You Smell Soap
DEAL
EPISODE SUMMARY
🕓 Air Date: February 3, 2012
Asking For:
$55,000 for 20%
Investor:
Robert Herjavec
Deal:
$55,000 for 20%
PRODUCT SUMMARY
You Smell offers luxury soap bars with unique fragrances and playful packaging, including paper soap for on-the-go use.
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Background Story
You Smell, pitched by Megan Cummins on Shark Tank, originated from a college project where Megan developed the idea for playful soap bars. Megan, a graphic designer, wanted to infuse personality into an often traditional market. After testing the market with custom fragrances like Lemon Verbena and Lavender Mint, Megan garnered international attention from big names like Urban Outfitters.
The Product
You Smell’s product range includes luxury soap bars with vibrant fragrances and witty packaging. The bars are designed to offer users a unique sensory experience with scents like Lemon Verbena and Lavender Mint. Additionally, the company offers paper soap, a portable version perfect for on-the-go use.
This paper soap, smaller than a packet of gum, is convenient for travel or impulse purchases. With an affordable price point, the bars retail for approximately $2.25, offering excellent profit margins for retailers.
Customers can purchase You Smell products online or through select retailers, including potential partnerships with big names like Urban Outfitters.
How It Went
The company’s position before Shark Tank
As a pre-venture company, You Smell has already gained international attention and interest from significant players like Urban Outfitters. Megan Cummins, the founder, has demonstrated her ability to generate buzz and interest in the brand, showcasing her entrepreneurial spirit and marketing savvy. The company’s primary source of funding is from the Shark Tank investment, providing them with essential capital for product development and expansion.
With promising profit margins and a unique product offering, You Smell is positioned for growth in the luxury soap market. The company’s structure likely involves Megan as the founder and primary decision-maker, possibly with advisors or consultants supporting her.
The Negotiations:
In the negotiations, Megan initially sought $55,000 for 20% equity in her company. While several sharks expressed interest, Mark Cuban and Robert Herjavec made competing offers. Mark offered $55,000 for 40%, emphasizing his track record of supporting entrepreneurs to success. Robert, on the other hand, also offered $55,000 but for 40% with the additional condition of receiving a dime per bar sold. Daymond John and Kevin O’Leary both opted out, citing concerns about the competitive market and the unproven nature of the brand.
In the end, Megan chose Robert’s offer of $55,000 for 20% with a $50,000 salary, valuing the additional financial support and guidance he promised. Despite the other sharks’ attempts to sway her decision with counteroffers, Megan felt confident in her choice and believed Robert would be an excellent business partner to help her navigate the challenges ahead.
