Mitch Allen came into
Shark Tank Hire Santa Update
- Entrepreneurs: Mitch Allen
- Business: Santas for hire
- Ask: $200,000 for 10% equity
- Result: $200,000 for 50% equity until money back, then 10% equity in perpetuity
- Sharks: Barbara Corcoran
Since Hire Santa is basically a holiday entertainment business that involves deploying a Santa to a number of different types of events, Mitch did his best to explain the different scenarios and pricing structures that his company uses. He told the sharks that individual visits from a Santa could cost about $300, while longer-term holiday season bundles could involve larger payments on an hourly scale. These hourly rates can generally be around $50 to $60 per hour and partnerships can involve retail stores, malls, and other similar venues.
With some solid sales numbers from the previous years, sharks were certainly interested. Mitch told the sharks that his company was on pace to easily do over $1 million in revenue in the current year, while potentially doubling in the following year if growth expectations continue at their current rate. This comment from Mitch certainly caught the attention of all five sharks.
The pitch seemed to be going well early on, but some bad news awaited Mitch and his company. The first shark was about to drop out of the negotiations and it was going to be Lori Greiner, simply because she didn’t believe a consistent revenue stream was possible with Hire Santa. Mark Cuban, Barbara Corcoran, and Daymond John quickly dropped out for similar reasons, leaving only Kevin O’Leary remaining to potentially make a deal.
Kevin decided to offer $200,000 for 50% equity. Mitch realized that he wanted to make a counteroffer to Kevin’s original offer. After thinking about counter-offering with a royalty deal, Mitch quickly realized that Barbara and Daymond were back in the negotiations, as they suggested that they’d be interested in the restructured royalty deal.
In a shocking turn of events, Mitch accepted Barbara’s offer, which would ultimately be $200,000 for 50% of company profits, until they get their money back and then 10% equity in perpetuity.
Now let’s look at the Hire Santa update after
The future seems bright for Hire Santa, even though their profit window is so narrow during the holiday season of each year.
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