Wicked Good Cupcakes
DEAL
EPISODE SUMMARY
🕓 Air Date: April 26, 2013
Asking For:
$75,000 for 20%
Investor:
Kevin O'Leary
Deal:
$75,000 for $1 royalty until the investment is recouped + $0.45 in perpetuity
PRODUCT SUMMARY
Wicked Good Cupcakes offers freshly baked cupcakes layered in jars, shipped with spoons for immediate consumption, appealing to a broad audience.
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Background Story
Founded by Tracy Noonan and her daughter Danielle from Cohasset, Massachusetts, Wicked Good Cupcakes originated from their shared passion for baking. Tracy, inspired by her daughter’s departure to college, suggested they take cake-decorating classes together. Soon after, in October 2011, the idea of Wicked Good Cupcakes was born.
Recognizing the challenge of shipping cupcakes while keeping them fresh, they innovated by packing them into jars. This solution garnered national attention and fueled their growth, leading them to the Shark Tank seeking investment to sustain their expansion.
The Product
Wicked Good Cupcakes specializes in cupcakes packed in jars, ensuring freshness and convenience. These cupcakes are baked daily, layered with homemade frosting and filling, and delivered ready to eat with spoons included.
Available in various flavors and sizes, they cater to a wide range of tastes and preferences. The 8-ounce jars cost $5.95 retail, while the 16-ounce jars cost $8.95 retail. Despite primarily operating online, they also supply wholesale to partners like a local coffee company in Massachusetts.
How It Went
The company’s position before Shark Tank
Wicked Good Cupcakes has seen significant success, with $73,000 in jar sales since January of the current year, and overall sales, including their cupcake shop, totaling $150,000. They project sales of $360,000 for the year. Though primarily online-based, they do have wholesale clients, indicating potential for broader distribution. However, they face challenges in scaling due to limited capital and bulk purchasing capabilities.
The Negotiations:
After receiving offers and feedback from the Sharks, Tracy and Danielle negotiated with Kevin O’Leary, ultimately agreeing to $75,000 for $1 per jar until repaid, then 50 cents in perpetuity. This deal allowed them to retain equity while securing the necessary capital for growth. Ultimately, they struck a deal with O’Leary, agreeing to 45 cents per jar in perpetuity. This negotiation enabled them to secure funding while maintaining control over their business.
