DUDE Wipes
DEAL
EPISODE SUMMARY
đź•“ Air Date: October 16, 2015
Asking For:
$300,000 for 10%
Investor:
Mark Cuban
Deal:
$300,000 for 25%
PRODUCT SUMMARY
Dude Wipes are flushable, biodegradable wipes with soothing aloe designed for men but suitable for various uses, providing a more civilized alternative to traditional toilet paper.
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Background Story
The founders, Sean Riley, Ryan Meegan, and Jeff Klimkowski, started Dude Products in Chicago, inspired by the need for a better solution than toilet paper or baby wipes. Living together, they found themselves using baby wipes and decided to create a product tailored for men. The idea took shape, and Dude Wipes was born. The three friends, each with different professional backgrounds (investment banking, manufacturing, and marketing), joined forces to launch their innovative product.
The Product
Dude Wipes are the first wipes specifically designed for men. They are flushable, biodegradable, and infused with soothing aloe. The wipes are not only suitable for the bathroom but can be used on the face, pits, hands, and various other regions to combat stink.
The product is presented as a complement to traditional toilet paper, providing a finishing touch for a cleaner experience. The wipes come in fragrance-free and fresh scents, appealing to a broad audience.
The founders emphasize the versatility of Dude Wipes, catering to blue-collar workers, college students, business professionals, and even moms. They highlight the product’s application beyond the bathroom, making it a multi-purpose solution for cleanliness.
How It Went
The company’s position before Shark Tank
Dude Products had $300,000 in sales year-to-date, with a projected $1.5 million for the current year. The company secured a significant contract with Kroger, a national rollout that would place Dude Wipes in 1,500 to 2,200 stores. With a retail price of $6.49, the wipes yield a 40% margin in stores and a 60% margin online.
The founders expressed confidence in their working capital and outlined plans to use the $300,000 investment to target new big-box retailers, building on the success with Kroger. They disclosed that Sean, one of the founders, was drawing a full-time salary, and their marketing spend ranged from 10% to 15% of sales.
The Negotiations:
The negotiation started with a $300,000 investment of 10%. Lori Greiner and Mark Cuban expressed concerns about the valuation and the fragility of the wipes. Kevin O’Leary and Robert Herjavec, recognizing the potential of the product, made a joint offer of $300,000 for 25% equity. However, the entrepreneurs countered with $300,000 for 20%, splitting the equity between Kevin and Robert.
The sharks did not agree to the counteroffer and insisted on 25%, expressing the value of having two sharks involved. After some back-and-forth, Mark Cuban suddenly jumped back in and agreed to the founders’ counteroffer of $300,000 for 25%, securing the deal. The negotiation highlighted the founders’ ability to navigate the offers and make a strategic decision that aligned with their business goals.
