The Definitive Guide to Business

How this 'Shark Tank'-backed bagel maker bagged a deal with Starbucks

Nick and Elyse Oleksak, co-owners of Bantam Bagels, with their son.
Source: Bantam Bagels
Nick and Elyse Oleksak, co-owners of Bantam Bagels, with their son.

Elyse Oleksak nixed her husband's idea to leave their secure finance jobs to open a tater-tot truck. But when he came to her with the idea to make bagel balls that have cream cheese stuffed inside? Oh, well, she knew that was genius.

How did she know? "There is something inside of your gut and you have a blind belief in yourself and your product," she said. "You cannot dive in unless you are so truly, 100 percent in belief in yourself and your product that the world needs your product."

And Oleksak just knew that the world needed to have bagel balls stuffed with cream cheese. Turns out, she was right.

Bantam Bagels
Source: Bantam Bagels

In just over four years, Nick and Elyse Oleksak, who met in college and are now married, have gone from inventing the bagel-ball recipe in their tiny New York apartment to an appearance on the hit show "Shark Tank" to launching their Bantam Bagels in all 7,700 corporate-owned Starbucks across the U.S.

"We can't believe how far we have come, and we can't believe how much we have accomplished," Elyse said. "But you just get so deep and you believe so much and you are just so eye-on-the-prize that you don't even think twice."

Believing in the bagel ball

Nick and Elyse, 32 and 31 respectively, graduated from Columbia University in 2006 and 2007 and went into finance. Nick worked at GFI as a corporate bond broker, and Elyse worked in investment management at Morgan Stanley. But they always had an underlying desire to launch their own business.

Both are originally from Massachusetts, but they were quick to adopt the classic New Yorker obsession with bagels when they moved to the Big Apple for college.

Nick says when he couldn't decide whether he wanted a savory or sweet bagel with cream cheese he would often get both. And while he always promised himself he would eat only one at a time, he always ended up eating both.

In May 2012, Nick woke up in the middle of the night with the idea of an individual-sized bagel bite already filled with cream cheese. It would give customers the pleasure of a bagel and cream cheese without the bloated bread belly.

He wrote the idea down in his phone and then called his wife from work the next day to share his midnight ruminations.

"I paused, like a hold-the-phone moment," Elyse said.

"There is something inside of your gut and you have a blind belief in yourself and your product." -Elyse Oleksak, co-owner, Bantam Bagels

The couple was instantly obsessed with the idea. "We ran home that night and made the first batch," she recalled. "The second we lit up from the idea, there was no turning back."

For the next couple of months, they came home from their corporate jobs in the evenings, aggressively Googled how to make bagels and tried out recipes. The dough would sit in the laundry closet overnight to rise properly.

At the same time, they were using their finance know-how to put together a business plan.

Hitting the "Shark Tank" jackpot

Nick and Elyse raised a friends-and-family round of financing to open the first Bantam Bagels shop on Bleecker Street in New York City's West Village.

Elyse left her job in June 2013 so that she could work around the clock to get the storefront open. Nick kept his corporate job until February 2015. The newly minted entrepreneurs were also newly minted parents, so they didn't want to lose the steady paycheck until they were sure Bantam Bagels would keep them afloat.

Longtime "Shark Tank" fans, the couple applied to be on the reality-pitch show and were accepted. They filmed in June 2014 and made a deal with Lori Greiner, who invested $275,000 for 25 percent equity of Bantam Bagels. The episode aired in January 2015 and changed everything for the couple.

"That was really the inflection point for us as a business," Nick said. "It's like everyone says, there is the 'Shark Tank' effect."

The Bantam Bagel website crashed the night of the show, a common foible for contestants, and the Saturday morning after the show aired, there was a line out the door of their downtown bakery shop starting at 6 a.m. It didn't even open until 9 a.m.

From a single storefront to 7,700 Starbucks stores

Three years ago, Bantam Bagels was making about 1,000 bagel balls a day. Today, it's making nearly 1 million bagel balls a week.

Despite the massive growth, the bagel balls are still made with the exact recipe that Nick and Elyse refined in their home kitchen back in 2012.

The explosive growth of Bantam Bagels is both a result of the couple's appearance on "Shark Tank" and a partnership with Starbucks, which was formally announced this week.

To get the deal, Nick and Elyse reached out to a regional New York City Starbucks director who wrote back to them enthusiastically. The Starbucks manager had not only seen Bantam Bagels on "Shark Tank," but had been to the store. The manager invited them to meet the team that coordinates brand partnerships for Starbucks.

Source: Bantam Bagels

"We sat down in the meeting room, and it was almost like a setup — it was so amazingly perfect from the beginning," Elyse said. "People were rounding the corner going, 'Oh my God! Bantam bagels! I love Bantam Bagels!' People were coming in asking for selfies."

After the first meeting, Starbucks agreed to test Bantam Bagels in three stores. Those three stores became 30. Now, the bagel balls are in more than 7,700 Starbucks, all of the company-owned stores in the U.S.

For Nick and Elyse, the last four years have been nonstop. Elyse was sending emails from the delivery room before their son was born. "We couldn't help ourselves!" she said.

But when they launched the business, it wasn't about creating a job. It was about fulfilling their dream.

"Your business is an extension of yourself," Elyse said. "You are not going to turn off a part of yourself and who you are and what you care about."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."