ZipString – String Toy
DEAL
EPISODE SUMMARY
🕓 Air Date: December 9, 2022
Asking For:
$100,000 for 10%
Investor:
Robert Herjavec, Kevin O'Leary (50/50)
Deal:
$100,000 for 20%
PRODUCT SUMMARY
ZipString is a high-speed, safe-to-touch toy that follows the user’s movements and performs tricks.
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Background Story
ZipString founders Austin Hillam and Stephen Fazio came up with the idea for their innovative toy after Stephen, passionate about electronics, saw a physics teacher demonstrate a benchtop string launcher. He transformed the concept into a handheld device that launched a string and, with input from Austin, turned it into a captivating toy. They gained massive exposure when Austin posted a video of the toy on social media, receiving over 20 million views and making the front page of Reddit. This sparked their journey into the toy industry.
The Product
ZipString is a unique and captivating toy that can reach speeds of around 35 miles per hour while remaining safe to the touch. Users can control ZipString by holding it upright and guiding it into a channel, causing it to emulate their movements.
The toy is designed for fun tricks and can glide around smooth objects effortlessly. ZipString is not only entertaining but also provides a visually engaging experience for users of all ages.
The product is available for purchase starting at $25, with plans to lower the price as they scale production. It works on the basis of a battery-powered mechanism, and the largest expense in its production is the battery.
The founders have successfully resolved their supply chain issues and have the capability to fulfill orders for 100,000 units, with plans to reduce the production cost to $5.87 per unit. Additionally, they have a verbal commitment from Walmart Canada to start selling ZipString, offering it at a more competitive price point.
How It Went
The company’s position before Shark Tank
ZipString faced initial supply chain challenges, which limited their sales despite gaining over 20 million views and national exposure through a successful Kickstarter campaign and collaboration with the comedy group Dude Perfect. Their total sales amounted to $277,000, and they’ve expanded to over 50 countries with more than 200 million views in total.
The company has partnerships with retailers like Walmart Canada and is actively working on expanding its distribution network. Funding primarily came from their successful Kickstarter campaign and early sales. They’ve indicated they can produce 100,000 units but are looking for additional investment to support scaling and lowering the production cost.
The Negotiations:
In the Shark Tank, ZipString founders Austin Hillam and Stephen Fazio initially sought $100,000 for 10% equity in their business. They received multiple offers from the Sharks. Kevin O’Leary and Robert Herjavec teamed up to make a joint offer of $100,000 for 20% equity, which the founders accepted.
However, Lori Greiner pointed out that the founders had previously been offered a deal at 9% equity, which they didn’t accept, leading to a higher equity stake in the final deal. Despite this, they embraced the opportunity to have two Sharks on board and agreed to the deal. O’Leary and Herjavec believed in the potential of ZipString as a new category of toy and were excited to help grow the business.
