This Shoe Fits! (Episode 2.8)
by Shark Tank TV Show on Thursday, May 19th, 2011 | 2 Comments
Fourth Guest: Dominique McClain Barteet, OneSole
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Dominique bought the same shoe in several colors a few years ago, and thought that there must be a better way. So she invented an innovative concept in shoes: one sole with many tops.
She was seeking $500,000 for a 20% stake, a pre-money valuation of $2,000,000.
As she pointed out, the concept of interchangeable tops is great for the travelling women – now she can pack one shoe with a bunch of tops and save a lot of space.
She invited Barbara to try them out, and she loved them. (Good thing, because her feet were killing her.)
The shoes sell retail from $70 to $85. The tops are separate and sell from $12 to $30.
She has had $20,000,000 in sales in the last four years, and is in 2,000 stores in 30 countries. Last year, sales were down at “only” $3.5 million. She has been on QVC six times. Her profits last year were over $1,000,000.
Her margins are good, and she has two utility patents and two design patents issued, with more on the way. She is trademarked and copyrighted in 98 countries.
She wants an investor to help her with sourcing. She is a pharmacist by profession, and started the business as a hobby. Now, she knows she needs a partner to take it to the next level. She is still running a pharmacy out of the shoe warehouse.
Robert pointed out that she was selling herself short. Many business owners with far less success exude in confidence, but she didn’t think of herself as a business person. She was under-confident, which is rare and quite refreshing.
She wants the funding to fill the big orders she already has – she needs it for inventory. She has lots of demand of which she can’t take advantage.
Robert suggested that all of the sharks go in for $100,000 each for a total of $500,000 for 50%. Interesting!Daymond said he didn’t need any partners, and would give her $500,000 for 35%.
Barbara said it would take to much of her time, and she was out.
Kevin O suggested $500,000 for 51%. He would immediately sell the company and make her rich. She didn’t want to do that.
Kevin H wanted to partner with Robert – $250,000 each for 50%.
She took Daymond’s offer and was ecstatic!
Our Analysis:
- Presentation: She was very poised and professional, befitting of the CEO of a $20,000,000 company, but also sold herself a little short.
- Business Strengths: She has a great concept, and great sales. She has good margins and good intellectual property protection. This appears to be a big winner.
- Business Weaknesses: She needs partners in sourcing (manufacturing) and distribution to take her business to an even larger market. It was very unusual for her not to be focusing on the business full-time.
- The Deal: She asked for $500,000 for 20%. Robert countered with $500,000 for 50% with all the other sharks. After a little more negotiating, she took Daymond’s offer of $500,000 for 35%, and we think it was the right thing to do.
- Sharks: They were very respectful, except of course for Robert, who we think was just trying to live down to his reputation.
Next Step Suggestions:
- Leverage Daymond’s fashion industry savvy to take the company global, and very large.
Lessons:
- At each stage of your business growth, seek new partners who can help you take it to the next level.
Follow-up:
- You can find out more at http://www.onesole.com/. The product line is very impressive, but the website needs to be redone.
(If you are interested in raising capital for your business, visit us at www.AngelNetwork.com)
what happened so far?
This woman is brilliant and part of her brilliance is that she\’s so nonchalant about her tremendous success.