Saavy Naturals
DEAL
EPISODE SUMMARY
🕓 Air Date: November 6, 2015
Asking For:
$200,000 for 10%
Investor:
Barbara Corcoran
Deal:
$200,000 for 40%
PRODUCT SUMMARY
Saavy Naturals offers a line of beauty care products made with food-grade ingredients, emphasizing the use of natural and edible materials.
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Background Story
Debra and Hugo Saavedra, professional chefs with a background in the food industry, founded Saavy Naturals almost 30 years after meeting. Having previously built a company to $10 million in sales but losing majority ownership, Saavy Naturals became their second chance at success.
With a passion for food and beauty care, they applied their culinary skills to create a unique line of beauty products. The couple’s story involves rekindling their relationship after marrying other people, and their journey reflects a strong bond and dedication to making Saavy Naturals thrive.
The Product
Saavy Naturals differentiates itself by offering beauty care products made with food-grade ingredients. The entire product line, including soaps and lotions, is crafted in their kitchen factory for the highest integrity.
The products, priced between $6 and $15, include items like a Tahitian Vanilla and Kukui scrub designed for exfoliation and detoxification. The founders emphasize the purity of their products, highlighting that what you put on your skin should be as pure as the food you eat.
Their approach focuses on natural and organic materials, creating a connection between the quality of skincare and the ingredients used. The products are not only beneficial for the skin but are also presented as so pure that they are almost edible.
How It Went
The company’s position before Shark Tank
Saavy Naturals had approximately $750,000 in sales in the past year, primarily through retail channels like Whole Foods. They expressed a desire to expand their online presence. With a background in the food industry, they leverage their connections to operate in the natural product sector. The company faced challenges in their previous venture, where they built a $10 million company but lost controlling interest due to selling majority ownership to investors.
Starting Saavy Naturals with an investment of around $350,000, they revealed taking on debt, totaling around $400,000 from friends and family. Their current valuation was a subject of debate during the pitch, with the founders seeking $200,000 for 10% equity. The negotiation led to Barbara offering $200,000 for 40% equity, which the founders accepted.
The Negotiations:
The negotiations began with Debra and Hugo seeking $200,000 for 10% equity. Kevin expressed concerns about the valuation, arguing that a soap business is a commodity, and questioned the high multiple. Barbara entered the scene offering $200,000 for 50% equity, but the founders found this too steep. Other sharks, including Lori and Mark, bowed out. Kevin and Mark criticized the valuation, emphasizing the challenges of pricing soap so high.Â
Robert offered $200,000 for a 45% stake in the company. Barbara reentered with a modified offer of $200,000 for 40% equity, which included $100,000 in cash and another $100,000 line of credit and funding purchase orders. The founders accepted Barbara’s offer, securing a deal and expressing gratitude for the unexpected turn of events. The negotiation showcased the importance of flexibility in valuation and the impact of personal connections and stories on the sharks’ decisions.
