Simple mixer that makes pure nut milk wows ‘Shark Tank’ — but one red flag sends judges running
ABC's 'Shark Tank' is a safe haven for entrepreneurs who not only require funds for their businesses but also valuable guidance. While, for the most part, the businesses with good valuation and profit margins end up impressing judges, there was one instance that left everyone surprised. In this scenario, the business owners valued their business at $10 million but still failed to convince even a single judge.
Entrepreneurs Alicia Long and Dane Turk pitched their company, Nutr, seeking $500,000 for a 5% stake. Their device was a mixer-grinder designed to extract pure nut milk from cashews, almonds, and other nuts, with optional flavor powders like strawberry, chocolate, and matcha. The sharks enjoyed tasting the milk, with guest shark Daniel Lubetzky noting, "The store brands, you're tasting sugar. This, you taste purely the cashews." Despite the positive reception, the high valuation raised expectations for massive sales, which were not quite met, as per Market Realist.
Long shared that Nutr had achieved $793,000 in sales the previous year and had already made $2 million year-to-date at the time of filming, putting them on track to reach $6 million for the year. Their success was partly driven by influencer marketing, which helped raise brand awareness. However, the entrepreneurs admitted to spending over $1 million on advertising. They initially claimed to be entirely bootstrapped but later disclosed that they had received $250,000 from angel investors, which raised questions about their financial transparency. Lori Greiner declined, saying such products aren't widely used and citing her own unused milk frother at home.
Overall, the founders appeared to lack a clear understanding of the numbers and financial details of their business, a factor that likely discouraged several sharks from investing. Greiner was the first to decline, expressing skepticism about consumer demand for such products and sharing her own experience of rarely using her milk frother at home. Mark Cuban also passed on the deal, citing a conflict of interest, as he was already invested in a competing brand in the same sector. The combination of high spending, unclear financials, and niche market concerns made the pitch less appealing to the investors.
Mr. Wonderful, aka Kevin O'Leary and Daymond John, both decided that Nutr's $500,000 valuation for a 5% stake was too high to justify an investment. O'Leary mentioned that if the entrepreneurs had asked for $100,000 instead, "I would have made a deal and tried to make it go big." This left Lubetzky as the only shark still considering a potential deal, though he also had concerns about the company's high valuation. He asked Long and Turk what their best offer would be.
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Long responded that they were willing to give up 7.5% of the company, along with 2% in advisory shares, for the $500,000 investment. Despite the adjustment, this proposal still fell short of Lubetzky's expectations, and ultimately, no offer was made, leaving the entrepreneurs without a deal. Following their episode, Nutr made a notable environmental commitment: the company pledged to plant a tree for every machine sold, as per Shark Tank Blog. Demonstrating the impact of this initiative, Nutr reported that they had planted over 35,000 trees in 2022 alone, emphasizing their focus on sustainability alongside their business growth.
