Monti Kids Montessori Toys
DEAL
EPISODE SUMMARY
🕓 Air Date: January 27, 2019
Asking For:
$200,000 for 2,50%
Investor:
Kevin O'Leary
Deal:
$200,000 for 10%
PRODUCT SUMMARY
Monti Kids is a comprehensive Montessori-based learning program for children from birth to age 3. It provides a subscription service delivering Montessori toys tailored to a child's stage of development every three months.
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Background Story
Monti Kids, based in Oakland, California, is the brainchild of Zahra, a highly educated and passionate individual with a background in psychology and education. Zahra’s journey began at Harvard, where she studied psychology and graduated at the top of her class with summa cum laude honors. Furthering her education, she earned a master’s degree from the prestigious Harvard Graduate School of Education. Zahra’s career took a unique turn when she became a Montessori-trained teacher, gaining international certification for working with children from birth to age 6. Her expertise led her to work in a Montessori preschool, an experience she cherished. However, her perspective shifted when she became a mother.
The turning point for Monti Kids came when Zahra recognized the lack of accessible Montessori programs tailored specifically for children aged 0 to 3. Most traditional Montessori schools around the world typically begin at age 3 and above. Leveraging her deep understanding of child development and education, Zahra decided to bridge this gap by creating Monti Kids, an innovative and comprehensive learning program for infants and toddlers.
Her motivation stemmed from the understanding that the first three years of a child’s life are crucial for brain development, yet formal education often starts after this critical period. Monti Kids emerged as a solution to empower parents during these early years, providing them with a convenient and effective Montessori-based educational program that fosters their child’s development at home. Zahra’s personal and professional experiences converged, leading to the creation of Monti Kids, a venture that aims to give children the best start in their educational journey.
The Product
Monti Kids is a revolutionary learning program designed to cater to the developmental needs of children from birth to age 3. Grounded in the Montessori Method, the program offers a subscription service that delivers a carefully curated set of Montessori toys directly to the subscriber’s doorstep every three months.
The program consists of eight levels, each lasting two to three months, and is adaptable for children at various stages of development. The curated toys are specifically designed to enhance essential skills, with a focus on the Montessori principles of hands-on learning and sensory exploration. To complement the physical toys, Monti Kids provides weekly emails containing instructional videos for parents. These videos guide parents on how to introduce the toys effectively, promoting interactive and educational play.
Monti Kids’ pricing structure includes a cost of $297 for each level, encompassing both the physical toys and the valuable content provided to parents. The subscription model allows families to engage with the program from pregnancy up to the child’s third birthday. Importantly, Monti Kids emphasizes that it is not merely a toy subscription but a comprehensive educational program, laying the foundation for a child’s learning journey right from birth.
How It Went
The company’s position before Shark Tank
Monti Kids has demonstrated robust performance and growth since its inception. Over the course of 14 months, the company has achieved sales totaling $550,000, with a notable 20% month-over-month growth rate since its launch. The impressive sales figures underscore the strong market demand for early childhood learning resources, validating Monti Kids’ mission to fill a critical gap in the educational landscape. The company’s funding history reflects its strategic approach to securing capital for expansion. To date, Monti Kids has successfully raised $2.8 million, indicating investor confidence in its vision and potential. The funding has allowed the company to invest in various aspects of its business, including product development, marketing, and team expansion.
Monti Kids’ customer base is diverse and extends globally. The program has garnered interest from parents worldwide, with customers purchasing Montessori-based learning kits for their children. The broad appeal suggests that Monti Kids is addressing a universal need for quality early childhood education resources. As for the company’s financial health, Monti Kids has a current capital of $200,000 in the bank, supplemented by additional commitments from investors. The monthly burn rate is $95,000, a figure that reflects the company’s investment in growth initiatives such as team expansion and marketing efforts. The decision to raise $200,000 during the pitch suggests a strategic move to secure additional capital for further expansion.
Monti Kids’ current structure involves a team of six individuals, indicating a dedicated workforce driving the company’s operations. The focus on hiring for school partnerships and mom ambassador marketing signals a commitment to expanding market reach and establishing collaborations within the educational community. Overall, Monti Kids appears to be in a healthy position, backed by a solid financial foundation and a clear growth trajectory.
The Negotiations:
The negotiations for Monti Kids unfolded as the sharks delved into discussions regarding the company’s valuation, financials, and the founder’s decision-making. Zahra initially sought $200,000 for a 2.5% equity stake, a figure that raised eyebrows among the sharks. Kevin O’Leary emerged as the first to make an offer, proposing $200,000 for a more substantial 10% equity stake, coupled with a unique royalty structure. Robert Herjavec, while expressing concern about Monti Kids’ significant spending and burn rate, also extended an offer of $200,000 for a 10% equity share along with 5% in advisor’s shares.
This brought the negotiation to a pivotal moment when Kevin O’Leary, with his characteristic pragmatic approach, insisted on his royalty-based deal, emphasizing the need for discipline in the company’s financial management. As the negotiation unfolded, Mark Cuban and Lori Greiner opted out, citing reservations about the company’s valuation and the founder’s decision-making. Zahra then attempted to renegotiate with Robert, proposing a 5% equity stake along with 5% advisor’s shares, but Robert declined, highlighting the importance of discipline in financial decision-making.
In a surprising turn, Kevin O’Leary, despite his earlier insistence on the royalty structure, made a compelling offer of $200,000 for a 10% equity stake without the previously proposed royalties. This offer was accepted by Zahra, marking the successful conclusion of the negotiation. The sharks’ concerns about Monti Kids’ financials and valuation ultimately shaped the negotiation, leading to a deal that addressed both the founder’s funding needs and the sharks’ expectations for financial discipline in the company’s future.
