Create a Castle – Sandcastle Kit
DEAL
EPISODE SUMMARY
🕓 Air Date: October 7, 2022
Asking For:
$350,000 for 10%
Investor:
Kendra Scott
Deal:
$350,000 for 20%
PRODUCT SUMMARY
Create A Castle is a revolutionary split-mold sandcastle kit that allows users to easily build intricate sand structures at the beach.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Kevin and Laurie Lane, a couple from New Milford, Connecticut, presented Create A Castle on Shark Tank. They developed this innovative product out of their love for spending time at the beach with their family. They observed that traditional sandcastle-making using fill-and-flip buckets was frustrating and produced unsatisfactory results. To address this issue, they came up with Create A Castle, a unique sandcastle kit featuring split-mold molds that could be stacked and used on the right kind of sand.
Create A Castle’s founders were passionate about their product and believed they had a competitive edge with 12 patents worldwide, offering broad coverage for their unique design. They emphasized the versatility of their product, as it could be used year-round, even in snowy conditions.
The Product
Create A Castle is an innovative sandcastle-making kit designed to transform your beach experience. Unlike traditional fill-and-flip sand buckets, Create A Castle features split-mold molds that can be easily stacked and used with the right type of sand, allowing users to construct elaborate sand structures quickly and effortlessly.
The kit includes a 10-inch cylinder for the base, a corbel for added intricacy, a stackable 6-inch piece for extra height, a ridge battlement brick form for tower detailing, and a window cutter for creating elegant windows.
Using Create A Castle is as simple as buckling the molds together, packing them with sand, and then unbuckling them to reveal your masterpiece.
How It Went
The company’s position before Shark Tank
Create A Castle demonstrated significant growth, with sales increasing from $600,000 in the previous year to a projected $3 million in the current year. They achieved this by securing partnerships with major retailers like Costco Canada and Sam’s Club, expanding their distribution channels significantly. However, despite the impressive sales figures, their profit margins were relatively low, primarily due to unexpected shipping cost increases, resulting in negative earnings.
The company had primarily relied on revenue generated from sales and partnerships to fund its operations. With Kendra Scott’s investment of $350,000 for 20% equity, they aimed to use the capital to invest in more product development and reduce costs. Additionally, they were looking for expertise and guidance to overcome past mistakes and scale their business effectively.
The product had both retail and wholesale channels, with Kendra Scott proposing a strategy to balance between them. This approach aimed to ensure that the company maximizes its revenue while carefully managing the challenges presented by discount retailers and returns. Create A Castle was structured as a family-owned business led by founders Kevin and Laurie Lane, who were seeking guidance and financial support to take their product to the next level.
The Negotiations:
During the Shark Tank pitch, Create A Castle received offers from Kendra Scott and Daymond John. Kendra Scott initially offered $350,000 for 25% equity in the company. Daymond John expressed concern about the emphasis on sales over profits and suggested focusing on building margins instead. He ultimately decided to pass on the opportunity.
Kevin O’Leary had reservations about the company’s business model and advised dropping the low-end product line, raising prices by 30%, and selling exclusively on their own website. He also opted not to invest. Lori Greiner appreciated the product but chose not to invest, stating that she prefers products accessible to the masses but doesn’t invest in everything she likes.
Kevin Lane and Laurie Lane ultimately accepted Kendra Scott’s offer of $350,000 for 20% equity, as they believed she was the right fit for their brand and offered valuable expertise in expanding the business. Kendra Scott’s emphasis on omni-channel retailing aligned with their goals, and they felt she would help them achieve their vision for Create A Castle.
