Behind the Scenes of Our Shark Tank Pitch: How We Landed a Deal with Mark Cuban
Last year, Monique (our CEO) and I David, (COO) had the incredible opportunity to pitch our company on Shark Tank. It was a nerve-wracking but exhilarating experience. Today, I want to take you behind the scenes and share what we were really thinking during our episode.
Our Pitch:
We started off strong, introducing ourselves and our Dallas-based company YGN which makes satin-lined head wraps and other hair care accessories. We explained the problem - that traditional head wraps can damage hair and are hard to tie. Our solution is easy-to-use, stylish satin-lined wraps that protect and promote healthy hair.We also showcased our latest invention - the swim turban. It's made with silicone lining to protect hair from harsh salt water and chlorine. This product went viral on TikTok with over 10 million views.The Sharks were impressed with the products, especially Daymond who has connections with our target demographic. We were hoping he or Lori (with her QVC expertise) might invest.
Getting Into the Numbers:
Things got a bit tense when the Sharks started digging into our financials. We shared that we've done over $15M in sales to date as a 6-year-old company. In 2021, we did $7.5M but had raised and subsequently lost $2M, largely due to investing in new products and manufacturing.The Sharks were concerned about our cash burn and customer acquisition costs. We explained our strategy has been to grow quickly to gain market share before competitors can copy us. But we acknowledged it was time to focus on profitability, which we're on track for this year.
Defending Our Target Deal:
A few Sharks started going out, skeptical of our retail distribution plans and valuation. Barbara thought our upcoming Target launch would be a distraction. But she was mistaken - we were already making the headbands from remnant fabric and had the deal in place. It made sense from an efficiency and sustainability perspective.
Landing a Deal with Mark:
With most Sharks out, Mark Cuban made an aggressive offer for 20% equity. We countered, proposing either 12% straight equity or a debt deal with deferred royalties to all Sharks.In negotiations, it's key to provide multiple options so the other party doesn't feel cornered into a yes/no. You want them to have a sense of control.Ultimately, we closed a deal with Mark: $400K debt financed with $3-5 per unit royalties until paid back, plus 10% equity. It was tense and a lot of work, but we did it!
Wrap Up:
Going on Shark Tank was an amazing opportunity to showcase YGN, even with the grilling we got. With Mark Cuban now on our team, we're excited to take the business to the next level. Thanks for coming behind the scenes with us! Let me know in the comments if you have any other questions about our Shark Tank experience.