Daisy Cakes – Mail Order Cake
DEAL
EPISODE SUMMARY
🕓 Air Date: April 22, 2011
Asking For:
$50,000 for 25%
Investor:
Barbara Corcorans
Deal:
$50,000 for 25% equity, and $1 per cake royalty until recouped investment
PRODUCT SUMMARY
Daisy Cakes offers handmade cakes based on family recipes, using fresh, natural ingredients and shipped nationwide.
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Background Story
Kim Nelson, hailing from Spartanburg, South Carolina, is the driving force behind Daisy Cakes. The company’s roots delve deep into her family’s culinary heritage, drawing inspiration from her great aunt Daisy’s and grandmother’s cherished recipes. Kim’s journey into entrepreneurship wasn’t an abrupt shift; rather, it was a natural progression fueled by her passion for baking and a desire to share her family’s delicious creations with the world.
Before venturing into the world of business, Kim’s background included catering and teaching cooking classes, experiences that honed her culinary skills and laid the foundation for Daisy Cakes. However, it was the love and nostalgia associated with her family’s traditional recipes that sparked the idea of turning these homemade delights into a business venture. Operating out of Spartanburg, South Carolina, Kim and her mother, Geraldine, pour their hearts and souls into every cake that emerges from their kitchen.
Their commitment to using only the freshest, most natural ingredients reflects their dedication to quality and authenticity. This devotion, combined with a deep-rooted Southern tradition of hospitality and homemade goodness, forms the backbone of Daisy Cakes. The decision to launch Daisy Cakes was not merely a business endeavor for Kim but a labor of love, driven by a desire to preserve and share her family’s culinary legacy. With a firm belief in the power of homemade goodness to bring joy and comfort to people’s lives, Kim embarked on a mission to spread the sweetness of Daisy Cakes far and wide, one delicious slice at a time.
The Product
Daisy Cakes offers a delectable array of handmade cakes crafted from cherished family recipes passed down through generations. Each cake is meticulously prepared from scratch, using only the finest, freshest ingredients, and without any preservatives or artificial flavors. With flavors like carrot cake, red velvet, and lemon burst, Daisy Cakes caters to a variety of tastes, ensuring there’s something to satisfy every sweet tooth.
Packaged in beautifully designed tins, Daisy Cakes make for the perfect gift or indulgence for any occasion. The cakes are carefully shipped nationwide, arriving frozen and ready to be enjoyed at the recipient’s convenience. Customers can easily purchase Daisy Cakes online through the company’s website, where they can browse the selection, place orders, and even schedule deliveries.
Priced at $44.50 per cake, Daisy Cakes offer a premium dessert experience worth savoring. Each cake is a testament to the love and passion poured into its creation, delivering not only exceptional taste but also a sense of tradition and warmth. Whether for personal enjoyment or as a thoughtful gift, Daisy Cakes promise to delight and impress with their homemade goodness and irresistible flavor profiles.
How It Went
The company’s position before Shark Tank
Daisy Cakes has shown promising performance since its inception, with a strong foundation built on the authenticity and quality of its handmade cakes. The company has successfully tapped into a niche market, attracting customers who appreciate the tradition and homemade goodness associated with Southern-style desserts. With sales exceeding $27,000 in just three months, Daisy Cakes has demonstrated its appeal to a diverse customer base, primarily in the Southern region of the United States.
While Daisy Cakes primarily sells directly to consumers through its website, the company has also attracted interest from potential partners, including discussions with Whole Foods to carry their lemon curd. However, Daisy Cakes faces challenges in scaling production to meet potential demand, highlighting the need for strategic partnerships and investment to expand operations. Currently, the company is self-funded, with Kim Nelson and her family investing $93,000 into the business. However, to fuel growth and address production limitations, Daisy Cakes seeks additional funding from outside investors.
The company’s financial health is stable, with healthy profits generated from sales, but additional capital is required to fund expansion efforts. Daisy Cakes operates with a lean structure, with Kim and her mother, Geraldine, handling all aspects of the business, from baking to customer service. As the company looks to scale, it will need to consider hiring additional staff and implementing operational efficiencies to meet growing demand while maintaining the quality and integrity of its products.
The Negotiations:
During the negotiations, Kim Nelson entered the tank seeking $50,000 in exchange for a 25% equity stake in Daisy Cakes. While the Sharks were impressed by the taste of the cakes and Kim’s passion, they expressed concerns about scalability and the small size of the business. Despite receiving praise, all Sharks except Barbara Corcoran declined to invest, citing the business’s limited scope.
Barbara made a unique offer, proposing $50,000 for 100% equity return until she recoups her investment, with the condition that Kim’s mother, Geraldine, actively participates in selling cakes at trade shows. This offer allowed Barbara to mitigate her risk while providing Kim with the necessary funding to expand her business. Kim accepted Barbara’s offer, recognizing it as an opportunity to grow Daisy Cakes with Barbara’s support.
The negotiations highlighted the importance of strategic partnerships and the challenges faced by small businesses in scaling their operations. Barbara’s offer not only provided financial assistance but also emphasized the value of hands-on involvement and strategic planning in driving business growth. By accepting Barbara’s offer, Kim secured the funding needed to take Daisy Cakes to the next level, while Barbara gained a stake in a promising venture with the potential for substantial returns.
