- On "Shark Tank," Neil Hoffman pitches the Jewish alternative to The Elf on the Shelf – The Mensch on a Bench.
- Hoffman asks for $150,000 in exchange for a 10% stake in his company.
- The first 30 minutes didn't go as planned, and Hoffman says he had two back-up plans in place if he got a bad deal.
Every entrepreneur has their "lightbulb" moment – and for Neal Hoffman, founder of The Mensch on a Bench, his happened while shopping during the holidays with his son.
"We're Jewish," Hoffman said. "It was Christmastime. He asked for an Elf on the Shelf and I just made a joke, and I was like, 'No man, you get a Mensch on a Bench.'"
Hoffman touts The Mensch on a Bench as the Jewish alternative to The Elf on the Shelf. Consumers get a 12-inch plush toy of Moshe the Mensch, as well as a hardcover book that tells the character's story.
"I went and had a prototype made....and then I said, 'You know what, we're going to bring this to other families'... and went out to Kickstarter, and that was the beginning of Mensch on a Bench."
After earning $100,000 in sales, the former Hasbro executive took his start-up to "Shark Tank," seeking $150,000 in exchange for a 10% stake in his company. Hoffman said going on "Shark Tank" had been part of the plan since day one, seeing it as an opportunity to gain publicity to grow a national brand.
But much to Hoffman's surprise, the experience didn't go as expected.
"My first 30 minutes in the Tank were a disaster. I ended up pulling it together, bringing the Sharks in … you have this dream that you're going to walk in, they'll be fighting over you, and yeah that happened at the end, but it didn't happen in the beginning."
The Sharks were skeptical about Hoffman's plans for company growth, specifically plans for an app.
"I don't really see this as an investment," Kevin O'Leary said. "I don't see Mensch on a Bench being a $10 million toy. I really don't. And look, I come from your space. I worked at Mattel for a while. What you've done is remarkable – just getting a plush into retail. But I'm not buying into the big, ya know, Menschie the Reindeer, apps and all that stuff."
Lori Greiner and Robert Herjavec saw potential in the company and offered Hoffman $150,000 for a 30% stake.
"I would love to be a part of the deal, but there is a lot at risk, I mean I think you know that," Herjavec said. "I think it's a fair valuation assuming nothing changes. I think we haven't really articulated how you're going to grow the brand."
Hoffman was prepared to navigate potential rough seas in the tank. "I had two emergency plans in place if I got a bad deal," Hoffman said. "One of them was I would guarantee their payback and that I would put my house up for sale to pay them back, if necessary...it seems spontaneous, but I had actually thought about it, and my wife was on board." The second "emergency plan" was to get Daymond John on the phone to sweet-talk him into a deal.
Luckily, neither scenarios ended up happening.
The year after "Shark Tank," The Mensch on a Bench earned $900,000 in sales. Six years later, Hoffman is still launching new items for the Jewish community, such as the "Mitzvah Moose," "Ask Bubbe - The Talking Grandma Doll," and "Ask Papa – The Talking Grandpa Doll."
Hoffman said the biggest lesson he learned from "Shark Tank" is that passion and drive can take you far. "When you think about it, I have a business for 2% of the population for six weeks of the year. There's no way I should be in business, but somehow we've managed to do this and create it!"
Catch Hoffman pitch The Mensch on a Bench on "Shark Tank" Sunday at 7P ET on CNBC.