Parting Stone – Solidified Remains
DEAL
EPISODE SUMMARY
🕓 Air Date: April 7, 2023
Asking For:
$400,000 for 5%
Investor:
Kevin O'Leary, Lori Greiner (50/50)
Deal:
$400,000 for 10% + $20 royalty for DTC + $12.50 royalty for B2B
PRODUCT SUMMARY
Parting Stone offers a unique way to remember loved ones by transforming cremated remains into a collection of smooth stones, providing a comforting alternative to traditional urns.
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Background Story
Parting Stone’s founder, Justin, was inspired to create the company after the passing of his beloved grandfather, who had a variety of hobbies and interests. Justin’s grandfather’s remains were returned in an awkward plastic bag, prompting him to seek a more dignified way to remember loved ones after cremation. This experience led to the creation of Parting Stone, a company dedicated to providing a meaningful and comforting solution for grieving families.
The company is based in the United States and Canada and operates primarily through partnerships with funeral homes. The founders’ personal experience with the inadequacies of traditional methods of handling cremated remains drove them to create a unique alternative. Their goal is to offer families a more meaningful and aesthetically pleasing way to remember and honor their loved ones, making the grieving process more comforting and less awkward.
The founders have also recognized the potential in the pet market and have expanded their services to include pets, making Parting Stone suitable for both humans and animals. Their background and motivation revolve around creating a product that eases the grieving process for families and brings a sense of comfort during difficult times.
The Product
Parting Stone’s unique offering involves a process that transforms cremated remains into a collection of smooth stones, resembling small, hand-sized pebbles. The appearance of each collection of stones varies naturally, with different hues, textures, and colors for each individual.
The stones offer a tactile and visual connection to the deceased, providing a comforting way for families to remember their loved ones. The company primarily partners with funeral homes, allowing grieving families to choose the Parting Stone option through the funeral home’s services.
After the cremation process is complete, the remains are transformed into these stones and returned to the family, who can then choose to keep them, share them with the community, or place them in meaningful locations.
Parting Stone’s pricing structure includes a retail price of $995 for human remains, and this cost includes shipping. For pets, the pricing is $595 for dogs and $495 for cats, also inclusive of shipping. The B2B cost for working with funeral homes is $300 for human remains.
The product is marketed as a more meaningful and aesthetic alternative to traditional urns, making it suitable for families who want a more comforting way to remember their loved ones.
How It Went
The company’s position before Shark Tank
Parting Stone has made significant progress in establishing its presence in the market. The company operates in the United States and Canada and has partnered with approximately 600 funeral homes. These partnerships allow them to reach a significant portion of the market for cremation services. 75% of the company’s business is conducted through these B2B relationships, with funeral homes recommending and providing their services to grieving families. Additionally, 25% of their business is directly with consumers.
In terms of the company’s financials, they have experienced substantial revenue growth in recent years. In 2020, Parting Stone generated $350,000 in revenue but operated at a loss of approximately $300,000. In 2021, their revenue increased to around $850,000, but they still incurred losses of about $800,000. The company projected to achieve $1.3 million in revenue in 2022 but was also expecting losses of approximately $800,000.
The losses are attributed to the company’s current business model, which, according to the founder, can be fixed through automation with additional funding. To date, Parting Stone has raised a total of $2.5 million in investments. They have 55 angel investors supporting their business. The company’s current structure involves partnerships with funeral homes and a direct-to-consumer approach. Their goal is to enhance automation in their processes to reach profitability.
The Negotiations:
During the “Shark Tank” pitch, Justin from Parting Stone sought a $400,000 investment for 5% equity in his company. He presented his unique business of transforming cremated remains into smooth stones and shared his motivation for creating a more comforting alternative to traditional urns.
Lori Greiner and Kevin O’Leary made a joint offer of $400,000 for 10% equity each, and they proposed a royalty structure. Barbara Corcoran also offered $400,000 for 10% equity but suggested a different royalty structure. At this point, Justin accepted Lori and Kevin’s offer with a royalty on direct-to-consumer sales, but the negotiation was still ongoing.
Ultimately, Justin accepted Lori and Kevin’s offer of $400,000 for 10% equity with a royalty structure of $12.5 on business-to-business sales and $20 on direct-to-consumer sales. He valued their expertise and the fact that he would be gaining two Sharks as partners. Lori and Kevin’s offer effectively provided him with the funding he needed to further develop and automate his business model, moving closer to profitability.
