Shark Tank US | Top 3 Biggest Deals Of Season 15

Key Concepts

• Artisan vegan cheese production
• Bionic hand technology
• Robotic miniature restaurant
• Vegan cheese market
• Prosthetics
• Automation in food service
• Equity crowdfunding
• Licensing play
• Factoring
• Valuation
• Distribution
• Manufacturing capacity
• Revenue projections
• Lease program

Rebel Cheese: Artisan Vegan Cheese

Overview

Fred Zar and Kirsten Matland, founders of Rebel Cheese from Austin, Texas, sought $750,000 for 5% equity. Their company produces artisan vegan cheese using traditional cheese-making techniques like culturing and cave aging.

Product and Differentiation

• Rebel Cheese offers over 20 varieties of vegan cheese.
• Key products include creamy rinded Brie, tangy sharp cheddar smoked with real mosquite chips, honey pistachio Chev, sundried tomato formage, and pimento cheese.
• The Brie is made from cashews, water, salt, and culture.
• The company emphasizes the use of traditional techniques to achieve authentic textures and flavors.
• They claim to be the only company producing vegan breis at scale.

Business Model

• Three sales channels: e-commerce (subscription-based, 16%), wholesale (17%), and a restaurant (65%).
• The company pivoted to e-commerce during COVID-19.
• Products are currently in about 100 retailers.
• The cost to make a wheel of Brie is $4.67, landed at the retailer for about $9, and has an MSRP of $15-$20.
• This pricing is comparable to traditional high-end Brie.

Financials

• Last year's sales were $2.5 million, with projections of $3.5 million this year.
• The company has been profitable for 4 years.
• They aim to break even this year due to scaling efforts.
• The goal is to be in 500 stores next year, generating $7 million in distribution revenue.
• The company has a new production facility with a capacity of 8 million wheels per year.

Shark Tank Interaction and Deal

• Mark Cuban initially offered $750,000 for 10%.
• Lori Greiner expressed interest due to her experience with cheese and charcuterie boards through her deal with BORDY.
• Mark Cuban and Lori Greiner partnered to offer $1 million for 10% equity.
• The founders countered, seeking a lower equity percentage.
• Ultimately, they accepted the deal of $1 million for 10% equity from Mark Cuban and Lori Greiner.

Psionic: Advanced Bionic Limbs

Overview

Dr. Adil Okar, founder of Psionic from San Diego, California, sought $1 million for 2% equity. Psionic develops advanced bionic limbs, focusing on accessibility and functionality.

Product and Technology

• The "ability hand" is the fastest bionic hand on the market.
• It provides touch feedback to users.
• Controlled by muscle movements.
• Water-resistant and USB-C rechargeable.
• Used in prosthetics and robotics, including space missions.
• The company makes just the hand, which is then attached to a socket made by a prosthetist.

Impact and Mission

• Inspired by a childhood encounter with a limb-deficient girl in Pakistan.
• The ability hand allows users to perform tasks and experience sensations previously impossible with other prosthetics.
• Sergeant Garrett Anderson, a veteran who lost his arm in Iraq, testified to the life-changing impact of the ability hand.

Founder's Background

• Bachelor's in Biology, Master's in Computer Science, Master's in Electrical and Computer Engineering, PhD in Neuroscience.
• Left medical school to pursue Psionic.

Business Model and Financials

• The hand costs $155,000, with a manufacturing cost of $1,800.
• Over 100 patients currently use the ability hand.
• The company has raised $3.6 million, including $2.2 million through a StartEngine crowdfunding campaign at a $50 million valuation.
• They have also received $2.4 million in grant funding, with an additional $2.7 million expected from the DOD next year.
• Lifetime sales are about $2 million.
• Last year's sales were just over $1 million, with a profit of $100,000.
• Projected sales for this year are around $2 million.
• Current production capacity is about 100 hands per year, with plans to increase to 500 next year and 1,000 or more in subsequent years.

Shark Tank Interaction and Deal

• Kevin O'Leary offered $1 million for 10% equity.
• Lori Greiner and Daymond John offered $1 million for 6% equity, seeking to avoid dilution.
• The founder countered with an offer of $1 million for 2% equity plus 2% in advisory shares, which would be non-dilutive.
• Kevin O'Leary revised his offer to $1 million for 2.5% equity, with Lori Greiner and Daymond John each taking 2.5% equity, totaling 7.5%.
• Ultimately, the founder accepted a deal of $1 million for 6% equity from Kevin O'Leary, Lori Greiner, and Daymond John (2% each).

Robo Burger: Robotic Miniature Restaurant

Overview

Andy Siegel, Dan Braudo, and Audley Wilson, founders of Robo Burger, sought $1.5 million for 5% equity. Robo Burger is a fully autonomous robotic miniature restaurant that cooks hamburgers in under 4 minutes.

Product and Technology

• Robo Burger is a 12-foot box that requires only electricity to operate.
• The robot grills the patty, toasts the buns, adds condiments, and delivers the burger.
• The multi-patented robotic cooking platform can cook anything that's round and ground.
• The company has four patents related to the sandwich cooking process.
• The machine cooks and cleans itself.

Business Model

• The company aims to be a brand extension for other brands.
• They envision placing tens of thousands of machines in various locations.
• A lease program is offered at $3,000 per machine per month.
• The company provides the recipe, warranty, maintenance, and monitoring.
• Food logistics are handled by a third-party company.

Financials

• The company has been in beta for 18 months and sold almost 12,000 burgers.
• They have contracts for 14 units out of the 20 being produced this year.
• Projected revenue for this year is $1.4 million, with a loss of $700,000.
• Projected revenue for next year is $7 million, with a profit of $1.6 million.
• During the beta period, burgers were sold for $5.99 to $6.99.
• The unoptimized cost per burger is $2.25.
• The company claims that some beta locations sold 20 to 30 burgers per day.

Shark Tank Interaction and Deal

• Mark Cuban offered a $1.5 million loan against hard orders at market interest rates, with 10% equity.
• Kevin O'Leary partnered with Mark Cuban, each contributing $750,000 for a combined 10% equity.
• The founders initially hesitated due to the equity percentage.
• After negotiation, the founders accepted the deal of $1.5 million loan for 9% equity from Mark Cuban and Kevin O'Leary.

Synthesis/Conclusion

The three pitches presented diverse business models and technologies. Rebel Cheese secured investment based on its unique product and established profitability. Psionic received funding due to its impactful technology and mission-driven approach. Robo Burger, despite skepticism about its business model, obtained a loan and equity deal due to its potential for disruption and the sharks' belief in the founders. Each deal highlighted the importance of product differentiation, financial viability, and the potential for scalability in attracting investment on Shark Tank.