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Sharks Discover Recipe Rights AFTER Offering Investment! | Shark Tank AUS

Sharks Discover Recipe Rights AFTER Offering Investment! | Shark Tank AUS
first into the

tank

tonight is a young man from Sydney with a tasty solution to a dietary problem I'm incredibly proud of my business and so I'm really confident the

Shark

s are gonna be abiding hi my name's Alex Houseman I'm the founder of over the MU coconut milk ice cream from 28 and I'm from Sydney I'm seeking an

investment

of two hundred and fifty thousand dollars in exchange for 8% equity of the business now it looks like you've all had a long day and you might need something sweet so why don't you come up to the van and my lovely marketing Pooh bar will serve you some coconut milk ice cracks choice today Doc's choice thank gun when can I go and of course that is pretty damn good can I have a caramel enjoy wonderful thank you yeah thank you welcome enjoy oh my god oh my god so thank you very much Eleanor our marketing poobah we've developed a product which is absolutely dairy-free it's also gluten free it's massively vegan but the critical element as I hope you can attest is that it tastes absolutely delicious Alex she can pretty much say anything you like I mean I mean good to hear good to hear yes I got I first came up with the idea for over the MU about two years ago I was sitting on the couch and I was watching Game of Thrones with my girlfriend she was eating ice cream straight from the tub and having a great time just as you are right now I on the other hand have nothing I'm lactose intolerant and so when it...
sharks discover recipe rights after offering investment shark tank aus
comes to enjoying ice cream on the couch I'm left out in the cold so considering that the Australian ice cream industry racked up sales of 1.1 billion dollars last year I knew there was a business opportunity here so 20 months ago I got my first batch of stock from my manufacturer I loaded up my parents car and I went door knocking thanks Steve well done more should do that well done well done Alan it's been a journey within a month I had 15 stockists food now we're just short of 300 independent grocers across all states of Australia lactose intolerance is officially the most common food intolerance in Australia milk alternative sales in Australia last year totaled 157 million dollars and six percent growth the business proposition that I'm bringing today and the business proposition of over the MU dairy-free coconut milk ice cream is to sell our wonderful ice cream to the same people who are already buying soy and almond milk but we can't do it alone and this is why I'm here and this is where the

Shark

s come in thanks for your time great this is good yeah really good it's really good as so Alex that's 250,000 for 8 percent so you're valuing your business at 3.1 to 5 million correct good if you won't run a business before not know so tell us how tough the first year in business has been I don't think anyone who hasn't started a business doesn't realize the bootstrapping the hours the pain you go through and you you up to...
sharks discover recipe rights after offering investment shark tank aus
your second year in business now aren't you absolutely tell us about it so the first thing I did was I move moved home so yeah my parents sorry feeling a bit emotional here my parents had just been really supportive sorry I don't know why I'm getting so emotional about this but it's been a journey Joe that's embarrassing it's not actually we've all been through it sorry yeah just a bit it's all coming up I suppose it's a really lonely journey but pushed on because I believed and everything and um yeah really problem now that was hard but to admit that he's a very very very positive thing hmm appreciate face so probably got to get into the hard facts now yeah I really want to get a bit more excited and somehow relate it to the immense evaluation you put on this business yeah sure yeah so we're already the market leader of the coconut milk ice cream segment I'd approach calls last year the sales processes I suppose begun since February this year we've been trialing and selected Woolworths stores and they would like to put us into five hundred and fifty stores Wow so our projections for calendar seventeen are a total sales of 1.8 million and what would your profit be on the one point eight million three point five percent net profit which is around seventy thousand seven zero thousand yes it's a three years from now we're looking at turning over three million dollars resulting in a take home of five hundred thousand...
sharks discover recipe rights after offering investment shark tank aus
the problem is right now those your net profits scheduled to be seventy thousand bucks and you've come here with a with a valuation over three million bucks so in every estimation that's pretty adventurous right that would be theoretically with the coals on board and with an export wing as well you believe you're going to go from one point eight to three million bucks and revenue is that what you're saying yep five years from now we're looking at expanding the product line so going beyond ice cream anything that can't currently contains dairy can potentially be replicated as a dairy-free alternative the ice cream category as you know is huge what you've done is create your own categories in a big category which is great but the the valuation is really out there right because truly Woolworths and Coles they change their mind all the time it's part of their business so you might be in there but if you don't sell a minimum of five six seven products per store you're gone okay but the product was great I really like you and I think that you've got that determination I really look for in the partner so I'm gonna make you an offer but because you've asked for $250,000 the offer I'm going to give you is I will give you two hundred fifty thousand for 49% have you done oh yeah I have yep okay where you tell me what you tell me what number did you come up with state I beat up over look at have you shot through the numbers to you...
and incorrectly but that because the numbers are correct this man it's a good deal Steve I can tell you Janine's maths I actually agree with and I think you're being a bit generous the numbers I've done are actually quite reasonable but you didn't try the caramel did you ID hid them if you try the caramel you pee well then here then you read to make it open okay really appreciate the offer engineer it is a it is too low Oh Alex I'll give you an offer okay 250,000 bucks for 25% we 5% it's pretty sharp there's no pond-scum flavor my offer I'm not a bottom-feeder you can't add up then give them a cake later another bottom feeder so so while they're thinking about that you do you earn the

recipe

right when the

shark

s tasted Alex's delicious lactose free coconut milk ice cream they started circling I mean I will give you 250 thousand for 49% it is so low all right Alex I'll give you an offer two hundred fifty thousand bucks for 25% but Steve may have bitten too soon do you learn the

recipe

right I know well I have exclusivity with my manufacturer for our all of our formulations in perpetuity but so you can't take that

recipe

and take it to a factory overseas and supply Ben and Jerry's in the US for example Kenya no okay all right all right let's understand what you're talking about here right so you have a great business here a great growing business that someone else owns intellectual property for how certain...
is your contract of supply is a price set there's a price it every six months what what actually happens there we have a price change every six months and do they get to set the price or do you they would set the price so when you actually do do three million bucks in calendar year whatever they go wow that's a great business guess what prices go up 20% what happens then it happens we would we would have to move okay Alex I'm gonna withdraw my offer okay I should have actually asked that question thank you Andy might you need a whole new set of serious advice here because you need to own or have a massive amount of control over your intellectual property or the pricing that the owner provides without that ownership all right I'm out Ohama I'll take no further part this alex' you okay I'm out good luck this is an

investment

for me I think to get you where you need to go Alex you need a million bucks or more I'm sorry I'm out thanks a lot Andrew I love your brand and I think you're on your entrepreneurial journey but I feel a vulnerability because of your supply so for that reason I'm out okay thanks a lot my pleasure so four

shark

s are out just one

shark

left I'm gonna make you an offer yeah okay son want to come on a journey with you but I've got a price in the risk of this issue around your IP 250,000 for 40% of your company as I said over the moon I think it's the best tasting ice cream in Australia we agree we are...
the market leader really appreciate your offer Glen based on the evaluation I can't accept your offer have you a counteroffer boy that's how business works you know there's a counter offer any counteroffer that I could make it's just too far for Glen to jump you came in for a percent it's a long way off forty percent but I mean what would your counteroffer be if you made one it would be two hundred fifty thousand four fifteen and fifteen percent right so that's as high as you can go are you ready Glen you ready to write the check we're still in very separate positions in fact we're now it's not even the same house we're not in the same street we may be in the same suburbs that's about it sorry right I can't I can't counter okay good luck thanks for your time guys and great product see you see a little beautiful thing love the ice cream hate the valuation love the ice cream hate the valuation wow that was an emotional roller coaster in there absolutely yes exciting and really flattering and you know great great to be receiving an offer really unfortunate we couldn't really hope they weren't sharing the same vision every time I see this product in Woolies or Cole's okay what you could it have been thing I'm looking for businesses that we can scale up I have to understand the industry they're playing in because then I think I can add value and I love to help businesses grow and develop so that they compete...
in the industry they're playing you