Cave Shake Paleo Diet Shakes
DEAL
EPISODE SUMMARY
🕓 Air Date: October 28, 2018
Asking For:
$250,000 for 10%
Investor:
Charles Barkley
Deal:
$250,000 for 20%
PRODUCT SUMMARY
Cave Shake is a dairy-free, gluten-free, low-carb beverage designed as a dessert, snack, or meal replacement for those following a keto or low-carb diet.
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Background Story
Billie and Holly, the dynamic duo behind Cave Shake, hail from Southern California, infusing their entrepreneurial spirit with the health-conscious lifestyle prevalent in the region. Billie and Holly presented their keto-friendly shakes on “Shark Tank” as a solution born out of personal experiences and a commitment to wellness.
Holly, with a background in engaging in intense sports, particularly ski racing, faced the aftermath of injuries that sparked her journey into the world of keto diets. Her personal struggles, exacerbated by a severe car accident at the age of 17, led her to explore dietary approaches to mitigate inflammation and promote overall well-being. It was during this transformative period that she encountered the benefits of a keto diet, which became a cornerstone of her lifestyle.
Billie, recognizing the positive impact of the keto diet on Holly’s life, was inspired to join forces and create a product that could make the keto lifestyle more accessible and enjoyable for a broader audience. Together, they founded Cave Shake, a brand committed to providing a delicious and convenient solution for individuals navigating the challenges of reducing sugar, carbs, and gluten from their diets.
The Product
Cave Shake, the brainchild of Billie and Holly, is a revolutionary beverage designed to cater to the needs of individuals adhering to keto and low-carb diets. Positioned as a dessert, snack, or meal replacement, Cave Shakes offer a guilt-free indulgence for those aiming to cut sugar, carbs, and gluten from their diets.
Sweetened with stevia and priced at $7.99 per bottle, Cave Shakes come in various flavors, providing a satisfying and enjoyable experience without compromising dietary goals. The product is ready-to-drink, making it convenient for consumers on the go. Each bottle, containing 480 calories, is loaded with plant-based fats, specifically targeted for those following high-fat, low-carb diets like keto.
Cave Shakes boast versatility, catering to pre- and post-workout needs, serving as a delightful dessert, or functioning as a quick and nutritious meal replacement. The product’s nutritional value aligns with keto principles, utilizing MCTs (medium-chain triglycerides) for efficient fat burning. Currently available in Southern California, primarily in health food stores, Cave Shake aims to provide a tasty and convenient option for individuals committed to a healthier lifestyle, offering an alternative to traditional high-sugar and high-carb treats.
How It Went
The company’s position before Shark Tank
As of the “Shark Tank” pitch, Cave Shake demonstrated commendable growth and a solid position within the health and wellness market. In 2017, the company reported net sales of $270,000, and in the current year, they had already achieved $182,000 in sales, reflecting a positive trajectory. A significant aspect of Cave Shake’s strategy is its strategic partnership with L.A. Libations, an incubator affiliated with Coca-Cola. This partnership, though taking 15% equity, provided Cave Shake with valuable support and resources. Notably, the company recently secured a partnership with the official incubator for the largest beverage company in the world, Coca-Cola, through L.A. Libations.
Cave Shake’s distribution primarily focuses on Southern California, with a presence in health food stores. The targeted market includes individuals following keto and low-carb diets, health-conscious consumers, and those seeking alternatives to high-sugar and high-carb treats. Funding for Cave Shake comes from multiple sources. The founders sought additional investment on “Shark Tank,” resulting in a deal with Charles Barkley, who offered $250,000 for a 20% stake in the company. This injection of capital from the Sharks, combined with their existing partnership with L.A. Libations, positions Cave Shake for further expansion.
The company’s revenue growth, strategic partnerships, and successful negotiations on “Shark Tank” indicate a positive financial outlook. The available capital from the recent deal with Charles Barkley will likely contribute to marketing, production, and distribution efforts, enhancing Cave Shake’s position in the competitive health and wellness beverage market. The company’s current structure involves partnerships with both L.A. Libations and Charles Barkley, providing expertise, funding, and strategic support for Cave Shake’s continued success.
The Negotiations:
The negotiation process for Cave Shake on “Shark Tank” was dynamic, filled with enthusiasm and strategic considerations from both the founders and the Sharks. The initial pitch, seeking $250,000 for a 10% equity stake, garnered interest from all the Sharks. The negotiation took an unexpected turn when Charles Barkley, a guest Shark, made a bold offer. He proposed investing $250,000 for a higher equity stake of 20%. Despite the increased equity ask, Charles Barkley’s offer was accepted by Billie and Holly, marking a significant partnership.
This decision was influenced by Barkley’s personal connection to the product, stemming from his own struggles with weight loss after retirement and a genuine desire to be involved in a business promoting health and wellness. However, the negotiation process also brought to light concerns regarding Cave Shake’s existing deal with the incubator, L.A. Libations. Kevin O’Leary raised questions about potential royalties or commissions owed to the incubator based on sales. The founders clarified that the incubator deal involved deferred commission on sales above $10,000, and they had not yet paid any commissions.
Throughout the negotiation, Lori Greiner and Mark Cuban expressed concerns about the branding and taste preferences. Lori found the branding confusing, and Mark Cuban had reservations about the taste. Ultimately, they decided to bow out of the deal. The negotiation highlighted the importance of understanding existing partnerships and the willingness of the founders to negotiate and adapt. Charles Barkley’s offer, despite a higher equity ask, was deemed fair by the founders, emphasizing the value they placed on Barkley’s involvement and the potential for his expertise to contribute significantly to Cave Shake’s success.
