Mod Mom Furniture
DEAL
EPISODE SUMMARY
🕓 Air Date: April 1, 2011
Asking For:
$90,000 for 25%
Investor:
Robert Herjavec
Deal:
$90,000 for 33% equity and a royalty when sales went above $500,000
PRODUCT SUMMARY
Mod Mom Furniture offers eco-friendly, modern toy boxes designed with puzzle piece lids to entice children to tidy up while fitting seamlessly into contemporary home decor.
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Background Story
Mod Mom Furniture, headquartered in Los Angeles, California, embodies the entrepreneurial journey of Kiersten Hathcock, its founder. Hathcock’s background is marked by a blend of determination, creativity, and a commitment to sustainability. Ten years ago, Hathcock’s life took an unexpected turn when she found herself navigating the unfamiliar territory of designing and building modern furniture out of her garage. Despite her lack of formal training in woodworking or design, Hathcock embarked on a journey of self-teaching and experimentation.
The inspiration for Mod Mom Furniture emerged from a simple yet frustrating experience: the quest for a modern and eco-friendly toy box for her family. Dissatisfied with the options available on the market, Hathcock decided to take matters into her own hands. Armed with a vision of merging sustainability with stylish design, she set out to create something unique. The result was a series of handcrafted toy boxes, each infused with Hathcock’s passion for craftsmanship and environmental consciousness.
Hathcock’s journey embodies the spirit of resilience and ingenuity. From teaching herself woodworking techniques to designing toy boxes that seamlessly blend into contemporary home decor, she has demonstrated a remarkable ability to turn challenges into opportunities. Mod Mom Furniture stands as a testament to her determination to not only meet a need in the market but also to do so in a way that aligns with her values of sustainability and quality craftsmanship.
The Product
Mod Mom Furniture’s flagship product is its line of meticulously handcrafted toy boxes, designed to revolutionize the way families organize and store children’s toys. These eco-friendly toy boxes feature a distinctive puzzle piece lid design, adding a playful touch to their functionality. Crafted with precision and care, each toy box is a testament to Mod Mom Furniture’s commitment to quality craftsmanship and sustainability.
The toy boxes are not only stylish additions to any modern home but also serve a practical purpose. Their spacious interiors provide ample storage for toys, books, and other children’s belongings, helping families keep their living spaces tidy and organized. The puzzle piece lid design adds an element of fun, enticing children to participate in cleaning up after playtime.
Customers can purchase Mod Mom Furniture’s toy boxes directly from their website or through select retailers. Priced at $475, each toy box includes shipping, making it a convenient and accessible option for families seeking both style and functionality in their home storage solutions. With their durable construction and timeless design, Mod Mom Furniture’s toy boxes are a long-lasting investment for families looking to enhance their living spaces while supporting sustainability initiatives.
How It Went
The company’s position before Shark Tank
Mod Mom Furniture has experienced significant growth since its inception, propelled by strong demand for its eco-friendly toy boxes and a reputation for quality craftsmanship. Despite operating out of a garage in Los Angeles, California, the company has garnered attention both domestically and internationally, attracting orders from celebrities and retailers across 17 countries. While Mod Mom Furniture has demonstrated promising sales figures, the company faces challenges in scaling production to meet increasing demand.
As a result, founder Kiersten Hathcock sought investment to establish manufacturing partnerships and expand the product line. Mod Mom Furniture’s customer base comprises families seeking stylish and sustainable storage solutions for their homes, as well as retailers looking to offer unique products to their clientele. The company has also received interest from wholesalers interested in distributing its products to a wider audience. In terms of funding, Mod Mom Furniture relies on a combination of bootstrapping and potential future investments to finance its operations and expansion efforts.
Hathcock’s resourcefulness and determination suggest a resilient business model capable of navigating challenges and seizing opportunities in the market. As for the company’s structure, Mod Mom Furniture is likely organized as a small-scale operation, with Hathcock overseeing design, production, and sales. However, as the company grows, Hathcock may consider restructuring to accommodate increased demand and streamline operations, potentially seeking strategic partnerships or hiring additional staff to support expansion initiatives.
The Negotiations:
During the negotiations on “Shark Tank,” Kiersten Hathcock of Mod Mom Furniture sought a $90,000 investment in exchange for a 25% equity stake in her company. Both Kevin O’Leary and Robert Herjavec expressed interest in Hathcock’s business, but their offers diverged in terms of terms and conditions. O’Leary proposed a $90,000 investment for a 33% equity stake and a 7.5% royalty on sales until his investment was recouped. This offer reflected O’Leary’s preference for immediate returns on investment and his concern for liquidity.
On the other hand, Herjavec offered the same $90,000 investment for a 33% equity stake but without an immediate royalty. Instead, Herjavec proposed revisiting the idea of a royalty once Mod Mom Furniture reached a certain sales threshold, demonstrating his understanding of the challenges faced by small businesses and his willingness to adapt terms based on future success. Ultimately, Hathcock chose to accept Herjavec’s offer, valuing his experience in scaling businesses and his understanding of the long-term needs of small entrepreneurs.
Her decision highlighted the importance of finding a partner who not only provides financial support but also shares a vision for the company’s growth and sustainability. Despite not securing a deal with the other Sharks, Hathcock’s successful negotiation with Herjavec positioned Mod Mom Furniture for continued success and expansion.
