TaDah! Foods
TaDah! Foods is a company from Washington DC that makes a line of Middle Eastern frozen snack foods.
One line that TaDah! Foods produces is based on falafel street wraps that the entrepreneur claims is better than frozen bean burritos. They are generally vegetarian and chickpea-based but the company also offers a vegan option. Two of the flavors listed were "Lemon Sweet & Sour" and "Sweet & Spicy Hominy". The company also offers a line of "poppers" that are flavored as "Original Hummus" and "Harissa Hummus".
According to the entrepreneur, all of the TaDah! Foods products are "ready to heat and eat."
Guest shark and founder of Kind, Daniel Lubetzky, states that he found the taste of the samples given to be "very fresh." The entrepreneur responds that he bought it off the shelf at a supermarket to demonstrate and has no idea when they were produced. It's claimed that TaDah! Foods' products are in the top ten of all frozen foods.
The street wraps retail for $3.99 per item while a bag of popper retails for $4.99. Both products cost just $1.09 to produce. The entrepreneur says that 25% of all distributed profits go to support non-profit organizations.
In terms of sales, the company has earned $8,200,000 over the course of its lifetime but... it's not all good news. Three years ago, the company earned $2,300,000, followed by $1,700,000 two years ago and just $1,000,000 in the previous year. In fact, in the prior year, the company actually lost $200,000 on the $1,000,000 it earned. The entrepreneur claims that this was caused by problems with his co-packer declaring bankruptcy. He predicts earning only $1,000,000 for the year in which this deal aired.
In terms of investment, TaDah! Foods has only done a friends and family round for $300,000 but has given away 75% of the equity. Originally, 25% of the equity was supposed to be given to non-profit organizations the entrepreneur wanted to support and 50% was to be distributed to investors but it ended up all distributed to shareholders to mitigate against the $445,000 in liabilities the company currently has.
Making A Deal
Lori drops out first stating simply that she believes that other sharks (Daniel Lubetzky...?) can help accelerate the business faster. Robert says that he doesn't like the structure of the business and, likewise, is out. Kevin O'Leary, of all people, stated that he believed the cap table of the company was too complicated and that the deal wasn't for him.
This left only guest shark Daniel Lubetzky and Mark Cuban left to make offers.
Daniel stated that he thought the company was a mess but made two offers. The first would be $300,000 for 20% equity in the business with the equity presumably being shared out from among the existing shareholders. The second offer would be $500,000 for 25% of the business but some of this money would be put toward buying out some of the existing investors.
The entrepreneur seems to take the second deal but counters, asking for an additional $500,000 in credit (likely to fund orders and whatnot). Daniel says tha he'd likely give any credit necessary but will not make it part of the deal.
Mark wonders aloud whether it's even fair to buy out existing investors. And he's willing to make credit part of the offer, suggesting $300,000 for 20% equity plus $500,000 in credit might get the job done.
The entrepreneur asks if the sharks might get together on TaDah! Foods but both Daniel and Mark seem intent on going alone. As such, the entrepreneur attempt to counter Daniel at $500,000 for 20% of the business but Daniel is not having any of it. Finally, the entrepreneur accepts Daniel's offer at 25% equity.
This deal with Daniel Lubetzky took $1,000,000 (or a third) off the total value of the company but TaDah! Foods also got $200,000 more than was originally asked for and there will undoubtedly be some reorganization of the cap table happening if this deal actually goes through. Also, based on your Stats Shark's observations of when Kind entered the market, Daniel Lubetzky will most likely bring that value and more back to the company when it comes to finding shelf (or freezer) space in supermarkets.