PrideBites – Customized Pet Products
DEAL
EPISODE SUMMARY
🕓 Air Date: April 8, 2016
Asking For:
$200,000 for 10%
Investor:
Lori Greiner, Robert Herjavec (50/50)
Deal:
$200,000 for 20%
PRODUCT SUMMARY
PrideBites offers customizable pet products, allowing pet owners to design and personalize items such as collars, toys, and accessories for their furry friends.
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Background Story
PrideBites, founded by Steven Blustein and Sean Knecht, originated in their college apartment. The entrepreneurial duo started by selling a versatile and award-winning dog toy called the “Pride Bite,” which won Dog Toy of the Year. The product was machine washable, floated, and squeaked, making it highly versatile. Over time, they expanded their offerings to include a range of customizable pet products.
Their inspiration came from the belief that pets are family members deserving of unique and personalized items. The founders began by selling their products door-to-door and at football tailgates. As the business grew, they developed a proprietary system to efficiently organize the customization process, allowing them to manufacture personalized pet products overseas.
The Product
PrideBites offers a unique and customizable pet product experience. Pet owners can visit the company’s website and choose from a variety of high-quality products, including collars, toys, and accessories. The customization process involves selecting the size, color, pattern, and design of the chosen product.
Customers can further personalize the item by adding their pet’s name or opting for a hand-drawn portrait. The founders emphasize that PrideBites differentiates itself from competitors like Shutterfly by custom-manufacturing products from scratch rather than simply placing a picture on an existing item.
The manufacturing is done overseas, facilitated by a proprietary system that streamlines the customization process, allowing for scalability. PrideBites aims to provide one-of-a-kind products, that reflect the uniqueness of each pet.
The product range includes items like personalized collars and toys, with prices ranging from $9.99 to $150. The turnaround time for delivery is initially four weeks, with plans to reduce it to two weeks and eventually one week.
How It Went
The company’s position before Shark Tank
PrideBites has been in operation for approximately 2.5 years, with sales to date reaching $1.4 million. Their current annual sales pace is $1.3 million. The business model includes both online sales and partnerships with brands and retailers, with the latter contributing to about 70% of their sales. The founders highlight their efforts to enhance the customer experience by prototyping custom kiosks within stores, allowing in-person customization.
In terms of margins, the founders indicate a 50% margin landed to the consumer for their products. The online platform is becoming the primary focus, with the intention to scale and improve delivery times. The company’s ability to efficiently produce customized products for brands and retailers has contributed to its success.
The Negotiations:
The pitch attracted interest from Robert Herjavec, who offered $200,000 for 20% equity. Lori Greiner also expressed interest and offered $200,000 for 18% equity. Sensing an opportunity, Robert and Lori proposed a joint offer of $300,000 for 20% equity, with both Sharks coming on board. The founders negotiated to bring the equity down to 20%, accepting Robert’s and Lori’s joint offer. However, Kevin O’Leary and Mark Cuban opted out, citing concerns about scalability and market challenges.
In a surprising turn of events, Kevin suggested a counteroffer after the deal was seemingly settled. He proposed a deal with Robert for $300,000 for 30%, attempting to negotiate a more favorable outcome for himself. However, the founders stuck to the joint offer from Robert and Lori, securing a deal for $300,000 for 20% equity with both Sharks on board. The negotiation showcased the founders’ ability to navigate the negotiation process successfully and secure a beneficial deal for their pet product business.
