Digiwrap Custom Wrapping Paper
DEAL
EPISODE SUMMARY
🕓 Air Date: December 9, 2016
Asking For:
$150,000 for 10%
Investor:
Kevin O'Leary
Deal:
$150,000 for 20%
PRODUCT SUMMARY
Digiwrap transforms gift packaging by offering customizable gift bags and tissue paper through digital processes, providing a unique and personalized touch to gift-giving.
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Background Story
Digiwrap, Inc., the brainchild of founders Brad Bosvovic and Charlie Williams, emerged from a shared vision to infuse a digital, personalized touch into the age-old tradition of gift-giving. Located in Elmhurst Illinois, the founders’ journey began with a keen observation of a void in the market: the lack of personalized options in gift packaging. Brad Bosvovic and Charlie Williams, both driven by an entrepreneurial spirit, brought complementary skills to the table. Brad’s expertise likely lies in areas such as product development or marketing, given his role in presenting the pitch on the show. On the other hand, Charlie may possess a background in technology or operations, as the pitch highlighted their unique digital processes.
The genesis of Digiwrap can be traced back to the founders’ realization that, in a world embracing digital personalization in almost every aspect, gift packaging remained largely traditional and uninspired. They envisioned a company that could leverage cutting-edge printing technology to create customized gift bags and tissue paper. This vision led to the birth of Digiwrap, a company aiming to revolutionize the gift packaging industry by bringing digital innovation to an otherwise analog tradition.
The founders’ journey reflects a commitment to addressing a market need with a unique solution. Their shared passion for combining technology with the personal touch of gift-giving has propelled Digiwrap to success, evident in their sales growth and partnerships. As the company continues to carve its niche in the market, Bosvovic and Williams remain at the forefront of a venture that redefines the art of presenting gifts in the digital age.
The Product
Digiwrap’s flagship product is a revolutionary take on traditional gift packaging, offering customizable gift bags and tissue paper through innovative digital processes. The product’s standout feature lies in its ability to transform mundane gift packaging into personalized, unique expressions of thoughtfulness.
The customization process is user-friendly and allows customers to upload their chosen designs or images for printing on both tissue paper and gift bags. Digiwrap’s digital technology enables the creation of one-of-a-kind, on-demand products, setting it apart from competitors with longer production times.
The benefits of Digiwrap’s product are twofold. Firstly, it addresses the consumer demand for personalized and meaningful gift presentation, providing a solution for individuals who seek to add a distinctive touch to their gifts. Secondly, the product caters to corporate clients, offering a unique platform for creating custom-branded gift packaging for events, corporate gifts, or promotional purposes.
Digiwrap’s product can be purchased through its online platform, where customers can easily navigate the design and ordering process. The pricing structure is competitive, with average costs of around $1 for a sheet of tissue paper and a retail price of up to $10 for a custom gift bag.
The company’s ability to produce these personalized items on-demand and in small quantities sets it apart in the market, providing a convenient and accessible solution for those seeking a personalized touch in their gift-giving experiences.
How It Went
The company’s position before Shark Tank
Digiwrap, Inc. has demonstrated robust performance since its inception, positioning itself as a unique player in the market for personalized gift packaging. The company’s health and position are marked by impressive sales growth, achieving $350,000 in its first year and projecting $500,000 in the second year. This upward trajectory signifies a positive market reception and indicates a healthy demand for Digiwrap’s innovative offerings. The company has strategically formed partnerships to enhance its reach and offerings. One notable collaboration is with Zazzle, a large online personalized retailer, where Digiwrap sells its products wholesale. This partnership not only expands Digiwrap’s distribution channels but also aligns it with a reputable player in the personalized product market.
Digiwrap’s customer base comprises both individual consumers and corporate clients seeking personalized gift packaging solutions. The product’s appeal extends to those who value the art of gift-giving and desire a unique touch in their presentations. Additionally, the company has tapped into the corporate sector by offering custom-branded packaging for events and promotional purposes, leveraging its unique digital printing capabilities. In terms of funding, Digiwrap has secured financial support through a combination of angel investors and revenue generated from product sales. This diversified funding approach reflects a strategic balance between external investment and self-sustainability.
The company’s profits and losses indicate a positive trajectory, with steady revenue growth contributing to a sound financial position. Digiwrap’s available capital is primarily directed towards research and development, ensuring the continuous enhancement of its digital processes and expanding its product line. The company’s structure appears to be adaptable, with a focus on both direct-to-consumer sales through its online platform and wholesale partnerships with key retailers like Zazzle. This dual approach enables Digiwrap to capture a broad market segment and diversify its revenue streams, contributing to its overall resilience and success in the competitive landscape of personalized gift packaging.
The Negotiations:
The negotiations in the Shark Tank for Digiwrap, Inc. unfolded with a mix of skepticism and interest from the Sharks. Initially seeking $150,000 for 10% equity, the founders, Brad Bosvovic and Charlie Williams, faced scrutiny regarding the scalability of their business. Several Sharks expressed concerns about the niche nature of the product and the challenges associated with building a substantial customer base. The first offer came from Kevin O’Leary, who proposed $150,000 for a 20% equity stake along with a royalty deal: a nickel for every sheet of tissue paper and 40 cents for every bag until he recouped $450,000.
After deliberation, the founders accepted O’Leary’s offer, securing him as a partner in the “tissue business.” However, the negotiation took an unexpected turn when Lori Greiner, known for her expertise in retail and consumer products, made a surprise offer of $150,000 for a 50% equity stake. The founders deemed this offer steep, leading to a brief rejection. Mark Cuban and Robert Herjavec expressed concerns about the potential return on investment, given the niche market.
In a twist, O’Leary modified his offer, proposing $150,000 for 20% equity, a nickel on every tissue, and a dime on every bag in perpetuity, with the royalty deal expiring once he recouped his investment. This offer aimed to address the concerns raised during the negotiation. Ultimately, the founders accepted O’Leary’s revised offer, securing $150,000 for a 20% equity stake with a royalty agreement in place. The negotiation showcased the delicate balance between investor expectations and the founders’ vision, resulting in a deal that satisfied both parties and positioned Digiwrap for growth in the personalized gift packaging market
