Teddy Needs a Bath – Laundry Bag for Stuffed Animals
DEAL
EPISODE SUMMARY
🕓 Air Date: January 11, 2013
Asking For:
$50,000 for 10%
Investor:
Mark Cuban
Deal:
$100,000 for 30% + 10% royalty until investment is repaid
PRODUCT SUMMARY
Teddy Needs a Bath is the first washer and dryer bag designed specifically for stuffed animals, providing an easy solution for parents to clean their child's favorite toys safely.
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Background Story
Nicole Townend, the founder of Teddy Needs a Bath, resides in Huntington Beach, California, with her husband, professional skateboarder Tosh Townend, and their daughter Jemmalyn. Struggling to keep her daughter’s toys clean and germ-free, Nicole identified a gap in the market for a product like Teddy Needs a Bath. Faced with financial challenges due to her husband’s decreasing income in skateboarding and the necessity to support her family, Nicole embarked on the journey of entrepreneurship to bring her innovative idea to life.
The Product
Teddy Needs a Bath is a simple yet effective solution for cleaning stuffed animals. Users simply place the toys inside the specially designed bag, zip it up, and put it in the washer and dryer. The bag prevents damage to both the toys and the appliances, ensuring a thorough cleaning process.
Additionally, the product comes with a children’s book to accompany the cleaning process, enhancing its appeal to parents and children alike. Teddy Needs a Bath is priced at $14.99 and is available for purchase online.
How It Went
The company’s position before Shark Tank
The company has experienced a modest start, with a hard launch in January and initial sales of a few hundred units primarily through word-of-mouth marketing. Teddy Needs a Bath secured a spot on the Babies”R”Us website and received positive feedback, leading to potential partnerships with major retailers such as Rite Aid, Walgreens, CVS, and Target. However, the company’s financials show a revenue of $12,000 over a six-month period, indicating room for growth and scalability.
The Negotiations:
Nicole initially sought $50,000 for 10% equity, presenting her innovative product to the sharks. Despite initial interest from several sharks, negotiations intensified as they probed into the product’s potential and market viability. Kevin O’Leary, impressed by Nicole’s pitch and recognizing the product’s market need, made an offer of $50,000 for 30% equity and a 10% royalty until his investment is recouped. This offer was contingent upon Nicole securing more capital to meet growing demand.
Mark Cuban also expressed interest, offering $100,000 for 40% equity but with a different royalty structure. However, he emphasized the need for a larger market validation before committing. Nicole took a moment to consult with her husband, considering the offers on the table. Ultimately, she countered $100,000 for 30% equity and a 10% royalty to Mark, acknowledging his belief in the product’s potential and commitment to its success. With Mark’s investment and guidance, Teddy Needs a Bath is poised for rapid growth and expansion into new markets.
