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Original Runner Company which develops Aisle Runners for weddings was on the Shark Tank seeking $250,000 for 15% of the company (implied valuation: $1.8 million). The company offers high end 50 foot, non-slip Aisle Runner and she wanted to go into the lower-end. The company’s sales last year were $550,000 and $800,000 the year prior. Julie Goldman pitched the product.
It costs her $25 and she sells to retail stores at $37.50 for the low-end aisle runners. Daymond John said her margin is not high enough. He wondered if someone could make a non-slip runner and compete with her and after some resistance got a straight answer from Goldman.
Robert Herjavec asked how is the company worth $1.8 million? Goldman felt that a 3-5x multiple on sales justified the valuation.
Kevin O’Leary thought she is playing in the high end so why go in the “toilet bowl” at the low end. Mark Cuban echoed O’Leary sentiment and said she is serving a high end niche, so why go down market?
Barbara Corcoran said she doesn’t need anybody here and that she is not in agreement with her strategy and so opted out. Mark Cuban said he didn’t like the strategy and opted out as well. Robert Herjavec didn’t think the business scaled and could be big and so also opted out followed by Daymond John.
Kevin O’Leary offered $250,000 for 51% so that he has control. He said she needs my guidance and needs to keep her focused on the high margin business. She countered at 15% and O’Leary said get out saying it wasn’t worth $1.8 million.
Goldman appeared to be difficult to work with according to many of the sharks. She felt the offer was completely unreasonable..
Check out how we analyzed Shark Tank investment data for seasons 1 and 2. We also highlighted that Mark Cuban has written the largest checks in season 2 and that Daymond John has invested the most money and that Barbara Corcoran has invested the most. And we’ve also discussed whether Shark Tank TV is realistic to the real world.