First Saturday Lime – Eco-Friendly Insect Repellent
DEAL
EPISODE SUMMARY
🕓 Air Date: April 10, 2020
Asking For:
$100,000 for 10%
Investor:
Kevin O'Leary
Deal:
$100,000 for 25%
PRODUCT SUMMARY
First Saturday Lime is an eco-friendly insect repellent designed to safely repel insects around homes, gardens, and plants.
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Background Story
First Saturday Lime is presented by Jessica Jacobs, along with Zac McDaniel, his wife Jana, and their children Zara and Jennings. The founders, based in Okarche, Oklahoma, come from three generations of family farming and have a strong background in the limestone industry.
The idea for First Saturday Lime originated with their father, who, working with universities and co-ops, developed a proprietary formula. After his passing, Jana and Zac took over the farm, expanded the company, and made it sustainable. They built a factory and have experienced significant growth.
The Product
First Saturday Lime is an innovative insect repellent that utilizes a proprietary formula, with citric acid as the active ingredient. The product is eco-friendly and safe for children, pets, and plants. It is designed for easy application – users can spread it around the exterior of their homes or sprinkle it on plants, gardens, or surfaces.
The once-a-month application, as indicated by the name, makes it a convenient and effective solution for keeping pests at bay. The founders emphasize the safety of the product, assuring that it poses no harm even if touched or ingested by pets or children.
The formula acts as both an insect repellent and an antimicrobial for odor-causing bacteria and algae. The product is available in a 20-pound bag priced at $19.99, with a production cost of $1.60, providing a substantial profit margin.
Customers can purchase the product online, where 80% of their sales currently occur, while the remaining 20% comes from retail. The founders highlight the potential of repeat customers due to the once-a-month application schedule, fostering a connection with users who can share their experiences and results online.
How It Went
The company’s position before Shark Tank
First Saturday Lime has shown promising growth, projecting $350,000 in sales for the current year, with an expected increase to $600,000 based on recent sales rates. Their actual sales for the year stand at $150,000, with a strong online presence accounting for 80% of their sales. The company has secured vendor agreements with larger distributors, indicating a strategic approach to scaling the business.
The founders reveal a solid profit margin, with a production cost of $1.60 for a product sold at $19.99. Despite the relatively low current sales volume, they express confidence in the product’s potential and share plans to negotiate lower shipping costs as their volume increases.
The Negotiations:
The negotiation process involved a lively discussion among the Sharks. Mark Cuban and Robert Herjavec both express their concerns about the challenges of scaling the business and educating consumers about the product. Eventually, both Sharks opt out of the deal.
Lori Greiner and Daniel Lubetzky express interest in the product’s safety and effectiveness, with Lori making an offer of $100,000 for 33.3% equity. The founders counter, seeking a lower equity stake, leading to negotiations about the terms of the deal. Kevin O’Leary joins the deal, expressing enthusiasm for the product and the potential profitability of the venture.
Ultimately, the deal is sealed with Kevin at $100,000 for 25% equity, with the founders expressing gratitude for the opportunity. The negotiation highlights the Sharks’ concerns about the educational aspect of marketing the product and the founders’ ability to scale the business effectively. Ultimately, the deal reflects a compromise on equity, with the Sharks providing not only funding but also expertise to help the company grow.
