Jackson’s Honest
DEAL
EPISODE SUMMARY
🕓 Air Date: October 1, 2017
Asking For:
$1,250,000 for 5%
Investor:
Rohan Oza
Deal:
$1,250,000 for 15%
PRODUCT SUMMARY
Jackson's Honest produces potato and tortilla chips cooked in 100% organic coconut oil, aiming to disrupt the snack-food industry with a focus on health benefits.
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Background Story
The founders, Megan and Scott, were inspired by their son Jackson, who developed a rare autoimmune disease called Aicardi-Goutieres Syndrome. Through trial and error, they discovered that a low-carb, high-fat diet with coconut oil significantly improved Jackson’s health. This realization led them to create Jackson’s Honest, a company with a mission to reintroduce healthy fats to the snack aisle.
The Product
Jackson’s Honest chips are made with 100% organic coconut oil, known for its health benefits. The chips are easy to digest, stable when heated, and have a unique flavor.
The founders initially made these chips at home, receiving positive feedback from friends and family, motivating them to start the company. The product is positioned as a healthier alternative in the $20 billion snack food industry.
How It Went
The company’s position before Shark Tank
The company is valued at $25 million with sales of $10.1 million in the previous year and a projection of $13-14 million for the current year. While not yet profitable, the founders attribute losses to the expensive nature of the food industry and rapid growth, with slotting fees accounting for 18.4% of costs. Whole Foods is a significant customer, contributing around 13% to the annual revenue. The founders have raised $3 million in equity from friends and family, retaining two-thirds ownership.
The Negotiations:
The Sharks were impressed by the product and the founders’ story but raised concerns about the high valuation. The initial ask was $1.25 million for 5%, which Rohan Oza found too low. He made a counteroffer of $1.25 million for 20%, emphasizing his value in growing the business. The founders countered with $1.25 million for 7.5%, and Rohan settled on $1.25 million for 15%, which they accepted.
Other Sharks bowed out, expressing concerns about the grocery industry’s challenges and the high valuation. In the end, the negotiation with Rohan Oza resulted in a deal that increased the chances of Jackson’s Honest becoming a national brand. The founders were emotional, seeing this as a significant step toward realizing their mission and expanding their impact.
