Fronting the Fridge (Episode 2.4)
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Fronting the Fridge (Episode 2.4)

 

In the fourth show, we have some home decorations, a novelty product, some magic weight loss beauty aids, and some dazzling decals.
 
Find out who was funded and who left with just some good advice.
 
First Guest: Jan Augenstein, Fridge Front
She works in real estate and rehabs homes. She came up with the idea for the magnetic refrigerator skins when she lived in military base housing. They can also be used on many other appliances. They are instant decorations at $100 or so. Sounded like a great idea!
 
Her brother has invested a lot in the project – $250,000 – and she feels obligated to be a success and pay him back. She would be “totally heartbroken” if she isn’t successful.
 
She came in looking for $100,000 for a 30% stake, a pre-money valuation of $233,333, or just a little less than her brother has already invested.
 
Got a patent in 2005, did $40,000 in sales on an investment in Sky Mall. They didn’t make money because of a poor relationship with a supplier. She was at their mercy for a while.
 
In 2008, Rachael Ray found her and featured her products, but the servers crashed when the orders started coming in so she apparently didn’t sell a thing. Then she was challenged again when her supplier went bankrupt! Wow, she had one challenge after another. Hmmm…
 
She has some inventory remaining.
 
Kevin O was out because he wants a company, not a single product. Robert thought it was too small, Daymond couldn’t see how her could help, and they were out.
 
Barbara liked that it was a “cheap ass way to doll up a fridge”. She would put in half, but only if another shark would partner with her. Kevin H said to focus on selling what she had and said he would put up $50,000 with Barbara, for a combination of 50% of the company.
 
She took the deal!
 
Our Analysis:
  •  Presentation: She was a little nervous, but seemed to readily have the answers.
  • Business Strengths: The patent is about the biggest strength I see. Market response was pretty good, but not outstanding.
  • Business Weaknesses:. She has faced challenge after challenge, many because of her inexperience in bringing a product to market. She needs a stronger team.
  • The Deal: She asked for $100,000 for 30%. She got $100,000 for 50%. Good deal!
  • Sharks: They weren’t very “sharky” for this lady. They were actually very courteous and respectful. That was cool.
Next Step Suggestions:
  • Focus of limiting the designs and selling what you have. Let the “design your own skin” concept be a follow-on, Phase II idea.  
Lessons:
  • Get the right people on your team to start. Big mistakes early on can quickly destroy a company.
  • Focus on selling what you have. Getting to breakeven is huge!
Followup:
  • You can find out more at www.fridgefronts.com. The website says that “new designs are being added daily!”   We think the site could use a facelift. 

(If you are interested in raising capital for your business, visit us at www.AngelNetwork.com




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