Unshrinkit Gets an Investment on Shark Tank
Mark Cuban never has to worry about shrinking his clothes, thanks to his latest Shark Tank investment Unshrinkit, a startup founded out of Harvard Business School in early 2014.
Cofounders Desiree Stolar and Nate Barbera made their case for capital Friday on the ABC reality show, asking the Sharks for $150,000 in exchange for 10 percent equity in their company, whose patent-pending liquid solution helps customers unshrink their wool clothing back to its original size.
Of the five celebrity investors, three tried to strike a deal. Boston-based millionaire Kevin O’Leary bit first, offering $150,000 for a 33.3 percent equity stake in Unshrinkit. FUBU founder Daymond John also agreed to $150,000, but for a 25 percent stake—contingent on licensing the product.
When the owner of the Dallas Mavericks countered with $150,000 for a 15 percent stake, Stolar and Barbera didn’t even consider the other offers on the table.
“With all the back and forth, we didn’t expect him to step in, but were glad when he did,” Stolar says. “After the fact, we thought about whether we accepted Mark’s deal too fast, and if we should have negotiated more with the other Sharks. But we were happy with Mark’s deal, so we took it.”
— Shark Tank (@ABCSharkTank) November 14, 2015
Unshrinkit became the latest Boston startup in Cuban’s portfolio, joining the likes of HourlyNerd, a freelance marketplace for MBAs, and mobile app marketplace Apptopia.
“We really like Mark as a person and an investor,” Stolar adds. “He prioritizes the founders and their execution of a good idea. We also respect his entrepreneurial spirit and his passion for sales. We signed a term sheet with him, although the deal has not closed yet.”
Stolar announced Unshrinkit was appearing on Shark Tank on stage at last month’s MassChallenge Awards, where they presented as one of the top 26 finalists. Although they didn’t win the competition, Stolar was able to share with hundreds of attendees a secret she’d been keeping since March.
“I practiced that pitch for MassChallenge hundreds of times and rewrote it at least 12,” Stolar says. “But then I trashed it, so I could announce we were going on Shark Tank.”
The two first pitched Unshrinkit to producers when they visited Harvard Business School in April 2014. At the time, Barbera acknowledged that they weren’t yet ready for the show, but would love the opportunity to contact producers when they were. About a year later, they reached out and, within three months, were in California filming.
“Basically, from March through June, we were owned by Shark Tank,” Stolar says. “But you know that at any day, on any week, you could get an email that says, ‘Thank you for your interest, but we’re not interested in going forward.”
The founders were still full-time students, trying to complete HBS cases while preparing for filming. They watched “a lot” of Shark Tank episodes to determine how negotiations tend to play out and what questions they might be asked. And it worked:
— CPA Keisha (@CpaKeisha) November 14, 2015
“You never know what the Sharks are going to ask,” Stolar says, “and you never know how many hundreds of thousands of people are going to visit your website.”
The Unshrinkit team recently revamped their website and has been working “around the clock” for the last two weeks to ensure it wouldn’t crash after the show aired. Since July, they have also reconfigured their formula, redesigned their packaging to make it “more retail ready,” and onboarded Sourcentra in Framingham, Mass., which is handling Unshrinkit’s bottling and shipping.
“I’m embarrassed to talk about where we were in September 2014,” Stolar says. “We didn’t have a rate sheet, a sense for what was the best way to engage with wholesale and retailers, or press packaging. It’s now all ready. Bring it on.”
National retailers have already expressed interest in selling Unshrinkit, according to the founders, but a majority was waiting to see how the investors would react to the product on Shark Tank. Customers can currently purchase Unshrinkit for $11.99 on Amazon and at select retailers.
“It was stress and pressure the whole way,” Barbera says, “We had a lot fun with it, too, though. The worst thing that could happen is that we didn’t get a deal, but at least we were still on national TV.”