The Dirty Cookie Shot Glass
DEAL
EPISODE SUMMARY
🕓 Air Date: April 29, 2022
Asking For:
$500,000 for 5%
Investor:
Robert Herjavec
Deal:
$500,000 for 25%
converts to 15% equity if goal of $6 million in revenue is achieved
PRODUCT SUMMARY
Dirty Cookie offers unique edible shot glasses in various flavors that can be filled with beverages, providing customizable DIY kits and gift boxes for special occasions, including vegan and gluten-free options.
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Background Story
Shahira Marei, originally from Egypt, established Dirty Cookie, an innovative culinary venture based in Orange County, California. Prior to her entrepreneurial pursuit, Shahira held a prominent role as a project manager at Boeing, where she managed projects worth $20 million. Her decision to transition from the corporate world to her dream business was influenced by her deep-seated passion for entrepreneurship, a passion she had harbored since her childhood.
The genesis of the Dirty Cookie concept was sparked by a serendipitous encounter with a picture on the social media platform Pinterest. Intrigued by the image of a woman molding cookie dough into a bowl, Shahira recognized the potential for a novel twist on the classic combination of milk and cookies. Inspired by this vision, she collaborated with an engineer to design and produce a patented mold that could transform traditional cookies into soft and chewy edible shot glasses.
Motivated by a desire to infuse a personal touch into the often impersonal world of gifting, Shahira’s innovative spirit led her to create a line of customizable cookie shot glasses, catering to a wide range of occasions and dietary preferences, including vegan and gluten-free options. Her determination to realize this vision led her to navigate the challenges of the culinary industry, including the shift to DIY kits during the COVID-19 pandemic, ultimately propelling Dirty Cookie to significant growth and recognition within the competitive marketplace.
The Product
Dirty Cookie offers an inventive and delectable twist on traditional cookies, presenting customers with a unique and interactive experience. The core product line consists of cookie shot glasses available in an assortment of tempting flavors such as chocolate chip, red velvet, and double chocolate, alongside a churro variant and a vegan, gluten-free double chocolate option. These cookie shot glasses are specifically designed to be both visually appealing and functionally versatile.
Customers can enjoy the playful experience of sipping various beverages from these edible shot glasses, including milk, coffee, sweet liqueurs, or even the classic pairing of cookie shot glasses with chocolate ice cream. Additionally, Dirty Cookie provides DIY decorating kits and gift boxes that cater to diverse occasions such as birthdays, graduations, and showers, allowing recipients to add their personal touch to the cookie shot glasses with chocolate, sprinkles, and other decorative elements.
The products can be purchased through the Dirty Cookie website, with a dozen cookie shot glasses priced at $49.99. With a focus on customization and personalization, Dirty Cookie endeavors to offer a memorable and engaging gifting experience, transcending the conventional boundaries of traditional treats and establishing itself as a distinctive player in the culinary gifting industry.
How It Went
The company’s position before Shark Tank
Dirty Cookie has exhibited a strong and upward trajectory in terms of its performance and market presence, despite encountering various challenges along the way. The company has witnessed a significant surge in sales, with revenue figures rising from $300,000 in 2018 to $345,000 in 2019, and an impressive leap to $1.27 million in 2020. The unforeseen challenges brought about by the COVID-19 pandemic prompted the implementation of a strategic pivot to DIY kits, resulting in a remarkable sales figure of $2.6 million in 2021. However, despite the substantial revenue, the company’s profit margins remain relatively constrained due to the high production costs, which have led to a debt burden of approximately half a million dollars.
Dirty Cookie has managed to establish crucial partnerships with prominent entities within the gifting industry, securing collaborations with renowned companies such as FTD and 1-800-Flowers. These partnerships have provided Dirty Cookie with enhanced visibility and access to a broader customer base, contributing to the company’s rapid growth and expansion. Additionally, the company has garnered a loyal customer following, comprising individuals seeking unique and personalized gifting options for various occasions.
In terms of funding, Dirty Cookie initially relied on bootstrapping, with the founder, Shahira Marei, making significant personal investments, including the sale of her house and the utilization of her 401(k) savings. The company’s current financial structure reflects a need for external investment to address the challenges posed by high production costs and to facilitate the acquisition of advanced machinery that would improve production efficiency and reduce manufacturing expenses. Despite the existing financial constraints, Dirty Cookie is poised for continued growth and development, with a resilient and determined founder at the helm, supported by a dedicated team of individuals committed to the company’s success and expansion.
The Negotiations:
During the intense negotiations on Shark Tank, Shahira Marei, the founder of Dirty Cookie, encountered both challenges and opportunities as the Sharks evaluated the business’s potential. Several Sharks expressed concerns about the company’s high production costs and its consequent impact on profitability, which raised skepticism regarding the scalability of the business model. Mark Cuban, Kevin O’Leary, Daymond John, and Barbara Corcoran opted out, citing reservations about the business’s sustainability and profitability, emphasizing the need for significant adjustments to the cost structure.
Lori Greiner stepped in with an offer of $250,000 as a loan at 8% interest, coupled with an additional $250,000 investment for 25% equity. However, recognizing the risk involved, she also proposed a reduction in equity to 15% if Dirty Cookie achieved the projected $6 million in sales the following year. Robert Herjavec then presented a competing offer of $500,000 for 25% equity, with a similar reduction to 15% if the company hit its sales target.
Ultimately, Shahira decided to accept Robert’s offer, securing the necessary funding to address the company’s immediate financial needs and unlock opportunities for growth. The negotiation process underscored the critical importance of finding a strategic partner who not only provides financial support but also shares the founder’s vision and is willing to collaborate towards the company’s long-term success and sustainability.
