Barbara Corcoran offers $50K for ‘Shark Tank’ contestant's cake business — but she has 2 big conditions
'Shark Tank' investors are usually impressed by gigantic sales figures, but sometimes they take risks and invest their money into small-scale businesses as well. During an episode of 'Shark Tank' Season 6, budding entrepreneur Kim Nelson pitched her cake-baking venture, Daisy Cakes, in front of the esteemed Sharks, Barbara Corcoran, Kevin O’Leary, Kevin Harrington, Daymond John, and Robert Herjavec. Nelson was seeking $50,000 for 25% of her company. Corcoran initially thought it was too small to invest in, but decided to support her anyway.
While pitching her business, Nelson said, "My Daisy Cakes are the best cakes that you will ever put in your mouth. They are my family recipes. They are made from scratch. We don't use any preservatives, artificial flavors in our cakes, and the best part, we deliver them to you. I can't wait for you to taste them." Soon after, Nelson made the Sharks try out her cake, and they loved it. "Wow," Herjavec exclaimed.
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Later on, Nelson revealed that she sold these cakes online for $44.50. When O'Leary asked Nelson about the sales of her company, she said, "We've just finished our first year, and our sales have been great with people in the south." Then, O'Leary interrupted Nelson mid-sentence and asked her, "Give me a number." In her response, Nelson shared, "Three months of October, November, and December of last year, $27,000 in three months."
Nelson informed the sharks that she and her mother would drive to holiday shows to sell their cakes. She added that she would love to get on a shopping network to reach a wider audience. O'Leary chimed in, saying, "Let's say I put you on the shopping network. I can do that, and I get you a $100,000 orders for cakes. What are you gonna do? Kill your mother to make them? How are you going to do that?" In her response, Nelson said, "Well, we would have to probably do a little different way of baking." Nelson didn't have a clear answer in her head, but she believed that she could make 5,000 cakes in 30 days.
Eventually, the Sharks came down to business with O'Leary being the first one to back out. Shortly afterward, Harrington, John, and Herjavec also dropped out as they felt that the company was just not investable yet. On the other hand, Corcoran saw some potential in Daisy Cakes. “I like you very much. I think it’s too small a business, quite honestly, to invest in. However, I noticed when you passed your delicious cake around, every guy here ate more than 50%,” Corcoran told Nelson, according to Market Realist. Corcoran offered a deal to Nelson, but she had two conditions. The first was that it would be a royalty deal worth $50,000 for a dollar per cake until she gets her money back, and second, Nelson's mother would have to be an integral part of the operations, as she's the one who would be driving around the country to sell cakes at trade shows. Nelson accepted the deal.
