Sun-Stache Novelty Sunglasses
DEAL
EPISODE SUMMARY
🕓 Air Date: October 17, 2014
Asking For:
$300,000 for 5%
Investor:
Daymond John
Deal:
$300,000 for 20%
PRODUCT SUMMARY
Sun-Staches, a line of themed party shades for various occasions.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
H2W, the inventive minds behind Sun-Staches, made a spirited entrance onto the Shark Tank stage from Simi Valley, California. The trio, consisting of Dan, Dave, and Eric, brought a fresh perspective to the traditional party accessory scene. Drawing from their collective experience in an undisclosed industry, these founders not only identified a gap in the market but also possessed the skills to fill it with an imaginative solution.
The journey of Sun-Staches began as a response to the evolving landscape of social gatherings. Observing the outdated nature of conventional party gear, Dan, Dave, and Eric set out on a mission to infuse vibrancy and humor into these occasions. Their undisclosed background in a specific industry equipped them with the expertise to not only pinpoint this gap but also bridge it with a product that adds a playful and memorable element to any celebration.
As the founders showcased their themed Sun-Staches during the pitch, the energy and enthusiasm they exuded mirrored the essence of their brand – a celebration of joy and originality. The undisclosed industry experience of Dan, Dave, and Eric laid the foundation for Sun-Staches, transforming the mundane into extraordinary, and making parties more vibrant and entertaining.
The Product
Sun-Staches, the brainchild of H2W, transcends conventional eyewear, evolving into a transformative form of facewear designed to elevate any occasion. These whimsical party shades stand out with their themed styles, bringing an element of fun and entertainment to events ranging from Fourth of July celebrations to Hanukkah, sporting events, and even kids’ birthday parties.
Designed not just as eyewear but as facewear, Sun-Staches offer a unique way for individuals to express their creativity and bring humor to any social gathering. With styles ranging from cowboy hats to black cat masks and football helmets, the product extends beyond its practical use, becoming an integral part of the party experience.
Priced between $7.99 and $12.99, Sun-Staches are accessible through major retailers such as Party City and Toys “R” Us, making them readily available for partygoers seeking an extra layer of amusement. The cost-effective range of 75 cents to $1.50 per product highlights a strategic balance between affordability and quality, ensuring a broad appeal.
With the ability to transform an ordinary event into a memorable and lively affair, Sun-Staches redefine party accessories, offering a delightful way for individuals to showcase their personality and add a touch of humor to various celebrations.
How It Went
The company’s position before Shark Tank
H2W’s performance in the market has been nothing short of impressive. The company, creators of Sun-Staches, reported robust financial health and a strong market position during their Shark Tank pitch. In the past year, H2W achieved an outstanding $5.7 million in sales, with $2.8 million attributed to their flagship product, Sun-Staches. This remarkable success was underlined by partnerships with major retailers, including Party City and Toys “R” Us. Their distribution strategy primarily focuses on specialty retail, and their product range, priced between $7.99 and $12.99, boasts a solid profit margin.
The cost per product ranges from 75 cents to $1.50, showcasing an effective balance between cost efficiency and retail pricing. Sun-Staches has successfully positioned itself in the market, serving a diverse customer base seeking unique and entertaining party accessories. Partnerships with renowned retailers further amplify their market reach. During the pitch, H2W hinted at potential expansion through licensing agreements, showcasing a forward-thinking strategy to broaden their product line and increase market share.
The company’s founders expressed interest in licensing deals with major entities like Marvel and DC, suggesting a vision for sustained growth. While the exact funding details were not disclosed, H2W’s financial stability is evident, with profits expected to reach $750,000 this year. Their structured approach to business, coupled with sound financials, positions H2W as a promising player in the party accessory industry, ready to capitalize on future opportunities.
The Negotiations:
The negotiations for H2W’s Sun-Staches on Shark Tank unfolded as a rollercoaster of valuations, counteroffers, and strategic considerations. The founders entered seeking $300,000 for a 5% equity stake, implying a $6 million valuation. Kevin O’Leary made the first offer, proposing $300,000 for 5%, valuing the company at $6 million. This triggered skepticism among the Sharks, with suggestions that the true value might be closer to $2.5 million. Daymond John seized the opportunity, presenting an offer of $300,000 for a substantial 25% equity stake.
The negotiation landscape shifted, as Daymond emphasized his ability to secure licensing deals at reduced costs, adding unique value to the partnership. Mark Cuban dropped out early, unimpressed with the product despite acknowledging the founders’ operational excellence. Amidst counteroffers and discussions, Daymond adjusted his proposal to $300,000 for a 15% stake, indicating flexibility. However, the founders sought further negotiation, prompting Daymond to present a final offer of $300,000 for a 20% equity stake.
With a valuation of $1.5 million, this deal was accepted by H2W, marking the culmination of intense negotiations. The negotiation process showcased the founders’ willingness to adapt their terms and the Sharks’ strategic considerations. Daymond John emerged as the chosen partner, bringing both investment and valuable connections to help H2W secure lucrative licensing deals and propel Sun-Staches to new heights in the party accessory market.
