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Shark Tank Review: Episode 8 of Season 1

By Edited Aug 8, 2015 0 0

In the 8th episode of the first season of Shark Tank four business ideas were presented. Out of the four businesses presented only two were able to walk away with an investment from the Sharks.

The businesses featured in this episode are: 

  • NoteHall

  • Treasure Chest Pets

  • Throx

  • Washed Up Hollywood

The investors or the "Sharks" featured in this episode are:

  • Robert Herjavec

  • Kevin O'Leary

  • Barbara Corcoran

  • Daymond John

  • Kevin Harrington

Shark Tank Episode Review
Credit: ABC Shark Tank


D.J. Stephan and Sean Conway have created an online service where college students can buy and sell notes. They are seeking an investment of $90,000 in exchange for a 10% stake in their company NoteHall.

D.J. and Sean recognize that there are some college students that take really good notes and there are students who take horrible notes. They also recognize that college students can encounter issues that can prevent them from attending classes. As a result, D.J. and Sean created a website where students who take good notes can earn money by selling them to students who need them.

The way that the business works is students upload notes to the website. Then students who need notes or study guides purchase and download from the site. NoteHall receives a 60% commission from each sale and the student who uploaded the notes will receive the remaining 40%.

Below are some of the facts that are gathered from the questioning from the investors.

  • The system of buying and selling notes is legal.

  • There is a 100% guarantee if the student is not satisfied with the notes.

  • They have made about $30,000 since they launched their service 9 months ago.

  • Currently, they service 24 universities including Arizona State and Kansas State.

  • They want to use the investment to get more customers.

  • They feel like they can get 85,000 users.

The investors seem to be very interested in the company, however they feel that the company is way overvalued. Based on the equity being offered and the investment that they are seeking the company is valued at $900,000 ($90,000 divided by .10 or 10 percent). Herjavec and O'Leary want to know why they are valuing the company that high. Sean feels like the company will make be able to reach $24 million in sales within 4 years.

Haggerty bows out because he believes that the company is too much of a start-up. Daymond thinks that they have a good business idea, but it is not the type of business he is looking to invest in.

O'Leary offer them $90K in exchange for a 51% interest in the company. Barbara, who feels like the business is a "home run", offers $90K for a 50% stake in the business. Sean and D.J, who do not want to give up too much equity in their business, are only willing to give up 15% of their company. O'Leary reduces is equity request to 35% for the same amount of money. Barbara, who really wants the deal, offers $90,000 for 25% of company.

Herjavec, who highlights his experience in internet businesses, offers $115,000 for 35%. O'Leary, who will not back down, matches Herjavec's offer. Barbara sweetens her offer by giving Sean and D.J an option to buy her out in 6 months plus 20% interest on her money.  Unexpectedly, Herjavec and O'Leary join forces and offer $90,000 for 25%. Herjavec, believes that they need experience and that O'Leary along with himself bring that to the table.

Ultimately, Sean and D.J. decide to take Barbara's deal primarily because they would not have to give up too much equity.

After the deal was made, O'Leary, who is obviously disappointed by getting beat out by Barbara, leaves the stage to talk with Sean and D.J. O'Leary tells them that they just made a deal with a real estate agent and that they made a huge mistake. 

The Note Hall Story

Treasure Chest Pets

Lisa Lloyd has started a company called Treasure Chest Pets. She is looking an investment of $150,000 in exchange for 20% of her company.

Her company sells a line of toy stuffed animals that double as organizers for kids. On the surface the toys look like stuffed animals, however they have secret compartments where kids can store things. She also reveals that her idea is patented as well.

The investors, who seem somewhat interested in her business, begin to ask her more about her sales, cost of production, current distribution, and plan.

Lisa Lloyd reveals to the investors that:

  • The toy retails for $19.99 and it costs $4.75 to manufacture.

  • The toys is being sold in 200 stores mainly small boutiques.

  • She was able to sell over 600 pieces in a local mall.

  • She tested different price points between $19 and $30. She concluded that $19.99 is best price point to sell her products.

  • She has had over $100K in sales over the last year.

  • She currently has several hard orders that she has not fulfilled yet.

  • She is not in any big box stores because she does not have the capital to fulfill the orders.

  • She has about 1100 pieces in stock.

  • She will use the investment to fulfill orders.

After the question and answer session, O'Leary decides not to invest because he believes that she is in an extremely competitive space. In addition to that, he thinks that she will have a hard time with distribution. Haggerty, bows out because he thinks that he product is too niche.

Barbara is willing to invest $50,000 if Lloyd is able to convince another investor to put up the rest of the money. Daymond offers $150,000 for 60% of the business and invites Barbara to join in on the deal. Herjavec offers Lloyd a line of credit of $150,000 plus interest and does not want any equity in the business. He believes that she just needs cash.

Daymond contends that cash is not the only obstacle for Lloyd. He contends that she will need help with manufacturing, billing, and distribution. He adds that his deal includes access to his entire back office.

Lloyd decides to partner with Daymond and Barbara because she think their offer is in the best interest of her company. 

Treasure Chest Pets Founder On AfterShark

Washed Up Hollywood

Danon Beres has started a high end belt company called Washed Up Hollywood. He is seeking $500,000 in exchange for a 25% equity stake in his company.

Danon, whose father designed custom high end belts specifically for celebrities, has decided to create a line of belts that are high end but at a price point that is accessible to anyone. Danon says that his belts are designed with the celebrity in mind yet it is affordable to everyone.

The investors seem to like his belt designs and begin to inquire about the company specifics like sales and distribution.

 Below are a couple of things that Danon reveals about his company.

  • His belts are sold in about 300 stores in 12 countries including the US and Canada

  • His belts are sold in major department stores like Nordstrom.

  • The company generated about $435,000 in sales last year.

  • The company was able to make a profit of $50,000 from sales last year.

  • The price point for his belt is from $55 to $100.

  • He has sold over 10,000 belts over the last year.

  • Danon has invested about $120,000 of his own money in the business.

The investors like his business and think that his belt designs are great but they cannot grasp the valuation of the company. Danon, based on his investment request and equity offer, his valuing the company at $2 million. The investors think that his valuation is way out of line based on his current sales and profit.

Danon contends that company can grow into a $32 million operation within 5 years. O'Leary believes that the company is only worth $650,000 which is 1.5 times his current sales. O'Leary also feels like the investment is a huge risk considering the fact that Danon is the CEO and Lead Designer. Essentially, if something happens to Dannon, then the company is dead.

Daymond believes that the price point for his belts are outrageous. In addition to that, he does not think that Danon can effectively differentiate his brand from any other belts simply because of the visibility of a belt buckle or belt. He also does not believe that Danon's company sold over 10,000 units. Danon says that he can definitely back up his claim.

Herjavec tells Danon that it would be like gambling if he were to give him $500,000. O'Leary adds that there is no upside to that type of investment. Herjavec decides to bow out. Haggerty follows suit and backs out because he thinks the deal too risky. Barbara, O'Leary, and Daymond all are out because they feel that the company is way overvalued.

Washed Up Hollywood Founder On AfterShark


Edwin Heaven has started a company called Throx which sells packages of socks in sets of 3. He is seeking an investment of $50,000 for 25% ownership in his company.

Heaven feels that his idea is the cure for missing socks. He contends that many people, who normally buy socks in pairs, often lose one of the socks in the pair. At this point, they would have to purchase a new pair of socks. With Throx if people were to lose one of their socks, then they would have at least one replacement.

After demonstrating his product, the investors proceed to ask him about his business.

From the questioning Edwin reveals that: 

  • He has had $38,000 in sales for the past year.

  • He has sold over 8500 units this year

  • He projects that he will sell over 80,000 units in the next year.

  • He cannot patent his idea which means that any sock maker can duplicate the idea.

O'Leary immediately backs out because he believes that larger and more established sock makers can easily duplicate his idea. Haggerty is out because he thinks that the product is simply a novelty item. Similar to Haggerty, Barbara thinks that his product makes a great Christmas gift, but does not see customers buying the product throughout the year and for that reason she is out.

Herjavec thinks that Edwin can make money with the product, however, the business is too small for any type of investment. Daymond agrees with Herjavec's assessment and they are both out.

Throx On Donny Deutsch's The Big Idea

Shark Tales: How I Turned $1,000 into a Billion Dollar Business
Amazon Price: $16.00 $8.74 Buy Now
(price as of Aug 8, 2015)

Wrap Up Of Episode 8

Best Idea

NoteHall - In my opinon an excellent business model that serves a huge market. This business has huge growth potential.

Worst Idea

Throx - The idea was not necessarily the worst business idea it is just that the business is matched up against some major competitors in the industry. While it is a good idea the growth potential of the business is limited.

Best Quote

"If you actually started to take market share from the established sock makers they can crush you like the vampire cockaroach you are in 2 seconds."  - Kevin O'Leary

Full Episode On Amazon

Week 8
Amazon Price: $1.99 Buy Now
(price as of Aug 8, 2015)

Here are more articles that you  may enjoy about the Shark Tank.

Shark Tank Review: Episode 1 of Season 1

Shark Tank Review: Episode 2 of Season 1

Shark Tank Review: Episode 3 of Season 1

Shark Tank Review: Episode 4 of Season 1

Shark Tank Review: Episode 5 of Season 1

Shark Tank Review: Episode 6 of Season 1

Shark Tank Review: Episode 7 of Season 1

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More Shark Tank Terminology That You Should Know

Even More Shark Tank Terminology That Your Should Know



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