Vegan pork rinds anyone?
On Sunday's episode of "Shark Tank" on ABC, vegan pork rinds company Snacklins caught the attention of many of the Sharks.
"They're made with real ingredients that a 6-year-old can pronounce: mushrooms, onions and yuca," Samy Kobrosly, founder of Snacklins said during the episode. (Yuca is a root vegetable, similar to a potato.)
A 1-ounce bag of Snacklins is 80 calories, about half the amount of regular pork rinds, which impressed the Sharks.
"I like the lightness," Shark Barbara Corcoran said while trying the Snacklins. "It makes me feel like I'm eating something healthy."
"I must say, the first bite tasted like paper, and now I've had my fourth, I'm starting to dig it," Kevin O'Leary said. "And you know what I really like? I'm only eating 80 calories in a whole bag."
Shark Lori Greiner added, "that's what I like!"
Kobrosly initially asked the Sharks for a $250,000 investment in return for a 2.5% stake in the business, a $10 million valuation, which shocked the Sharks.
In response, Corcoran called Kobrosly a "cheapskate," while Sharks Rohan Oza and O'Leary challenged Kobrosly's thinking.
"This is the sportiest valuation I've seen in a while," Oza said on the show.
"A $10 million valuation! I hope you have some sales, Samy," added O'Leary.
Kobrosly told the investors he only owns 30% of the company — he gave a 10% stake to each original employee, which Cuban called "awesome," and angel investors and family members also have a stake.
Kobrosly said Snacklins sold $200,000 in product in 2018, and aimed to finish 2019 with $2 million in sales.
"We've grown 10-fold in the past year, selling in about 850 stores nationwide. We started off in about 36 stores a year-and-a-half ago," Kobrosly told the Sharks. "From mom-and-pops, to national chains such as Whole Foods, Walmart and 7/11.
"When I had a meeting with 7/11, my baby was born the night beforehand. Four hours later, I jumped on a plane and I went to Dallas, and I met with the heads of 7/11. I'll do anything I have to do."
Each bag of Snacklins sells for $1.99 to $2.29 and it costs 90 cents to make, said Kobrosly.
Kobrosly told the sharks that he built his own factory for Snacklins, the cost of which raised concern from almost every Shark, except one.
"They're wrong," Cuban said, responding to the other investors' doubts. He compared Snacklins to one of his other investments: Alyssa's Cookies.
"I talk about Alyssa's Cookies all the time," Cuban said. "It started, the guy was living out of his car, had no money and he came to me. Now, six years later, we'll do $20 million in sales, and the better part is, we'll do $8 million or $9 million in profits that'll be distributed to me! We're killing it. One of the things I fought [the Alyssa's Cookies founder] on originally was the factory — I was wrong, he was right. He was the only one who could do the process he invented."
Cuban didn't mind Snacklin's valuation, but was concerned about the stake offered in return for an investment. He was also worried that Kobrosly only had 30% of the company and wanted to be "fair."
But Kobrosly wanted Cuban on his team.
"I think a strategic partner like you is what I set this up for," Kobrosly told Cuban on the episode. "I used to own 100% of nothing. I am living the American dream. I am a Muslim, first generation American, who is now pitching a vegan pork rind on 'Shark Tank.'"
Cuban offered Kobrosly $250,000 in return for a 5% stake plus 5% in advisory shares. Kobrosly accepted.
"I cannot believe that I just made a deal with the Mark Cuban," Kobrosly said. "He can help us get there and really show Snacklins is an approachable snack."
Disclosure: CNBC owns the exclusive off-network cable rights to ABC's "Shark Tank."
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