Ka-Pop! is a new snack made from an "ancient" grain called sorghum. The main advantages to this grain appear to be that it is GMO free, and allergin free but not, as the entrepreneur claims, "flavor free!"
Ka-Pop! flavors include rosemary garlic, salt & vinegar, vegan cheddar & garlic, and olive oil & sea salt. The entrepreneur makes the claim that Ka-Pop! is flavored only with "cold pressed oil" but, given the flavors above, that seems hard to square. Kevin, however, compliments the flavors stating that, within the gluten-free space, Ka-Pop! are the first that he's liked. Guest shark Rohan Oza agrees.
In terms of sales, Ka-Pop! grossed only $150,000 in the previous year. By the end of the current year though, the entrepreneur projects earning as much as $1,200,000. The month in which the deal was filmed was stated to be on track to earn $70,000 alone.
The entrepreneur behind Ka-Pop! had formerly been with Goldman Sachs before joining General Mills to launch the first nation-wide gluten-free brand.
In terms of investment, Ka-Pop! has the head of Whole Foods' grocery and the head of Pacific Brands on as investors. The entrepreneur, himself, invested $50,000 into starting the company while outside investors put in $943,000 in pre-revenue money on a convertible note. Ka-Pop! has just started another fundraising round with the original investors in an attempt to raise another $1,000,000.
Despite this, the entrepreneur would like to add a shark to his cap table becuase he thinks that having on of them would "add fuel to a fire."
Unfortunately, while Barbara states that she thinks the entrepreneur is a "hell of a salesman" she doesn't think she can do anything for the business and drops out. Mark accuses the entrepreneur of overselling and never mentioning what he thought the future challeneges might be.
Like Barbara, Rohan seems to respect the entrepreneur as a salesman, even going so far as to say that he'd hire him but that he finds Ka-Pop! to be too early and that he believes the margins will just get eaten up as the business expands. Also like Barbara, Lori says she's unsure where she can help out even though she likes the product and the market.
In the end, all that was left was Kevin, who states that he doesn't have an "ancient grains" product in his portfolio" but that he's worried about being dilluted as the Ka-Pop! continues to fundraise. To mitigate against that, Kevin offers $350,000 for 17.5% equity, no doubt to have something to dillute as the company raises more money.
But the entrepreneur says that he would like to have a $5,000,000 valuation for the company at the end of the round and counters at $500,000 for 10% equity instead. The valuation isn't Kevin's main concern though and the entrepreneur says that he can go as low as a $4,000,000 valuation to make a deal. Kevin says that keeping the company valued at $4,000,000 is 100% more than he'd like to invest. And, because the entrepreneur and Mr. Wonderful couldn't come to an understanding, Ka-Pop! left the tank without a deal