Truffle Shuffle
DEAL
EPISODE SUMMARY
🕓 Air Date: April 16, 2021
Asking For:
$500,000 for 5%
Investor:
Mark Cuban
Deal:
$501,000 for 18%
PRODUCT SUMMARY
Truffle Shuffle offers live virtual cooking experiences and truffle-based products to help people enjoy the luxury of truffles at home.
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Background Story
Jason and Tyler, both chefs, met while working at the three-Michelin-star restaurant French Laundry. They decided to start Truffle Shuffle to source and sell honest truffles, as they discovered the challenges of obtaining genuine truffles. The COVID-19 pandemic forced them to pivot, selling fresh truffles directly to consumers through live cooking experiences, sending ingredients and recipes to recreate Michelin-quality dishes at home.
The Product
Truffle Shuffle offers virtual cooking classes where participants receive ingredients and join live-streamed classes led by professional chefs, enabling them to create gourmet meals at home. They also sell truffle-based products like truffle salt, honey, and popcorn.
The truffle products are available through various retailers, including Whole Foods. Prices for the cooking classes range from $95 to $125 per kit, and the truffle salt is sold for $20 a jar.
The products are known for their exceptional quality and flavor, with the truffle salt, for example, being a combination of handcrafted sea salt and truffle powder.
How It Went
The company’s position before Shark Tank
Truffle Shuffle has experienced rapid growth, with $1.4 million in sales year to date, primarily from their cooking-class experiences. They have also ventured into the retail market, partnering with Whole Foods to sell their truffle-based products. Their profit margins have improved, with a gross profit margin of 60%.
However, their net profit was $8,000, indicating the need for better profitability. The company has $165,000 in cash and has been self-funded, using profits to support growth. The business is currently valued at $10 million. Their pivot to virtual experiences during the pandemic has been successful, showcasing their adaptability.
The Negotiations:
Jason and Tyler entered the Shark Tank seeking $500,000 for 5% of their business, valuing it at $10 million. Robert Herjavec offered $500,000 for 20% equity. However, Kevin O’Leary also showed interest and proposed $500,000 as debt at 9.5% interest for three years with 25% equity, but the entrepreneurs declined.
Later, they decided to give Mark Cuban and Robert Herjavec the opportunity to make individual offers. Mark offered $501,000 for 18%, which they accepted, leading to a partnership between the entrepreneurs and Mark Cuban.
