Rumpl
Rumpl is a company from Portland, OR, that makes a comfy new water proof camping blanket out of recycled plastic bottles. The entrepreneur demonstrates it repelling dirt and pet hair too. But it's not just designed to protect the people under it.
Apparently, 60% of the material that goes into a Rumpl blanket comes from plastic bottles. Additionally, 100% of the product's carbon footprint is offset.[1] And 1% of all profits are donated to environmental causes, so Rumpl is also trying to save the planet.
Currently, Rumple is sold online direct to consumer and through Amazon. Additionally, Rumpl is sold in physical REI retail locations. New guest shark Blake Mycoskie remarks at this stating that REI is actually where he bought his own Rumpl blanket. Surely this is headed toward a deal.
A Rumpl blanket costs $25 to manufacture and wholesales for $49-50 per unit. Consumers then pay $100 per blanket.
The business was started in 2013 and by the end of 2014, Rumpl had seen $450,000 in sales. In 2015 that rose to $950,000, $2,700,000 in 2016, and $5,300,000 in 2017. In the last two years Rumpl had made $8,800,000 in 2018 and then was down to $6,500,000 in 2019. The entrepreneur explained that the dip in sales was from losing just two large corporate accounts that represented $3,000,000 in sales. Rumpl is projected to make $8,000,000 in the current year.
Everything is looking pretty good for Rumpl until the sharks start pushing on various things that reveal themselves to be weaknesses. Blake had already pointed out that there was nothing unique about the Rumpl blanket and, when he asks about competitors, is told that Rumpl has about fifteen.
And when pushed about profits off of the sales, the entrepreneur reveals that Rumpl is expected to see between 5-6% in profit, or about $400,000 pre-tax.
Rumpl raised two seed rounds of capital for $1,000,000 and then did a Series A round to raise another $3,800,000 in capital in 2018. When pressed about how much money was in the bank, the entrepreneur revealed that Rumpl was sitting on $3,500,000.
Anyone who has watched Shark Tank should know where the deal went from here. Mark asked why the entrepreneur was even in the tank and the entrepreneur responded that it wasn't so much for the money as it was to form a partnership for sports licensing. This goes over with Mark like a ton of bricks, who states that with the money Rumpl has in the bank, he should have figured it out himself or just... you know... called the NBA. Daymond jumps in on this also, saying that the entrepreneur could have sent a full sales team to pitch the NBA. This also sends Mark out, who says that if the entrepreneur can't figure out sports licensing, then he can't help. But he also asks if the entrepreneur is actually there to make a deal. (Which is a good question...)
Water being wet and Kevin being Kevin, states that the entrepreneur has balls coming into the tank with a value on Rumpl that is over fifty times the cash flow of the business. But the entrepreneur calms him down by saying that, in order to form a partnership, he's totally down with doing a royalty. Naturally, Kevin wants to hear more.
The entrepreneur pitches the sharks on the idea of a $600,000 loan at 10% interest over two years. Additionally, he is willing to offer a 5% royalty on all revenue earned from sports licenses.
Daymond seems into the idea and offers a small revision: $600,000 as a loan at 10% over two years but also a 5% royalty on all revenue for those two years. Mark thinks Daymond is crazy but Daymond cites his experience with Sunstaches.[2] He says that he helped Sunstaches get licensing deals with Pokemon, Marvel, and with several sports.
Guest shark Blake Mycoskie doesn't want to be left out of the action though and asks Daymond if he would be willing to team up. He says that, if they worked together, he could work on the direct to consumer element and grow wholesale sales by 500%. But in order to get both sharks, they revise the deal to a $600,000 loan at 10% over two years plus that 5% royalty on revenue for the same period plus 4% equity.
Kevin goes a slightly different route, offering $600,000 in exchange for a royalty of $10 per unit until earning back $1,800,000 and that 4% equity since equity now seems to be on the table.
Lori takes this opportunity to drop out.
Maybe it was Kevin's offer, maybe it was Lori dropping out but Blake comes back with a revision, stating that he really does want more equity and raises the offer he and Daymond had made to everything stated but now also with 10% of the business.
Mark's entertained throughout and points out that the deals are slowly getting worse. The entrepreneur responds with a flat no to Blake and Daymond's offer. Instead, he counters directly to Blake with $600,000 back as a two year loan at 10% interest plus a 2.5% royalty for two years plus 4% equity.
Mr. Wonderful scoffs and asks whether this deal is also supposed to include Daymond because, as anyone should know, he'll need a lot more to snare two sharks. But the entrepreneur is pretty clear that this offer is just for Blake. Seeing he's not wanted, Daymond drops out.
The whole deal is hinged on Blake's response to the entrepreneur and Blake says that he wants... no he needs a 10% equity stake in the business because he's got to look out for his own time. Without 10%, Blake says that he can't see himself as being motivated enough to help out. But the entrepreneur won't budge and says he can't do a deal with those terms.
At this point, Mark was holding his face in his hands with a look that said he expected this outcome ever since he heard about the $3,500,000 in the bank. In a post-pitch sequence, the entrepreneur swore that he came into the tank looking to do a deal with Blake Mycoskie but that he was just too unhappy about the 10% equity ask. Whether to not that's the case is for the viewer to decide... Hdymacwtg0as
Notes
- ↑ The entrepreneur doesn't specify but these types of offsets are usually cash payments based on estimated carbon emissions to organisations that attempt to offset the damage through tree planting or some other kind of carbon-negative activity.
- ↑ Sunstaches is a deal Daymond made back in episode four of Season Six that made gag glasses and other novelty items.