Solemates Hight Heel Protector Cap
DEAL
EPISODE SUMMARY
🕓 Air Date: October 14, 2016
Asking For:
$500,000 for 10%
Investor:
Robert Herjavec
Deal:
$500,000 for 20%
PRODUCT SUMMARY
Solemates offers the "High Heeler," a heel cap designed to prevent high heels from sinking into grass and getting stuck in cracks, providing comfort and functionality.
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Background Story
Monica Ferguson and Becca Brown, the dynamic duo behind Solemates, brought their unique blend of finance expertise and entrepreneurial spirit to the world of footwear accessories. The founders, who initially crossed paths while working at the prestigious Goldman Sachs after college, shared a vision of addressing a common and often frustrating problem faced by women wearing high heels. Located in an undisclosed area, Solemates was born out of the founders’ personal experiences attending events where high heels became impractical due to sinking into grass or getting stuck in sidewalk cracks.
The entrepreneurial spark ignited when Monica and Becca recognized the need for a solution to enhance the functionality and comfort of high heels without compromising style. Their brainchild, the Solemates High Heeler, is a testament to their innovative thinking. The product, a simple yet effective heel cap, prevents high heels from sinking into soft surfaces by increasing the base’s surface area. This not only solves a common issue faced by women but also liberates them to confidently navigate various terrains while wearing their favorite high heels.
The founders’ background in finance, particularly their experience at Goldman Sachs, played a pivotal role in shaping their approach to entrepreneurship. Their commitment to excellence, combined with a keen understanding of market dynamics, propelled Solemates to not only address a prevalent problem but also to create a product that resonates with women across different occasions. The journey from finance to footwear accessories reflects the founders’ ability to identify and tackle challenges, making Solemates a success story in the world of innovative and practical fashion solutions.
The Product
Solemates’ flagship product, the High Heeler, revolutionizes the experience of wearing high heels by addressing common challenges faced by women. This innovative heel cap serves as a practical solution to prevent high heels from sinking into soft surfaces like grass and getting stuck in cracks, offering both functionality and style.
The High Heeler works by increasing the surface area on the base of the heel, effectively distributing pressure and preventing sinking or getting stuck. This simple yet effective design ensures that women can confidently walk on various surfaces, allowing them to enjoy outdoor events or navigate urban environments without the fear of damaging their beloved high heels.
Available in clear, black, silver, and gold, the High Heeler can be purchased individually for $10 per pair or in a pack of three pairs, containing different sizes, for $30. This pricing structure provides flexibility for customers, catering to their specific needs. The product’s versatility and ease of use make it a must-have accessory for any woman who values both fashion and practicality. Solemates has made the High Heeler accessible through various retail outlets, including Nordstrom, DSW, and David’s Bridal, ensuring that women can easily integrate this innovative accessory into their wardrobe.
How It Went
The company’s position before Shark Tank
Solemates has positioned itself as a thriving player in the footwear accessory market, demonstrating robust health and a strategic market presence. The company’s fiscal performance is marked by impressive revenue figures, with $1.1 million generated in the previous year and a projected increase to $1.3 to $1.5 million for the current year. This growth underscores the widespread appeal of the High Heeler and the effectiveness of Solemates’ business strategy. The company has strategically partnered with prominent retail outlets, including Nordstrom, DSW, and David’s Bridal, to ensure broad market accessibility for their innovative product.
These partnerships not only validate the product’s appeal but also contribute significantly to Solemates’ distribution network and brand visibility. Solemates has effectively tapped into various retail channels, with approximately 3,000 retail doors across the country carrying their product. This includes partnerships with wholesalers, further expanding the brand’s reach and availability to customers. The company’s clientele primarily consists of fashion-conscious women seeking a practical solution to the common challenges associated with wearing high heels. In terms of funding, Solemates has followed a strategic path, initially investing $100,000 collectively when the founders left their roles at Goldman Sachs to pursue their entrepreneurial venture.
To date, the company has successfully raised nearly $1 million from angel investors and friends, illustrating investor confidence in the brand and its potential for continued growth. Profits and losses indicate a sound financial footing for Solemates, with a net profit of $30,000 reported last year. The company maintains a healthy gross profit margin of 65%, showcasing operational efficiency. The company’s organizational structure is marked by the founders, Monica Ferguson and Becca Brown, who collectively own 80% of the business (40/40). Their commitment to the brand is evident in the strategic decisions made, including the acceptance of a deal with Robert Herjavec on Shark Tank.
The Negotiations:
In the Shark Tank negotiations, Solemates founders Monica Ferguson and Becca Brown entered seeking $500,000 for a 10% equity stake in their company. The Sharks were immediately intrigued by the duo’s product, the High Heeler, designed to prevent high heels from sinking into soft surfaces. After a lively demonstration and a discussion about the product’s market potential, the negotiation process began. The negotiation took an unexpected turn as the Sharks delved into the specifics of the business. Kevin O’Leary inquired about the cost of the product, expressing surprise at the high margins and questioning the allocation of revenue.
This prompted O’Leary to make an offer involving a $400,000 loan and a $100,000 investment for 10% equity, a deal that ultimately wasn’t accepted by the founders. Robert Herjavec, recognizing the potential of the product and its market position, made a counteroffer of $500,000 for a larger equity stake of 20%. Despite Kevin O’Leary’s competing offer, the founders opted for Herjavec’s deal, valuing his expertise and understanding of the business. The negotiation concluded with a handshake, securing Robert Herjavec as Solemates’ new partner.
While Mark Cuban and Lori Greiner had earlier bowed out of the negotiations, citing concerns about the business’s valuation and scalability, Robert Herjavec’s offer resonated with the founders’ vision. The negotiation highlighted the delicate balance between equity, investment, and the strategic value a Shark brings to the table. Ultimately, Solemates left the Tank with a significant investment and a seasoned partner in Robert Herjavec, poised for further growth and success in the competitive fashion accessory market.
