Wise Pocket Products
Wise Pocket Products is a company started by a young entrepreneur in Bentonville, AR, that saw a need for stylish new storage solutions while on the go. Inspired by a cousin who kept her phone in her boot. When the entrepreneur tried it out, she found it terribly uncomfortable and, because she's watched Shark Tank since she was six years old, decided to create her own solution.
Wise Pocket Products has created a line of socks and leggings, all of which contain a hidden pocket inside large enough to carry modern cell phones as well as payment cards and house keys securely. These socks and leggings can be used while playing soccer, while rock clibing, or even dancing. The demonstration featured an entire dance troupe vigorously moving about, none of whom lost what was kept in their socks.
In addition to selling socks, Wise Pocket Products has a charitable side and intends to donate a pair of socks for each sold (not unlike Bombas).
Thus far, Wise Pocket Products has had (a little under) $16,000 in sales. Each sock costs $5.47 per unit to manufacture and is sold wholesale at $11 per item or $15 per item at retail.
The company is entirely funded by the entrepreneur with $10,000 in start up capital. $5,000 came from the young entrepreneur's personal savings and the other $5,000 from business pitches and competitions. Wise has no other outside investment.
If successful, the entrepreneur wants to use the money to streamline production as she is currently limited to just making just 100 units per month.
Making A Deal
When questioned about competition, the entrepreneur admitted that there is competition but that it is currently limited to pockets designed only to carry keys and the like, hinting that no one is currently making hidden pockets like hers secure enough to hold a phone.
Mr. Wonderful exits the deal early stating that he doesn't want to be in the sock business. Mark, likewise, exits, stating that, while he likes the idea, doesn't know anything about thread counts and it wouldn't be a good fit for him.
Lori questions whether the entrepreneur is capable of managing both school and a business. The entrepreneur, being pretty plucky, states that she actually finds it to be a confidence boost to go into high school with her own business.
Clearly, Lori liked the response because she and Daymond make an offer together after Daymond says that Bombas has now done $120,000,000 in sales and has donated 10,000,000 pairs of socks. They offer the desired $30,000 in exchange for 33.3% of the business, stating that they would like to find a manufacturer to license the product to.
The entrepreneur asks whether they might consider $35,000 for 25% equity instead and both Daymond and Lori accept.
By asking for a $5,000 more in investment in exchange for giving up 10% more equity than she had originally pitched, the entrepreneur protected the company's value and saw a bite of only $60,000 from the original value of Wise Pocket Products.