Lollacup Sippy Cups
DEAL
EPISODE SUMMARY
🕓 Air Date: April 27, 2012
Asking For:
$100,000 for 15%
Investor:
Mark Cuban, Robert Herjavec (50/50)
Deal:
$100,000 for 40%
PRODUCT SUMMARY
Lollacup is a stylish, American-made toddler straw cup designed to address the challenges of traditional sippy cups with spill-proof valves while prioritizing safety and functionality for children.
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Background Story
Mark and Hanna Lim’s journey as entrepreneurs began with a personal challenge they encountered as parents. Frustrated by the lack of satisfactory options in the market for toddler straw cups, they decided to take matters into their own hands. Drawing from their backgrounds in design and engineering, Mark and Hanna envisioned a product that not only addressed the functional shortcomings of existing cups but also resonated with parents and children alike.
Their decision to manufacture Lollacup in the United States was motivated by their unwavering commitment to safety and quality control. As they navigated the complexities of product development and patenting processes, their shared vision for Lollacup became a driving force behind their entrepreneurial journey.
The Product
Lollacup’s innovative design features a weighted straw that moves with the liquid, ensuring that children can drink easily without encountering the frustration of a straw that won’t reach the bottom of the cup. The detachable handles provide versatility for parents, allowing for easy transport and storage.
Made with safe materials in the USA, Lollacup prioritizes child safety and comfort. It retails for $18, and wholesales at $9, with manufacturing costs at $4.50 per unit. The product’s ease of cleaning and appealing design make it a standout choice for parents seeking a reliable alternative to traditional sippy cups.
How It Went
The company’s position before Shark Tank
Lollacup has demonstrated strong initial sales, with $30,000 in revenue generated within four months of launching. With an additional $5,000 in orders and a $30,000 soft order for the upcoming holiday season, the company is poised for growth. Mark and Hanna have secured a partnership with a sales representative to cover the entire United States, enabling them to expand their market reach.
Despite challenges such as exclusivity agreements and limited resources, Lollacup has garnered interest from prominent retailers, reflecting the potential for further expansion. The company operates from Mark and Hanna’s garage, where they manage shipping and assembly, underscoring their hands-on approach to business operations. Additionally, Lollacup has invested $100,000 in product development, including securing a design patent, highlighting their commitment to innovation and intellectual property protection.
The Negotiations:
Throughout the negotiation process, Mark and Hanna carefully considered offers from the sharks, weighing the potential benefits and drawbacks of each proposal. While initially intrigued by Kevin O’Leary’s offer, concerns about offshore manufacturing and compromising their “Made in America” principle led them to decline. Ultimately, they accepted a deal with Mark Cuban and Robert Herjavec, who offered $100,000 for a 40% equity stake.
Despite some hesitation during negotiations, Mark and Hanna recognized the value of aligning with experienced investors who shared their vision for the company’s growth and expansion. By securing a partnership with Lori and Robert, Lollacup is well-positioned to capitalize on opportunities for further market penetration and brand development.
