Animated Lure Motorized Fishing Lure
DEAL
EPISODE SUMMARY
🕓 Air Date: October 30, 2020
Asking For:
$325,000 for 10%
Investor:
Kevin O'Leary
Deal:
$325,000 for 10% + $3 royalty until $1 million is paid back
PRODUCT SUMMARY
Animated Lure is a rechargeable robotic fishing lure that mimics the swim patterns of real fish to attract fish efficiently.
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Background Story
Founders Kanz and Sobhan grew up loving fishing but encountered frustration with traditional fishing methods. They saw the inefficiency and messiness of traditional lures and baits, which led them to create Animated Lure. Their inspiration came from their own experiences fishing with their father until he was diagnosed with a lung disease.
Their parents instilled in them the value of identifying problems and being part of the solution. Originally from Iran, they came to the United States with the goal of contributing to society and taking control of their destiny.
The Product
Animated Lure is a cutting-edge fishing lure that replicates the swimming patterns of real fish. When placed in the water, it autonomously swims, making it incredibly attractive to other fish. The lures come in different sizes, with the Salt Water version offering up to two hours of swim time on a single charge.
Customers can purchase these lures primarily through the company’s website, but they are also available in select retail stores and have a distributor in Canada. The product has garnered attention for its innovative design and effectiveness in attracting fish.
How It Went
The company’s position before Shark Tank
As of their appearance on “Shark Tank,” Animated Lure had generated $247,000 in sales in 2020 and was projecting half a million dollars in sales for the current year, with an expected increase to $675,000 for the following year. The founders had invested $125,000 of their own money into the company and had no debt. They retained equal ownership of the company.
Most of their sales were direct through their website, with some presence in mom-and-pop stores in the United States and Canada through a distributor. The founders were seeking a deal with the Sharks to expand into larger retail outlets and reach a broader customer base.
The Negotiations:
The negotiations started with the founders seeking $325,000 for 10% equity. Kevin O’Leary initially offered exactly what they asked for but wanted a royalty deal. He proposed $3 per unit until he recouped a million dollars, in addition to the 10% equity. The founders countered with 20% equity for half a million dollars and no royalty.
The other Sharks expressed concerns about the valuation, given the founders’ lack of full-time commitment to the business. Eventually, O’Leary made a final offer $325,000 for 10% and a $3 royalty until $1 million has been paid back and the founders accepted, agreeing to O’Leary’s terms. The founders left the Tank with the investment they needed to further grow their innovative fishing lure business.
