Foam Party Hats
DEAL
EPISODE SUMMARY
🕓 Air Date: November 13, 2020
Asking For:
$100,000 for 15%
Investor:
Mark Cuban, Lori Greiner (50/50)
Deal:
$100,000 for 25%
PRODUCT SUMMARY
Foam Party Hats offers a wide range of customizable foam hats for various occasions and events, bringing fun and creativity to celebrations.
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Background Story
The idea for Foam Party Hats originated at a wedding in Venezuela over 15 years ago when Grace Rojas’ creative mother decided to craft unique foam hats to make the event more special. Fast forward to 2017, and Grace, along with her partner Manuel Rojas, founded Foam Party Hats in the United States.
The company boasts a collection of over 600 handmade foam hat designs that are fully customizable, reflecting the Rojas family’s passion for creativity and celebration. Their journey to entrepreneurship was inspired by the desire to spread joy and add a touch of uniqueness to every gathering, creating lasting memories for customers around the world.
The Product
Foam Party Hats offers a delightful array of foam hats that add a touch of whimsy and celebration to various occasions. These hats are handcrafted in the USA and are fully customizable to suit any event or theme.
Whether it’s weddings, parties, or special gatherings, Foam Party Hats has a hat to fit the occasion. The hats are not only fun but also serve as conversation starters and memorable keepsakes for event attendees.
They come with unique designs, including customizations like personalized names or messages, making each hat a distinctive piece.
How It Went
The company’s position before Shark Tank
Foam Party Hats has shown steady growth since its inception in 2017. Their sales increased from $25,000 in their first year to $145,000 in 2020. In 2021, despite the pandemic’s challenges to the wedding industry, they’ve already surpassed last year’s sales with a current total of $153,000. Their customer base primarily consists of individuals planning weddings and special events, and their products are also found on online marketplaces like Amazon.
The company is structured as a family business, with Grace Rojas being the primary designer and Manuel Rojas contributing to its growth while maintaining his full-time job as a chemical engineer. They’re currently seeking an investment of $100,000 to help scale up the business. Their main expenses include the cost of production, which ranges from $2 to $3 per hat, and labor costs amounting to approximately $7 per hat.
The Negotiations:
During the pitch, the entrepreneurs initially sought $100,000 for 15% equity in their company, Foam Party Hats. Lori Greiner and Mark Cuban offered $100,000 for 25%, with the flexibility of Manuel keeping his current job. Daniel Lubetzky also made an offer of $100,000 but requested a larger equity stake of 30%, provided that Manuel Rojas commits to working full-time on the business.
After considering the offers, Manuel and Grace decided to accept Lori Greiner and Mark Cuban’s offer of $100,000 for 25%. They believed that this deal provided the financial support they needed while allowing Manuel to retain his current job, providing some stability during uncertain times. This marked the beginning of a partnership that aimed to take Foam Party Hats to new heights, capitalizing on their creativity and adapting to the evolving market.
