Stress Free Kids
DEAL
EPISODE SUMMARY
🕓 Air Date: August 23, 2009
Asking For:
$250,000 for 20%
Investor:
Barbara Corcoran
Deal:
$250,000 for 50%
PRODUCT SUMMARY
Stress Free Kids offers books and CDs designed to help children manage stress and promote better sleep by incorporating relaxation techniques into entertaining stories.
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Background Story
Lori Lite, the founder of Stress Free Kids, resides in Marietta, Georgia, with her husband and three children. Their journey began with personal struggles managing stress and anxiety, particularly with their hyperactive son, which led Lori to seek out stress management techniques. Attending stress management classes, Lori learned effective relaxation techniques that not only benefited her but also had a profound impact on her son’s ability to sleep peacefully.
Inspired by this transformative experience, Lori embarked on a mission to share these techniques with other families facing similar challenges. She envisioned creating a series of products that would help children manage stress and anxiety while promoting self-esteem and better sleep. Leveraging her firsthand experience and passion for helping others, Lori developed a line of books and CDs that combined relaxation techniques with entertaining stories, making them accessible and engaging for children.
With her background in stress management and firsthand experience as a parent, Lori poured her heart and soul into developing Stress Free Kids. Despite facing financial difficulties and having to make sacrifices, such as selling their home and sharing one car, Lori and her husband remained committed to their vision of bringing effective stress management tools to households across America. Their journey led them to the Shark Tank seeking investment to scale their business and reach a wider audience, driven by their belief in the transformative power of their product.
The Product
Stress Free Kids offers a range of products designed to help children manage stress and anxiety while promoting better sleep and self-esteem. The cornerstone of their product line includes books and CDs featuring captivating stories intertwined with relaxation techniques. For instance, “Angry Octopus,” one of their popular titles, guides children through progressive muscular relaxation exercises, encouraging them to tighten and release muscles to release tension.
Each product is carefully crafted to be engaging and accessible to children, making it easy for parents to incorporate relaxation techniques into their daily routines. The stories are designed to capture children’s imaginations while teaching them valuable coping mechanisms for managing stress.
Stress Free Kids’ products are available for purchase online through their website and major retail outlets such as Amazon, Barnes & Noble, and Borders. Prices vary depending on the product format, with CDs typically priced around $15 to $20 and books ranging from $10 to $15. Additionally, the company offers bundled packages and discounts for bulk purchases, making their products affordable and accessible to families seeking effective stress management solutions for their children.
How It Went
The company’s position before Shark Tank
Stress Free Kids has demonstrated solid performance in the market, with consistent sales and a growing customer base. The company’s products have resonated with parents seeking effective tools to help their children manage stress and anxiety. Despite facing financial challenges, such as limited funding and personal investment from the founders, Stress Free Kids has managed to achieve revenues of $180,000 in the previous year, with a profit of $50,000.
The company’s distribution channels include major retailers like Amazon, Barnes & Noble, and Borders, as well as direct sales through their website. By leveraging these partnerships, Stress Free Kids has been able to reach a wide audience and expand its market presence.Stress Free Kids’ target customers primarily consist of parents and caregivers looking for resources to support their children’s emotional well-being. With increasing awareness of the importance of mental health in children, the demand for products like those offered by Stress Free Kids is expected to continue growing.
In terms of funding, Stress Free Kids has relied on personal investment from the founders to sustain operations and drive growth. However, to further scale the business and capitalize on market opportunities, the company sought additional investment through the Shark Tank platform. Currently, Stress Free Kids is structured as a privately owned company, with Lori Lite as the founder and primary decision-maker. The company’s success is attributed to its dedication to providing high-quality products that address a genuine need in the market, combined with strategic partnerships and a commitment to customer satisfaction.
The Negotiations:
During the negotiations on Shark Tank, Lori Lite, the founder of Stress Free Kids, initially sought $250,000 for 20% equity in her company. She received two offers: Barbara Corcoran offered $250,000 for 50% equity, and Daymond John offered the same amount for 51% equity, emphasizing his intent to build a brand around Stress Free Kids.
Consulting with her husband, Lori countered, expressing reluctance to give up more than 40% of her company. Barbara withdrew her offer, citing the importance of retaining control over her investment. Daymond reiterated his need for majority control but accepted Lori’s revised offer of $250,000 for 51% equity. Despite the perceived high valuation, Lori saw the deal as an opportunity to leverage Barbara’s expertise in branding and scaling the business.
Ultimately, Lori accepted Barbara’s offer, recognizing the potential benefits of his involvement in expanding Stress Free Kids. Despite some initial hesitation and concerns about relinquishing majority control, Lori prioritized securing the investment needed to propel her company’s growth. The negotiations showcased the importance of strategic partnerships and the willingness to compromise to achieve long-term success.
