Arik and Ryan had their company Prank-O featured during
Shark Tank Prank-O Update
- Entrepreneurs: Arik Nordby and Ryan Walther
- Business: Prank gift boxes
- Ask: $640,000 for 8% equity
- Result: $640,000 for 25% equity
- Sharks: Mark Cuban
Arik and Ryan told the sharks that the company has earned $10 million in gross revenue since 2013, certainly an impressive milestone. The sharks wanted modern-day projections for the company, which received a quick response estimating about $2.8 million. While the sales numbers seemed impressive, the sharks were not yet convinced. They also wanted to learn more about the company’s margins.
A single unit costs just $0.66 cents to manufacture while they sell them to customers for just over $8 per box. Most of Prank-O’s sales came from retail and e-commerce, according to Arik and Ryan.
The biggest prank of all seemed to be the fact that the company had racked up millions of dollars in debt, which was a major concern for the sharks. Lori Greiner wasn’t really a big fan of the seasonal business model and decided to drop out first. Daymond John dropped out because he didn’t believe it was an investable business for a number of different reasons.
Barbara Corcoran agreed with Daymond’s opinion of the company and dropped out as well, leaving only Mark Cuban and Kevin O’Leary remaining.
Mark was interested in making an offer, despite the company’s collection of debt problems. He offered $640,000 for 25% equity, a financial offer that would likely not be appealing to Arik and Ryan.
After a few moments to think about their offer, Kevin decided to take a different approach when making his own unique offer. He decided to structure his deal specifically through a royalty repayment. He pledged the $640,000 investment to Prank-O in exchange for 0% equity and a $0.38 cent royalty in perpetuity. Arik and Ryan ultimately decided to accept Mark’s offer.
Now let’s take a look at our Prank-O update after
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