FinalStraw Collapsable Drinking Straw
NO DEAL
EPISODE SUMMARY
🕓 Air Date: October 7, 2018
Asking For:
$625,000 for 5%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
FinalStraw is the world's first reusable, collapsible straw, designed to combat the environmental impact of single-use plastic straws.
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Background Story
Emma and Miles, the founders of FinalStraw, embarked on their journey to address the environmental issue of plastic straws with a shared passion for sustainability. Emma, having recently completed her master’s degree in environmental management and sustainability at Harvard, brought a wealth of knowledge and commitment to the cause. Her professional background included work at Los Alamos National Laboratory, specifically in waste minimization.
This experience equipped her with insights into the environmental impact of disposable items, motivating her to make a tangible difference. Miles, on the other hand, was drawn into the project through a mutual friend who recognized Emma’s dedication to eliminating plastic straws. Intrigued, he reached out to Emma and discovered her TEDx talk on the subject. This initial connection laid the foundation for their collaboration. Miles contributed his skills to the development of the straw, emphasizing a collaborative effort between them.
The spark for FinalStraw ignited when they observed the alarming rate at which plastic straws were polluting oceans and harming marine life. Motivated by the growing anti-plastic-straw movement, Emma and Miles felt compelled to devise a better alternative. The result was FinalStraw, the world’s first reusable, collapsible straw.
The Product
FinalStraw is an innovative solution to combat the environmental impact of single-use plastic straws. This reusable, collapsible straw is designed with practicality and sustainability in mind. The straw can be easily folded into a compact size and stored in a case resembling a car key. This portability makes it convenient for users to carry on keychains or in pockets, promoting the adoption of eco-friendly practices on the go.
Available in various colors such as Healthy Coral, Shark-Butt Gray, Arctic-melt Blue, and Suck-ulent Green, FinalStraw offers a personalized touch to its users. The product addresses the pressing issue of plastic pollution, especially in oceans, by providing an alternative to traditional plastic straws.
Priced at $20, FinalStraw positions itself as a premium, sustainable choice. The founders justify the cost by emphasizing the importance of investing in eco-friendly alternatives. The success of their Kickstarter campaign, raising $1.89 million in 30 days, and subsequent daily sales of $15,000 showcase early market acceptance.
Customers can purchase FinalStraw through the Kickstarter campaign, pre-sales on the company’s website, or potentially through other retail channels. The product not only provides a practical and stylish alternative to plastic straws but also aligns with the growing global movement against single-use plastics.
How It Went
The company’s position before Shark Tank
FinalStraw, headquartered in Seattle, WA, is positioned in the nascent stages of its business journey. The company made its debut just two months before the “Shark Tank” pitch, successfully raising an impressive $1.89 million through a Kickstarter campaign. This substantial funding reflects a robust and positive initial response from the market, indicating a considerable level of interest and support for the innovative product.
In addition to the Kickstarter success, FinalStraw attracted further attention by generating $15,000 in daily sales from pre-orders on their website. This consistent daily revenue underscores a sustained demand for the product, demonstrating an early market acceptance.
The Negotiations:
During the “Shark Tank” negotiations, Emma and Miles, the founders of FinalStraw, delivered a compelling pitch for their reusable, collapsible straw, aiming to secure $625,000 in exchange for a 5% equity stake in their company. The Sharks swiftly raised concerns about the perceived high cost of $20 per straw and questioned the founders’ ability to successfully penetrate the market. Kevin O’Leary took the initiative with the first offer, suggesting $625,000 for a 10% stake in the company, coupled with a royalty of $2 per straw until he recovered $1.8 million.
Seeking a committed partner, the founders expressed openness to higher percentage offers. However, both Lori Greiner and Jamie Siminoff opted out early, citing reservations regarding the product’s price point and market potential. Mark Cuban, while acknowledging the mission behind FinalStraw, voiced apprehensions about the product’s scalability and the challenge of altering consumer behavior. He proposed $625,000 for a 25% stake, prompting a counteroffer from the founders for a 12.5% stake, which Mark declined.
In an unexpected twist, Emma and Miles turned down Kevin’s initial offer, aiming for more favorable percentages. Kevin subsequently withdrew his offer, leaving the founders with only one standing proposal from Mark. Ultimately, Emma and Miles declined Mark’s offer of $625,000 for a 25% stake, emphasizing their appreciation for Mark’s experience and commitment. The negotiation shed light on the hurdles FinalStraw faced in convincing the Sharks of its market potential and the delicate balance between valuation and securing a dedicated partner for the company’s future growth.
