Beyond Sushi
Beyond Sushi is a sushi format restaurant that replicates everything people like about sushi, just without the fish. Beyond Sushi is a vegan sushi restaurant that imitates their meats and tries to create an authentic experience.
One roll at one of their location costs approximately $1.50 to produce and sells for up to $7.50. They project that each dinner customer is worth $22 in revenue. They currently have six locations on the East Coast, all of which are served by a single commercial kitchen.
In the previous year, Beyond Sushi saw a $272,000 loss on sales of $4,000,000 though they claim their "bigger" locations can make $2,000,000 per year. The entrepreneurs invested $160,000 of their own money to keep it going through the losses.
Two years ago, Beyond Sushi made a $600,000 profit on just $2,400,000 in sales.
By the end of the year, the company projects to earn $300,000 in profits on sales of $5,600,000.
Making a Deal
The entrepreneurs state that they are looking for $1,500,000 in total in order to expand their concept to the West Coast. In return, the sharks will receive a 5% stake in their East Coast operations and a 25% stake in the West Coast branch.
Daymond is the first shark to exit, claiming that he doesn't know the business. Mr. Wonderful is quick to follow, with his usual complaint that he doesn't like the value on offer.
Guest shark Matt Higgins takes issue with the idea that the primary entrepreneur will be dividing his time between the east and west coasts whereas the deal is structure for Matt to want him on the West Coast all of the time.
Lori thinks that the concept will actually do better on the West Coast. With Lori's interest, Matt looks to team up and they make an offer for $1,500,000 in total in exchange for 15% of the East Coast and 30% of the West Coast operations.
This deal aired on Episode 10.03.
Running the Numbers
This deal was tricky to score for your resident Stats Shark because it is in essence two deals. For all intents and purposes, it's two different equity amounts invested into two different companies: Beyond Sushi East and Beyond Sushi West.
How does one value the bite on a deal like this?
Here's how it was done on Stats For Sharks. First, we needed to figure out how much money was going to be divided into each entity. For the sake of argument, 5% is 1/5 of 25%. So, to keep it proportional, it was decided that $300,000 was allocated to Beyond Sushi East and $1,200,000 was invested in Beyond Sushi West. This gave the entities a starting value of $6,000,000 and $4,800,000 respectively.
Using this as a starting point, we ran the numbers like we usually do. Taking 15% of Beyond Sushi East for the same $300,000 represents a bite of $2,000,000 off the original value. And taking 30% instead of 25% bit $800,000 off the value.
Ironically, this doesn't change the values in the charts in terms of amounts invested but it does figure into bite calculation and it is reflected by scoring this not as one but as two different deals. So... if you're keeping score at home, this may be why our charts and graphs have an extra deal.