The Elephant Pants
DEAL
EPISODE SUMMARY
🕓 Air Date: February 24, 2017
Asking For:
$500,000 for 10%
Investor:
Daymond John
Deal:
$500,000 for 15% and 2.5% in advisory shares
PRODUCT SUMMARY
Elephant Pants produces comfortable harem pants with a mission to save elephants, donating 10% of net profits to the African Wildlife Foundation.
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Background Story
Nathan Coleman and James Brooks, the brains behind Elephant Pants, hail from Brooklyn, New York. Despite not being brothers, they formed a strong bond during their college years, sharing a common interest in entrepreneurship and a passion for wildlife conservation. The Elephant Pants journey began with a pivotal experience in 2013 when Nathan ventured to Thailand for tourist activities. During their travels, they stumbled upon an “elephant sanctuary” that, unfortunately, revealed a grim reality — mistreatment, chaining, and abuse of these majestic creatures.
Deeply affected by what they witnessed, Nathan and James were compelled to take action. The revelation sparked a profound commitment to make a positive impact on the lives of elephants. Motivated by their love for these animals, the duo embarked on a mission to create a business with a dual purpose — offering a product that brings comfort and style while contributing to the welfare of elephants. They decided to design and manufacture harem pants, a unique and comfortable fashion item. The quirky and comfortable pants became the flagship product, with the brand’s motto encapsulated in three words: “Save elephants.
Feel good.” Their commitment went beyond mere symbolism, as they committed 10% of the company’s net profits to the African Wildlife Foundation, providing tangible support to the cause they held dear. The Elephant Pants founders, leveraging their college friendship and shared values, turned a chance encounter into a thriving business with a social mission, successfully blending fashion and conservation in the heart of Brooklyn.
The Product
Elephant Pants’ flagship product, the harem pants, are more than just comfortable attire; they represent a fusion of style and philanthropy. Crafted with a focus on comfort and unique designs, these pants have become a symbol of the brand’s commitment to elephant conservation.
The harem pants, often dubbed the “most comfortable pants in the world,” boast a relaxed and loose fit, offering wearers a comfortable and stylish option for various occasions. The designs range from vibrant and eclectic patterns to more subdued and classic choices, catering to a diverse customer base.
The pants, adorned with intricate designs and made from quality materials, are suitable for a wide demographic, with the core audience being 18- to 24-year-old females and men who appreciate both comfort and style.
The founders have strategically marketed their product through various channels, including social media, influencers, and affiliate networks, creating a strong online presence with a substantial following on platforms like Facebook and Instagram.
Customers can purchase Elephant Pants directly from the company’s e-commerce website, where the diverse range of styles and sizes is available at a retail price of $24 per pair. The founders have successfully utilized effective marketing strategies to drive sales, with the majority of revenue generated through online sales, supplemented by a smaller portion from wholesale transactions.
How It Went
The company’s position before Shark Tank
Elephant Pants has exhibited robust performance, positioning itself as a successful player in the fashion industry with a unique philanthropic twist. With a remarkable $7 million in sales over two years, the company’s financial health reflects the popularity of its harem pants and the effectiveness of its marketing strategies. The company primarily operates through its e-commerce website, constituting 95% of its sales, showcasing a strong online presence. Complementing this, 5% of sales come from wholesale transactions, demonstrating a diversified revenue stream. The founders have strategically utilized Facebook advertising, social media, influencers, and affiliate networks to reach a broad audience, with 230,000 followers on Facebook and 116,000 on Instagram.
Elephant Pants has effectively positioned itself in the market with a core demographic of 18- to 24-year-old females, and men also contribute significantly to their customer base. The brand’s commitment to elephant conservation appeals to environmentally conscious consumers, contributing to its popularity among a socially conscious audience. Funding for the company has primarily been generated through its sales, with a significant portion allocated to marketing efforts, particularly on Facebook. In the previous month, the company reported $430,000 in sales with a $75,000 advertising spend, reflecting a healthy balance between revenue and marketing investment. Profits have allowed Elephant Pants to make a meaningful impact on the cause it supports, with $115,000 donated to the African Wildlife Foundation.
The founders have successfully navigated the business landscape, achieving profitability while staying true to their mission. The company’s structure predominantly revolves around its founders, Nathan Coleman and James Brooks, who have orchestrated a successful blend of fashion and conservation. They have effectively managed to maintain control and ownership, with a focus on sustainable growth. The majority of sales occur through their e-commerce platform, and 5% through wholesale channels. Elephant Pants’ strong financial performance, strategic marketing, and commitment to social responsibility position it as a notable and conscientious player in the fashion industry.
The Negotiations:
The negotiations for Elephant Pants on Shark Tank showcased a rollercoaster of offers, counteroffers, and strategic considerations. Nathan Coleman and James Brooks initially sought $500,000 for a 10% equity stake in their company. Daymond John made the first offer, proposing $500,000 for a 20% equity share. This offer faced competition from Kevin O’Leary, who also offered $500,000 for 20%. Lori Greiner and Robert Herjavec opted out, leaving Daymond and Kevin in the negotiation ring.
Daymond, recognizing the company’s success and unique marketing approach, adjusted his offer to $500,000 for 17.5% equity. This prompted Kevin and Lori to drop out of the negotiations. Daymond’s offer was met with a counterproposal from the founders, who asked if he would consider 15% equity. Kevin and Lori then returned to the negotiation table, proposing a joint offer of $500,000 for 15% equity. The founders, Nathan and James, ultimately declined both offers, choosing to go with Daymond’s initial proposal of $500,000 for 17.5% equity.
The negotiation process highlighted the delicate balance between valuation, equity distribution, and the strategic value each shark brought to the table. The founders expressed confidence in Daymond’s ability to drive the company’s growth, appreciating his expertise in the industry. The negotiation concluded with a celebratory Hammer dance, marking the beginning of a partnership between Elephant Pants and Daymond John. The entire negotiation showcased the founders’ commitment to their cause and their strategic decision-making in choosing the right shark for their journey.
