G.O.A.T. Pet Products
DEAL
EPISODE SUMMARY
🕓 Air Date: January 14, 2018
Asking For:
$499,000 for 9%
Investor:
Robert Herjavec
Deal:
$499,000 for 33%
PRODUCT SUMMARY
G.O.A.T. Pet Products offers a unique Pet Speaker and app combo that not only gives pets a voice but also allows users to interact with their pets in novel ways, stream music, and capture selfies.
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Background Story
Princess Michelle Winowich, the founder of G.O.A.T. Pet Products, hails from Bloomfield Hills, Michigan. With a background in the pet industry, Michelle had a lucrative job but decided to pursue her passion for creating innovative products for pets. Inspired by the dream of giving pets a voice, she developed the G.O.A.T. Pet Speaker.
Michelle’s journey took a significant turn when she presented her product at the Global Pet Expo, securing orders and gaining attention from major retailers like PetSmart. Despite facing challenges, including giving exclusivity to PetSmart, she managed to secure over $2 million in sales within six months. Michelle’s commitment to her product led her to the Shark Tank seeking a partner to propel her company to greater heights.
The Product
The G.O.A.T. Pet Speaker is a device that gives pets a voice through a dedicated app. Not only does it allow users to customize what their pets “say,” but it also functions as a portable speaker for music during walks.
The speaker includes features like streaming calming music to alleviate pet anxiety and a built-in selfie remote for capturing moments with pets. Priced at $24.99, the product boasts a high profit margin of 89%. It initially gained traction through a significant order from PetSmart, positioning G.O.A.T. Pet Products as a promising player in the pet industry.
How It Went
The company’s position before Shark Tank
G.O.A.T. Pet Products had impressive sales, exceeding $2 million within six months. PetSmart, a major partner, placed a substantial order of over $2 million, providing a significant boost. Michelle had invested $260,000 from a silent partner, who took a 50% equity stake. The negotiation with PetSmart involved granting exclusivity for six months and a no-return policy, demonstrating a calculated approach to market penetration. Michelle’s experience in the pet industry and the initial success of the product positioned the company as a potential industry leader.
The Negotiations:
The Sharks were initially skeptical but intrigued by the product’s potential. Michelle faced scrutiny for her $5 million valuation, but the revelation of $2 million in sales within six months impressed the Sharks. Despite a lack of data on the product’s sustained success, Robert Herjavec made an aggressive offer of $499,000 for a 33% equity stake.
Michelle, despite attempting to negotiate for a lower equity percentage, ultimately accepted Robert’s offer, securing a partnership with a Shark known for his success in the industry. The negotiation highlighted the challenges of valuing a product without established long-term performance metrics.
