with a major gift wrap company.
• 😀 The licensing deal with the gift wrap company grants Brian 10-13% of retail sales for 2 to 4 years, but he can sell online independently.
• 😀 The product's manufacturing cost is $2.90, with an average sales price of $15, giving the company high profit margins.
• 😀 Brian has not yet spent money on advertising and is seeking assistance with driving online sales, especially through TV shopping channels like QVC.
• 😀 Two offers are made: Lori Greiner offers $150,000 for 25% equity with no royalties, while Kevin O'Leary offers $150,000 for 10% equity plus a dollar royalty until he recoups $450,000.
• 😀 After considering both offers, Brian accepts Lori Greiner's deal, believing she can help him grow the product through QVC and online channels.

Q & A

What is the product that Brian is presenting in the Shark Tank?

Brian is presenting the Little Elf, a gift wrap cutter designed to make cutting wrapping paper easier, faster, and cleaner, with an easy-to-use mechanism that ensures straight cuts.

How much money is Brian seeking for his business?

Brian is seeking $150,000 in exchange for a 15% stake in his company.

What makes the Little Elf cutter unique compared to regular scissors?

The Little Elf cutter allows users to make smooth, straight cuts on wrapping paper in just a few seconds, avoiding jagged or crooked edges that usually result from using scissors.

How does the Little Elf cutter work?

To use the Little Elf, you measure the paper to your desired length, slide the Little Elf back to drop the paper into a blade slot, and then move the Little Elf forward to make a smooth, clean cut.

What is Brian's educational background?

Brian is a junior at Stanford University, where he is studying product design.

How did Brian come up with the idea for the Little Elf cutter?

Brian has always had a knack for coming up with ideas to solve problems. Despite struggling with dyslexia, he persevered and developed the Little Elf cutter as a solution to a common holiday frustration.

What is Brian’s sales figure for the Little Elf cutter so far?

Brian has generated $250,000 in sales to date for the Little Elf cutter.

What is Brian’s cost to make the Little Elf, and how much does he sell it for?

The cost to produce the Little Elf is $29, while the average selling price is $15, with some units priced between $5.99 and $7.49 depending on quantity.

What type of business model does Brian currently operate?

Brian operates his business through a licensing agreement with the world's largest gift wrap company, earning 10-13% of retail sales, but he is free to sell online, on QVC, and HSN.

What are the offers that Brian receives from the sharks?

Brian receives two offers: Lori offers $150,000 for 20% equity without royalties, while Kevin offers $150,000 for 10% equity with a $1 royalty per unit until he recoups $450,000.

Why does Brian eventually choose Lori’s offer over Kevin’s?

Brian chooses Lori’s offer because she has a strong track record with QVC, and she offers a straight equity deal without royalties, which aligns better with Brian’s goals and vision for his company.

How does Lori plan to help Brian’s business grow?

Lori plans to leverage her expertise in selling on QVC to help Brian’s business explode in sales, emphasizing how popular gifting products are during the holiday season.

How did Brian overcome his challenges with dyslexia?

Brian was diagnosed with severe dyslexia in elementary school, which caused him to struggle academically. However, he was transferred to a school for dyslexic students and later embraced his creative strengths, ultimately using them to design the Little Elf gift wrap cutter.