Soy-Yer-Dough
It was honestly news to your Stats Shark that the traditional Play-Doh brand play clay contains wheat. This is a problem because kids aren't exactly known for not putting things in their mouths. And this is a problem because, if one remembers this far back, everyone seemed to claim they were suffering from some kind of "wheat sensitivity."
But for people who actually have Celiac Disease, this could cause real issues. So Soy-Yer-Dough, a company from Bloomfield, IN, has invented a wheat free play clay that is safe for people which gluten issues.
Because this is the United States and everything has a patent, Soy-Yer-Dough has a provisional one, too.
All Soy-Yer-Dough product is currently manufactured at the entrepreneur's home which will be a problem since, so far, 8,000 units have been sold and a purchase order for 11,000 more just came in.
Play-Doh is apparently aware of this market because they contacted Soy-Yer-Dough about an acquisition. The entrepreneur turned them down, not because he doesn't like money but because he wants to build a company in his hometown. Also, the most that's been offered for the company is $500,000.
That's enough for Daymond, Kevin, and Robert who decide to band together and offer $300,000 together for 51% of the business. This would give the sharks a majority share in Soy-Yer-Dough but, probably unlike most other acquisition offers, the entrepreneur would maintain a substantial ownership position.
Also, despite the large equity bite the sharks took, their $175,000 in additional cash actually increased the value of the business by $88,235!
Update
According to a press release put out by something called the WestGate Crane Technology Park[1], the deal with the sharks fell through after Kevin O'Leary pushed hard to manufacture the product overseas. As the entrepreneur said in the pitch, his desire was to build a company in his hometown, which apparently is what he ended up doing.
Notes
- ↑ WestGate Crane Technology Park Press Release, July 27, 2016