Pan’s Mushroom Jerky
DEAL
EPISODE SUMMARY
🕓 Air Date: November 20, 2020
Asking For:
$300,000 for 10%
Investor:
Mark Cuban
Deal:
$300,000 for 18%
PRODUCT SUMMARY
Pan's Mushroom Jerky offers a healthier, plant-based alternative to traditional jerky made from shiitake mushrooms with various delicious flavors.
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Background Story
Pan’s Mushroom Jerky is founded by Michael Pan, who hails from a family with roots in Malaysia. During a visit to Malaysia, he discovered a delicious vegetarian snack made from shiitake mushrooms, which was both satisfying and healthy. Inspired by this, he decided to share this unique snack with the world.
Michael’s cousin, a vegetarian Buddhist, had been making this mushroom jerky for his family and the local community due to the difficulty of finding tasty and satisfying vegetarian snacks. Impressed by the texture and taste of this snack, Michael realized the potential and set out to create Pan’s Mushroom Jerky.
The Product
Pan’s Mushroom Jerky is a uniquely crafted plant-based snack meticulously made from shiitake mushrooms. This innovative jerky is designed to cater to health-conscious consumers seeking an alternative to traditional meat-based snacks.
Notably, it is gluten-free and soy-free, making it suitable for various dietary preferences, including paleo diets. Pan’s Mushroom Jerky boasts a tantalizing range of four distinct flavors, each carefully curated to deliver a delectable umami experience.
Shiitake mushrooms, the star ingredient, are not only a satisfying and wholesome snack but also an eco-friendly choice. The jerky is meticulously crafted to offer an exceptional texture and flavor profile that appeals to jerky enthusiasts.
For consumers’ convenience, Pan’s Mushroom Jerky is readily available both in brick-and-mortar retail stores, with a significant presence in Whole Foods, and through online channels.
How It Went
The company’s position before Shark Tank
Pan’s Mushroom Jerky has shown impressive growth since its inception. In 2018, the company achieved $300,000 in sales, which more than doubled to $755,000 in 2019. Despite the challenges posed by the COVID-19 pandemic, they maintained strong sales, reaching $620,000 in 2020. The company has secured shelf space in over 700 stores, with 60% of sales coming from retail and 40% from online channels.
Their primary retail partner is Whole Foods, where they are available in two regions. The company has invested $100,000 of Michael’s personal funds and has also utilized loans, including PPP and SBA COVID Disaster loans, to support its growth.
With a margin of approximately 77% across all channels, Pan’s Mushroom Jerky has demonstrated strong profitability. In 2020, they were on track to achieve $1 million in sales and anticipate reaching $1.5 million. The company’s net profit for the year was approximately $61,000, indicating a 10% profit margin.
The Negotiations:
During the pitch on “Shark Tank,” Michael Pan sought $300,000 in exchange for 10% equity in Pan’s Mushroom Jerky. The sharks were impressed with the product’s taste and texture, as well as its potential in the growing plant-based snack market. Mark Cuban and Blake Mycoskie, the founder of Toms Shoes, were particularly enthusiastic about the product and offered a joint deal. They proposed to invest $300,000 in exchange for 30% equity, with each shark taking 15%.
Michael initially hesitated and tried to negotiate Mark Cuban down to 15% equity, but Cuban held firm at 20%. In a surprising turn of events, Michael eventually accepted Mark Cuban’s offer of $300,000 for 18% equity, declining the joint offer with Blake Mycoskie and Lori Greiner.
