'Fake pitch': 'Shark Tank' slammed after guest shark Tony Xu recognizes Wildwonder founder from school
LOS ANGELES, CALIFORNIA: Drinks created from herbs and medicinal plants are beneficial, but they rarely taste good. Rosa Li, the founder of Wildwonder, a range of effervescent probiotic beverages derived from super herbs, challenged this misconception. The startup recently appeared on Season 14 of 'Shark Tank,' when it landed a deal with Guest Shark Tony Xu. Even though the pitch went well down for Rosa, viewers are having difficulty believing it was genuine after witnessing Tony know her from school.
Raising more than $2 million was a significant accomplishment for the company, but it is trying to raise more funds and bring on a Shark. The beverage brand is already available at Sprouts Farmers Market and all Whole Foods Market locations in Northern California. All of this occurred right as the pandemic began. As the firm grew, it began to concentrate on enhancing packaging, offering new products, and expanding its presence in retail outlets outside of Northern California. Rosa made an excellent pitch, and it's evident that her career in private equity has aided her. She gave the Sharks samples, and the majority of them appreciated the flavor and branding of the product. Rosa entered the tank hoping to raise $500,000 for a 5% stock investment, despite the fact that she was not profitable.
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Rosa Li, an entrepreneur, entered the Tank looking for $500k in exchange for 5% of her firm. Shark Mark Cuban thinks it strange that every can of her product contains 5gm of prebiotic fibers. Wildwonder takes a much more holistic approach to gut health. She says that most brands, such as Kombucha, have an acquired fermented flavor, which does not serve the average client. Wildwonder is ready to extend the market with no fermented flavor and healthier soda alternatives. As a result, their product has just 35 calories per can, 90 percent less sugar than soda, and 50 percent less sugar than Kombucha. She also states that their products have no artificial ingredients and are organically certified. Meanwhile, DoorDash CEO Tony was eager to point out that they do, in fact, attend business school together, albeit not in the same class. Rosa created Wildwonder in 2020, but Covid completely destroyed her revenue stream. Her products were stocked by over a hundred retailers, including the original Whole Foods, in less than a year.
Rosa responded to Shark Kevin O'Leary's query regarding her company's high value by stating that they had produced over $1.4 million in sales as of today. Right now, they are hoping for $2.5 million in sales. They are still not profitable at this size. She is currently concentrating on expanding her profit margins. The goods cost $0.90 to create and retail for $3.49, and she hopes to reduce her costs to $0.70 in a year. The firm raised $2.1 million last year and has investors who are putting money in as they go. Last year, they raised money on SAFE (Simple Agreement for Future Equity) at a $6 million cap.
Kevin, although liking the product, was dissatisfied with the equity offered and hence backed out. Shark Lori Greiner believes that the risk in the business does not equal the gain in a large market like beverage, therefore she also retracts. Mark says he likes the product, but given the amount of money Wildwonder will have to keep obtaining and the fact that entrepreneurs try to strike a balance between how much they want to keep and how much they can earn, the equity provided is difficult for Mark to accept. Shark Barbara Corcoran, who has a bad track record of investing in beverage firms, has chosen to stay out as well.
Tony agrees with the other Sharks that the product is in a category where a certain level of success is required before it has a shot. Tony, who would not ordinarily invest in a beverage firm, offers $500k for 9% since he knows building capital-efficient enterprises in a highly sequential manner to have a shot at success. Rosa explained that the firm raised a pre-money SAFE with a $6 million cap in the last round, so she would like to meet Tony's offer but cannot go below that valuation. Tony's offer is countered with $500k for a 6% interest with 3% advisory shares so that her valuation is not affected, but he still gets his ask. Tony quickly agrees!
Fans on Reddit were quick to label the pitch as 'fake' given the circumstances that the founder of the company and its new investor already knew each other. One Redditor wrote, "Yet another pre-arrange cosplay shark tank segment. Watch each of the other sharks give bad fake acting of why they're not interested, then she and Tony are practically reading cue cards as they "make" a deal. I'd like nice tasting beverage with 90% less sugar and (presumably) none of the common sugar substitutes. But I wouldn't want the funk of fermented kombucha or drinking pre-post biotics, which I don't think have been validated for health benefits anyway." Another person wrote, "Here we go again. The GUEST investor went to school with the presentor. I am giving up on this show. Sadly, the product might be decent as it is low calorie. She sounds well off too."
Given how quick Tony was to recognize Rosa made viewers think, "I might have bought it was a coincidence if she had pointed out that they went to school together because everyone who was at Stanford at that time probably knows Tony Xu was there. But for him to recognize her seems a little too coincidental." Calling the deal pre-determined, a person wrote, "Watch the the terrible acting by all the Sharks as the bow out (because it's a pre-canned Tony deal) Then watch her and Tony's even worse acting as they "negotiate" a deal within seconds. Note his careful wording that he's not claiming to be surprised she's there. It's just a way of disclosing the prior relationship." Considering it as an ad opportunity for Wildwonder, a viewer wrote, "Fake pitch. Just an ad opportunity. Tony's probably involved with the company already. Mark Burnett def made a nice chuck of change from this ad."
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC. Missed an episode? Been wanting to catch up? Episodes can also be viewed the next day on demand and on Hulu. Not just that, you can also watch old seasons and episodes on Amazon Prime Video and iTunes.
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