Sparketh Online Art Courses
DEAL
EPISODE SUMMARY
🕓 Air Date: October 22, 2021
Asking For:
$100,000 for 8%
Investor:
Barbara Corcoran, Daniel Lubetzky (50/50)
Deal:
$100,000 for 20%
PRODUCT SUMMARY
Sparketh is an online art education platform for kids and teens, providing access to a library of over 1,000 art video lessons taught by specialized mentors, fostering creativity and artistic skills.
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Background Story
Sparketh, an online art education platform, was born from the friendship and shared passion of its co-founders, Dwayne and Tim. Hailing from Atlanta, Georgia, these childhood friends embarked on a remarkable journey to ignite creativity in the minds of children and teens. The inspiration for Sparketh emerged from a realization that traditional education often neglects the importance of nurturing young minds’ artistic potential.
Dwayne and Tim firmly believed that a child’s imagination knows no bounds and should be encouraged to flourish. Their mission became clear: create a platform that empowers young individuals to explore their creative talents and emotions freely. Starting as broke college students with a mere $500, the duo entered the homeschooling market, despite its tight-knit and challenging nature to penetrate. They attended expos, dedicating themselves to showcasing their vision and platform to parents seeking a solution to teach creativity to their children.
Through grit, determination, and ingenuity, Dwayne and Tim used their limited resources to build the initial version of Sparketh. Dwayne’s passion for film and video drove him to teach courses, while Tim handled the filming and editing. Together, they acquired the technical skills necessary to create their minimum viable product (MVP). Their journey was marked by adversity, including health challenges such as Dwayne’s battle with sickle cell disease. However, they persevered, leading Sparketh on a path of continuous growth and impact, one art lesson at a time.
The Product
Sparketh is a revolutionary online art education platform tailored specifically for children and teenagers. Its standout feature is its vast library comprising over 1,000 art video lessons, all thoughtfully crafted and taught by engaging mentors who specialize in various artistic fields.
What sets Sparketh apart is its dedication to making learning engaging and manageable for young minds, offering bite-sized video lessons that span just 5 to 10 minutes each. This format encourages retention and active participation.
A key innovation of Sparketh is its virtual art portfolio, a feature that empowers users to not only learn but also create and share their artistic endeavors with a global community. This not only fosters a sense of achievement but also nurtures creativity and a supportive network for budding artists.
Sparketh operates on a subscription model, with parents investing $25 per month, granting access to two student accounts for their children. This pricing structure ensures affordability and accessibility for families looking to enrich their children’s artistic education.
By providing a convenient and engaging platform, Sparketh empowers young artists to evolve from novices with a blank canvas to creators of full-fledged masterpieces while nurturing their artistic talents and fostering a lifelong love for art.
How It Went
The company’s position before Shark Tank
Sparketh’s journey in the online art education realm has been marked by dedication and growth. Founded in Atlanta, Georgia, by childhood friends Dwayne and Tim, the company has steadily progressed since its inception in 2015. In terms of financial performance, Sparketh reported $300,000 in revenue in the previous year, with an impressive surge compared to earlier years, such as $75,000 in the year prior and $110,000 before that. This remarkable growth indicates a positive trajectory.
Sparketh primarily operates in the direct-to-consumer space, focusing on a subscription-based model. The core customer base consists of parents seeking to enrich their children’s creative education. Subscribers pay $25 per month, granting access to two student accounts. The company has successfully infiltrated the homeschool market and targeted parents striving to cultivate creativity in their children. While customer acquisition costs are relatively high at $51.50, the customer lifetime value averages around $160, with retention spanning approximately six to seven months.
Despite not being explicitly profitable at present, Sparketh has maintained a break-even position. They possess the capability to become profitable but are actively investing in content and platform improvements to fuel further growth. As for the company’s ownership structure, Dwayne and Tim co-founded Sparketh, with Barbara Corcoran and Daniel Lubetzky joining as investors. The infusion of capital and expertise from these seasoned entrepreneurs positions Sparketh favorably for future success.
The Negotiations:
During the negotiation on “Shark Tank,” the co-founders of Sparketh, Dwayne and Tim, faced a challenging decision with three Sharks expressing their thoughts. Barbara Corcoran made an initial offer of $100,000 for 20% equity in the company, contingent on Sparketh proving profitability within six months. This offer carried the promise of mentorship and support from Barbara, a seasoned entrepreneur. However, it also required a larger equity stake.
Kevin O’Leary expressed concerns about the company’s financials, emphasizing the need for profitability. He offered a $100,000 investment for 8% equity, but with a clear focus on achieving returns. Ultimately, Daniel Lubetzky presented a unique proposition. He offered $100,000 for 20% equity, aligning with Barbara’s offer. However, he emphasized the importance of their mission and the opportunity to impact children’s creativity globally.
After deliberation, Dwayne and Tim accepted Daniel and Barbara’s joint offer. This decision allowed them to secure the necessary capital for their vision while gaining mentorship and support from two successful entrepreneurs. The negotiation reflected the co-founders’ commitment to their mission, their belief in the potential impact of Sparketh, and their willingness to work closely with experienced investors to realize their vision.
