'Shark Tank' judge Kevin O'Leary frightens entrepreneurs straight into Daniel Lubetzky's sharky arms
LOS ANGELES, CALIFORNIA: One of the biggest challenges for vegetarians and vegans is finding truly satisfying alternatives, as soy-based meats often fail to fully satisfy the palate. Additionally, it might be challenging for someone who follows a strict vegetarian diet to feel included while dining with friends at establishments like sushi bars and only being able to order a small portion of the menu.
After experiencing a similar dilemma, Zoya Biglary, the inventor of FYSH Foods, made the decision to develop a tasty fish substitute that would provide a truly vegetarian sushi experience that went beyond avocado rolls. In Season 16, Episode 4 of ABC's 'Shark Tank', Zoya walked the stage and served the inquisitive Sharks delectable vegetarian sushi made with a special combination of veggies, marine algae, and extra nutrients.
FYSH Foods sales figures upset Sharks
Zoya walked into the Tank with her life partner, Alix Traeger, seeking $150K for 10% of their company. Being a strictly B2B business, they revealed that they have been strictly shipping to restaurants and caterers.
Last year, FYSH Foods generated $50,000 in sales, which failed to impress the Sharks. Despite selling their products at retail prices ranging from $10 to $13 and wholesale prices between $20 and $40, they have struggled to make a significant impact on their sales.
With the pair being a name in the content creation industry and over 3M followers in the bag, the Sharks expected FYSH Foods to have banked on that and make more money. However, the founders were yet to tap into a market where they could get into a space and become the next big thing.
Sharks find FYSH Foods not investible
Given the numbers shared by Zoya and Alix, Kevin O'Leary and Robert Herjavec both decided not to invest. While Mark Cuban didn't mind FYSH Foods being a wholesale business, he expressed concerns about the difficulty of scaling it in the future.
The frozen food industry is, quite literally, a challenging one. Several issues with frozen goods present difficulties for both investors and business owners alike. Mark didn't think it was justifiable to invest in the business and chose to sit out. With two big competitors in the market, FYSH Foods vouched to be different and 100% authentic.
Kevin O'Leary bullies FYSH Foods entrepreneurs into taking Daniel Lubetzky's sharky offer
Daniel Lubetzky definitely loved the product but believes frozen is a tough space. However, he offered $150K for 40% of their business. The potential for direct-to-consumer development is enormous, with 3M followers! Leveraging that engaged audience could help propel the company forward.
We'll see if they take advantage of this chance shortly! The main challenge is that they aren't converting them. Sales and marketing are therefore equally important. If a Shark promises to give you 60 cents for every dollar they make you give, you’ll need significant internal support and guidance to overcome their poor sales. They’re in desperate need of this deal to turn things around.
We believe this holds for many items in their market. There’s potential if they can get on the right shelves, but the founders felt that giving away 40% of the business would be like shooting themselves in the foot. Kevin jumped in to scare the duo, warning them that if they don’t take Daniel’s deal, they could end up "living shack by the river" in their old age, regretting this moment.
Mark, however, backed the duo and encouraged them to not give away such a huge chunk. Daniel agreed to come down to 35%, while Zoya countered him with 25%. After a lot of negotiation and a lot of scaring them away by Kevin, Zoya and her partner agreed to seal the deal at $150k for 30%.
'Shark Tank' Season 16 airs on Fridays on ABC at 8 PM ET.
For those who miss the episode, it will be available on demand the following day and on Hulu. Additionally, viewers can explore past seasons and episodes on Amazon Prime Video and iTunes.
