Proper Good Meal & Soup Delivery
DEAL
EPISODE SUMMARY
🕓 Air Date: October 15, 2021
Asking For:
$400,000 for 10%
Investor:
Mark Cuban
Deal:
$400,000 for 20%
PRODUCT SUMMARY
Proper Good offers convenient, shelf-stable, and high-quality 90-second meals suitable for various dietary lifestyles.
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Background Story
Christopher and Jennifer Jane, the entrepreneurial siblings behind Proper Good, hail from England and drew inspiration from television shows like “Dragons’ Den.” In 2020, amidst the global pandemic, they embarked on their culinary journey by founding Proper Good. Recognizing the rising trend of e-commerce, they strategically channeled their efforts into the online marketplace. Their vision was crystal clear: to revolutionize the meal industry by offering premium, shelf-stable meals tailored to the needs of individuals who prioritize health and convenience.
As they ventured into this endeavor, they envisioned a world where people could enjoy gourmet-quality meals without the hassle of extensive preparation or the need for refrigeration. Proper Good became their answer to this vision, providing a range of delectable 90-second meals that catered to various dietary lifestyles. Their dedication to offering top-quality, hassle-free dining options struck a chord with consumers, as evidenced by their rapid sales growth.
The Jane siblings’ journey from England to Austin, Texas, is a testament to their commitment to delivering Proper Good meals to discerning customers. Their innovative approach to ready-to-eat meals has garnered significant attention and investment interest, as demonstrated by their successful pitch on “Shark Tank.”
The Product
Proper Good has redefined meal convenience with its range of ready-to-eat offerings, all of which can be prepared in a mere 90 seconds without requiring refrigeration. This level of convenience caters perfectly to the demands of today’s fast-paced lifestyles. The diverse menu includes tantalizing choices like Red Pepper and Meatball soup, Chicken Noodle, Southwest Chili with plant-based meat, and Quinoa Brown Rice Blend, ensuring there’s something to satisfy every palate and dietary preference.
What sets Proper Good apart is not only the speed and ease of preparation but also its affordability. Each meal comes at an average price of $7, making gourmet-quality dining accessible to a broad audience. For those looking for even more value, Proper Good offers a subscription option at just $5.99 per meal, ensuring regular access to their delectable offerings without breaking the bank.
Furthermore, the company’s direct-to-customer shipping model ensures that these culinary delights reach consumers’ doorsteps with utmost convenience. Proper Good’s commitment to both quality and accessibility has contributed significantly to its impressive sales figures and its ability to capture the attention of investors on “Shark Tank.”
How It Went
The company’s position before Shark Tank
Proper Good’s performance paints a picture of remarkable growth and potential in the competitive food industry. In their inaugural year, the company celebrated an impressive milestone, securing $556,000 in sales. What’s even more impressive is that, during the “Shark Tank” pitch, their year-to-date sales had already soared past the $1 million mark. This exceptional revenue trajectory was largely attributable to their effective direct-to-consumer sales strategy, aligning perfectly with the surge in online shopping trends during the COVID-19 pandemic.
However, this rapid expansion came at a cost. The company openly acknowledged that they had mobilized approximately $2 million in funding, emphasizing their willingness to invest heavily in customer acquisition and product development. This bold strategy resulted in a short-term loss as they worked diligently to grow their customer base and expand their product line.
Nonetheless, Proper Good displayed a solid gross margin of around 65%, indicating the profitability potential inherent in their business model. Their net margin of approximately $300,000 demonstrated that, despite the initial investments and losses, the company was on a trajectory toward sustainable profitability. This financial snapshot showcased Proper Good’s viability and justified the interest it garnered from the Sharks on the show.
The Negotiations:
The negotiation phase of Proper Good’s pitch on “Shark Tank” was both intriguing and pivotal in shaping the company’s future. Several Sharks initially expressed interest in the business, recognizing its potential in the rapidly evolving food industry. However, they voiced concerns and ultimately made their decisions. Kevin O’Leary raised the critical issue of customer acquisition cost and the absence of a clear customer lifetime value, indicating that Proper Good was not yet ready for his investment.
Lori Greiner admired the product but felt it was too early for her to invest, emphasizing the need for more flavors and a more proven track record. Robert Herjavec echoed concerns about customer acquisition costs, expressing the importance of understanding this metric in a business like Proper Good’s. He believed that without a clear strategy, the company risked a cycle of high burn rates and dilution. Mark Cuban, known for his sharp business acumen, recognized Proper Good’s potential for explosive growth and profitability.
He made a bold offer of $400,000 for 25% equity. After some negotiation, the deal was finalized at 20% equity, highlighting Cuban’s confidence in the company’s future success. This negotiation highlighted the importance of understanding key financial metrics like customer acquisition cost and customer lifetime value. Mark Cuban’s investment signified his belief in Proper Good’s potential to thrive and expand, despite the initial challenges. The negotiation ended on a positive note, with the founders accepting Cuban’s offer, setting the stage for Proper Good’s promising future.
