CurlMix
CurlMix is a health and beauty supply company from Chicago, IL, that makes products specifically designed for curly hair. Their primary product is a gel made from flaxseed oils that they claim helps to create bounce and volume "for the rest of the week" as well as helping to style the hair.
When shown before and after photographs, Robert claimed that he couldn't tell the difference. However, your Stats Shark could see that the after photo had more defined curls and less frizz.
The entrepreneurs state that thousands of women make their own flaxseed gel but that it only lasts for a few days without freezing it. The entrepreneurs claim that they got their start making CurlMix in their own kitchens.
CurlMix retails for $25 retail and costs $3 per unit to produce. Year to date, they state that they have made $400,000 in sales and expect to reach $1,000,000 by the end of the year, projecting $180,000 in profits if they do.
Violating the First Rule of Shark Tank, the entrepreneurs claim that while their main competitor is Divacurl, the hair business is a $100,000,000 a year business (that they no doubt believe they can peel a portion off of).
Mark is immediately out.
The entrepreneurs respond to Robert that they intend to stay entirely online to preserve their margins, to which Kevin says they have to because the companies that control the retail shelf space guard it jealously and follows Robert out.
Lori is the next to go out, stating that she doesn't know the space. Guest shark Alli Webb, of the Drybar, follows Lori out because she sees it as a very crowded space.
Robert says that he likes CurlMix's margins but sees more marketing as the only way forward. While he says he hasn't previously invested in the space and see's a lot of risk, he's willing to make an offer but that it has to be "sharky" to take all these factors into account. He offer's the entrepreneurs request $400,000 in return for 20% instead of the entrepreneur's offered 10%.[1]
The entrepreneurs try to respond with a 15% counter-offer but Robert has no interest and sticks to 20% because of the risks that he sees in the deal. The entrepreneurs worry about the value Robert's offer puts on the company ($2,000,000 versus $4,000,000) and state that they've already reduced their valuation to come into the tank in the first place but Robbert appears unmoved.
In the end, the entrepreneurs decline Robert's offer and walk away without a deal.
This deal aired on Episode 10.14.
Notes