OA Foods is a company from Miami, FL, that is trying to solve a common problem with pasta: it's made from wheat. For those that suffer from celiac, the gluten within wheat can cause digestive and other health problems. But that doesn't mean they don't like pasta. It just means they shouldn't eat it.
OA Foods has solved this problem by creating a new pasta called "Palmini", a pasta made from the hearts of palm. This pasta, doesn't have any celiac or gluten issues and should be safe for everyone to eat. This heart of palm-based pasta took two years to develop and the machine that is required to make it is currently patent pending.
Unfortunately for the entrepreneur, the sharks were less than enthusiastic about it, stating that it didn't taste like pasta to them.
Fortunately for the entrepreneur, there is more to the business than just the pasta. There is also a quinoa product. And, on this, there are some actual numbers. Since the quinoa product began selling, it has grossed $400,000 in sales. In fact, in the three months prior to the deal filming, OA Foods sold 2,000 units of quinoa for $50,000 in gross revenue.
Making A Deal
The idea of a gluten free pasta and the sales of the quinoa were enough for Mark and Lori to team up together to make an offer of $300,000 for a combined 25% of equity, with the equity being split down the middle. This represented 15% more than had originally been on offer and a bite of over 50% from the value the entrepreneur entered the tank with.
Still, it's not often an entrepreneur walks away with two sharks as partners, much less one who seems to follow ever fad diet and the other who has direct access to a powerful demonstrative sales channel. And, let's face it, (not to channel Mr. Wonderful too much here) but $400,000 in gross revenue hardly justified a $3,000,000 valuation. So maybe Mark & Lori didn't take so much of a bite as much as put it into a reasonable place.