Wondercide – Pest Control for Pets
DEAL
EPISODE SUMMARY
🕓 Air Date: March 18, 2016
Asking For:
$500,000 for 5%
Investor:
Lori Greiner
Deal:
$500,000 for 3% + $0.50/unit sold royalty until repayment
PRODUCT SUMMARY
Wondercide is a natural and organic bug repellent product line that is safe for pets and humans, effectively killing bugs without toxic chemicals.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Stephanie Boone and Laura Alter, founders of Wondercide, hail from Austin, Texas. Stephanie, a former real-estate tax accountant with no formal training in chemistry or business, embarked on creating Wondercide when her dog Luna had an adverse reaction to a vet-prescribed flea-and-tick control product. Fueled by Luna’s experience, Stephanie became a self-taught “mad scientist,” setting up her garage laboratory to develop a natural bug repellent. Laura Alter joined her, and together they formed Wondercide to address the issue of toxic pesticides in traditional bug repellents.
The Product
Wondercide offers a range of natural bug-repellent products that are lab-tested, mom-approved, and made in the USA. The formula is effective for various pests, including fleas, ticks, ants, mosquitoes, and bedbugs. It can be used for both pet care and general insect control around the house.
The product is non-staining, dries clear, and is safe for use in the kitchen, on carpeting, and on furniture. Unlike many competitors, Wondercide’s formula contains no water and combines the power of a pesticide with the safety of food-grade ingredients.
The product has been extensively tested, with results showing 100% mortality in under 30 seconds for fleas and significant effectiveness against ticks and bedbugs. With over $4 million in sales, 80% of which are online (45% through their website and 35% on Amazon), Wondercide boasts a strong gross margin of 70%.
How It Went
The company’s position before Shark Tank
Wondercide’s current sales stand at just over $4 million, with a significant portion (75%) coming from the pet market. The company has demonstrated a robust online presence, with 80% of sales occurring through online channels. Their distribution mix includes a 45% share from their website and a 35% share from Amazon. The company maintains an impressive total gross margin of 70%.
The founders are seeking $500,000 in funding to hire a key sales professional who will focus on securing 600 new wholesale accounts within the next 12 months, aiming to generate an additional $1 million in revenue. While the majority of their sales are online, the founders express an intention to proportionately grow in the retail sector without significantly altering their revenue mix.
The Negotiations:
The negotiation started with Wondercide seeking $500,000 for 5% equity. Lori Greiner made an offer of $500,000 for 15%, but the founders found it unfavorable. Kevin O’Leary then proposed $500,000 with a 6.75% royalty until he recoups $1.5 million, along with 3% equity. Lori Greiner later adjusted her offer to $500,000 for 50 cents per unit sold until she recoups her investment, followed by 3% equity. The negotiation continued with other sharks expressing concerns about the high valuation and potential challenges in retail.
Mark Cuban, expressing skepticism about the 5% equity, proposed a licensing deal with The Honest Company. The founders, however, declined the offers that did not align with their vision. Ultimately, the deal was sealed with Lori Greiner’s adjusted offer of $500,000 for 50 cents per unit sold until recouping her investment, followed by 3% equity. The founders were enthusiastic about aligning with Lori’s interests and expressed excitement about the partnership.
