Chirps Cricket Products
DEAL
EPISODE SUMMARY
🕓 Air Date: January 27, 2017
Asking For:
$100,000 for 7%
Investor:
Mark Cuban
Deal:
$100,000 for 15%
PRODUCT SUMMARY
Chirps is the first-ever cricket chip, aiming to make sustainable protein accessible by incorporating crickets into America's favorite snack, chips. Each chip contains one cricket, providing as much protein as an egg white with 30% less fat than regular potato chips.
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Background Story
Chirps, a revolutionary venture based in San Francisco, California, emerged from the innovative minds of co-founders Rose Wang and Laura D’Asaro, both former college roommates at Harvard. Their journey into the world of insect-based snacks began when Laura, studying abroad in Tanzania, encountered a local woman selling fried caterpillars. Astonishingly, the taste resembled lobster, sparking her curiosity about the untapped potential of insects as a sustainable and nutritious food source.
Simultaneously, Rose had her own insect-related revelation after trying a fried scorpion in China. Intrigued by the delicious taste and the global acceptance of insect consumption, she sent Laura an article on the subject, laying the foundation for their shared vision. The two friends, united by a passion for sustainability and healthy living, embarked on a mission to challenge preconceived notions around eating bugs and introduce this eco-friendly protein source to the American market.
Their academic backgrounds played a crucial role in shaping Chirps. Laura, an African-studies major, drew inspiration from the cultural acceptance of insect consumption in many countries, considering termites in Africa a delicacy. Rose, with her experiences abroad and exposure to diverse culinary practices, recognized the potential for insect-based foods to make a positive impact. Motivated by the belief that insects represent one of the most sustainable protein sources available, Rose and Laura developed Chirps, the first-ever cricket chip. Their goal was not merely to create a snack but to establish a gateway bug that could pave the way for broader acceptance of insects in various food products.
The Product
Chirps, the brainchild of Rose Wang and Laura D’Asaro, is a groundbreaking snack product that introduces sustainable protein into the mainstream through the innovative concept of cricket chips. These chips are not just a culinary novelty but a strategic and delicious way to make crickets, one of the most sustainable protein sources available, accessible to a broader audience.
Each Chirps chip is meticulously crafted to deliver a delightful taste reminiscent of a good corn chip, with the added benefit of a protein-packed crunch. The founders ingeniously include one cricket per chip, providing consumers with a novel and nutritious snack option. The flavor profile is enhanced by the cricket, which contributes a subtle nuttiness and umami depth to the overall experience.
Chirps chips come in various flavors, such as the well-received barbecue variant. Beyond taste, these chips are non-GMO, gluten-free, and all-natural, aligning with the founders’ commitment to healthy and sustainable eating. The product caters to individuals seeking a guilt-free and environmentally conscious snacking option.
Available for purchase, Chirps offers small snack sizes at $1.99 and larger bags at $3.99, making it an affordable and appealing choice for health-conscious consumers. With distribution in 73 airport stores, 20 natural-food stores, and partnerships with museums, zoos, aquariums, and theme parks, Chirps is poised to revolutionize the snack industry by blending culinary innovation with ecological responsibility.
How It Went
The company’s position before Shark Tank
As of the latest available information, Chirps has demonstrated robust performance and a promising position within the competitive snack industry. With an impressive sales projection of $200,000 for the current year and a bold forecast of $1.5 million for the upcoming year, the company has showcased remarkable growth and market acceptance. Chirps has strategically forged partnerships with significant distributors, securing placement in 73 airport stores and 20 natural-food stores. Notably, their innovative product has also found a niche in unconventional but high-visibility locations such as museums, zoos, aquariums, and theme parks. These partnerships with diverse outlets indicate not only the versatility of the product but also the potential for widespread adoption.
In terms of funding, the founders, Rose Wang and Laura D’Asaro, have pursued a bootstrap strategy, leveraging their success in pitch competitions to accumulate over $200,000. This approach has allowed them to maintain full ownership of the company, underscoring their commitment to Chirps’ vision and independence. Chirps’ customer base is diverse, encompassing health-conscious individuals, eco-friendly consumers, and those intrigued by novel food experiences. The founders’ dedication to sustainability and health aligns well with the preferences of this growing market segment.
The company’s current structure reflects a lean and agile operation, driven by the founders’ entrepreneurial spirit. Their successful pitch competitions and the “Shark Tank” deal have provided Chirps with not just funding but also strategic guidance and industry expertise from a seasoned investor like Mark Cuban. This positioning bodes well for the continued success and growth of Chirps as it pioneers sustainable protein snacks in the market.
The Negotiations:
The negotiation process for Chirps on “Shark Tank” was dynamic and ultimately fruitful, culminating in a deal with Mark Cuban. The co-founders, Rose Wang and Laura D’Asaro, initially sought $100,000 for a 7% equity stake in their innovative cricket chip business. Mark Cuban, known for his interest in sustainable products, quickly expressed enthusiasm for the mission and the potential of Chirps. Cuban proposed an offer to invest $100,000 but requested a higher equity stake of 20%, citing his strategic value and potential partnerships with other companies in his portfolio.
Lori Greiner, another Shark, exited the deal early in the negotiations, stating that she wasn’t setting it up for a counteroffer. Cuban encouraged the founders to either counter or decline outright, emphasizing the importance of making the deal worthwhile for him. In response, Rose and Laura proposed a counteroffer, suggesting $100,000 for a 15% equity stake. This negotiation tactic aimed to find a middle ground that would satisfy both parties. Cuban promptly accepted the counteroffer, sealing the deal at $100,000 for a 15% stake in Chirps.
The negotiation process showcased the founders’ ability to navigate the high-pressure environment of the “Shark Tank” and articulate their vision effectively. Mark Cuban’s investment not only brought much-needed capital but also positioned Chirps strategically with a well-established entrepreneur who shared their passion for sustainable products. The successful negotiation marked a pivotal moment for Chirps, propelling them forward with a powerful ally and the financial backing needed to expand their reach and impact in the snack industry.
