Cave Shake is a company from, Los Angeles, CA, that is bringing to market a diet shake that works on the same principle as a the Paleo Diet. The shake is intended as a meal replacement or a snack. Like most paleo-keto diet drinks, the Cave Shake is made for high fat, low carbohydrate diets to "trick your body into burning fat."
The shakes come in three different flavors: vanilla, chocolate, and coffee. All the flavors are sweetened with stevia and contain 480 calories per drink.
Both of the entrepreneurs had personal experiences with the paleo-keto food category that they claimed were beneficial for them. One entrepreneur had been a "hardcore" athlete involved in sports such a ski racing and found that the diet helped him recover faster and ache less. The other entrepreneur related how she had been in an auto collision and was left with pain after the fact that only a paleo-keto type diet made go away.
The shakes average cost to manufacture is $1.86 per unit and sells for $7.99 at retail. In the previous year, Cave Shake grossed $270,000 in sales. Year to date, the company has grossed $182,000 and project that by the end of the year they might make $540,000. They later stated that they expected to end the year with $750,000 in sales when pre-orders were factored in.
Currently the product is selling in Souther California health good stores and online.
Cave Shake partnered with an incubator called LA Libations, a Southern California drink brand incubator, and Coca-Cola as strategic partners to bring the Cave Shake to market. As part of this partnership, LA Libations received 15% equity in the business. Additionally, LA Libations receives 10% on sales over $10,000 that they bring in though no sales have been made yet.
This deal aired on Episode 10.04.
Making A Deal
Robert didn't like the flavor at all, probably because of the sweetener stevia which the entrepreneurs claim repulses one out of one hundred people. Needless to say, he was out of the deal. Mark questioned why the offer was for less equity than LA Libations received but for money.
New guest shark Charles Barkley offered the $250,000 in capital to the entrepreneurs but for 20% instead of the original 10%. This represented a hefty bite of $1,250,000 from the original value or 50%. The entrepreneurs asked of Charles would come down to 18% but he held firm. After some consideration, no doubt due to the radical effect this would have on the value of their business, they accepted because... it's Charles Barkley.
- The entrepreneurs stated that by the end of the year they project to earn "double". Whether that applied to the amount of money they had made thus far in the current year ($182,000) or double the amount earned the prior year ($270,000) is unclear but the Stats Shark presumes that they're speaking about doubling the prior year's sales.
- No doubt Mark knew exactly why LA Libations received the equity percentage that they did and that was because of their role as an incubator, a company that helps smaller companies with support and logistics as well as often providing an office or warehouse space that can be used. Questioning the entrepreneurs about this no doubt makes for good television but does not reflect knowledge that Mark no doubt already had.