Furmansky And Budisies Case

Alex Furmansky, with Budsies, came into the shark tank seeking $100k for a five percent stake in the company. His product is part of the plush toy business where kid’s drawings are sent to his website and are then crafted into custom toys. The toys cost Alex $35 to make and are sold for about $69 in retail. He has been selling for 7 months and has sold 2,000 Budsies. His gross revenue is 94k and his gross margin is 39k. With the offer he is seeking, Alex is evaluating his company at 2 million dollars. The sharks do not think that he has enough cash flow to be asking for that much money for such a small stake in the company. He is not making a big enough profit on each of his toys and he does not have enough of a customer base. It was not disclosed
However, he is profiting about $34 per toy. In terms of character, Alex was very passionate about his product. He was fully invested in his company and that was his only job. The sharks liked this, which is why he received offers. The sharks had an issue with the price of his toy in terms of other plush toys, and his small customer base. He did not have a plan to elaborate past individual orders, which was a problem. Daymond John felt that his business evaluation was way too high. Daymond John offered him $100k for 40% of the business based off of how quickly he thought the business would grow. Daymond felt that with 10%, it would take him way to long to get his money back because of the small customer base and the small profit that was made on each toy. Kevin O’Leary agreed with Daymond, that with the $100k and 10% of the business, it would take far to long to make a profit or make his money back. O’Leary offered him $100k with a 50% stake in the company. With this pitch, O’Leary would plan to implement a few changes. With a 50% stake in the company, O’Leary would ask that Alex charge more per toy, in order to gain a larger profit. O’Leary would also use his connections to increase the customer base on a larger
Their company, Forus, is an athletic shoe company that is both fashionable and practical. The two men had multiple different factories and sold their shoes for different prices in different countries. The men approached the shark tank by telling their life story, and how they got to where they were today. Their characters were very driven and passionate toward their product, however some of the sharks had issues with them. The two had a lot on the line, as this was their full time job. One of them went to the law school, and the other had a different occupation that he gave up in order to pursue this company. The cash flow was not as high as the sharks would have liked to see – and a lot of this is based off of the competition in the shoe industry. Their credit was not disclosed, however based on the information given in the episode, it is safe to assume that they do not have the best credit. Their collateral was not mentioned either, but they both have degrees and gave up jobs in order to pursue this. Mark Cuban did not offer a pitch because he was already loyal to other shoe companies and Lori was not interested. Kevin O’Leary was also out. Robert Herjavec offered to invest contingent on whether or not Daymond would go in with him. This pitch was based off of the product and the past sales that Forus made, and the profit on each shoe. The shoes are made for $11-13, sold