Hello class,
I had the great pleasure of interviewing Renee Wallace, co-founder, creator, and co-owner of Doc Spartan, which scored a deal on Shark Tank. Renee wanted some time to think about the questions I was asking so that she could answer properly and precisely, so she agreed to an interview where I sent her questions I always wanted to know about her Shark Tank experience, in which she replied. Renee is the perfect SME, considering her business is a small business, and yet she has venture capitalist investments in the company. The story behind her deal on Shark Tank may surprise you, though! Enjoy!
1. Can you describe your experience from Shark Tank?
Our experience from Shark Tank was incredible, nerve racking and stressful but life changing.
We were contacted out of the blue after 6 months of being in business and were asked to send in an audition video. After months of paperwork and back and forth keeping us on the edge of our seats, we were finally asked to fly out to LA to shoot the show two weeks beforehand. Shooting the show was a day long process that consisted mostly of just waiting our turn to go into the tank. While we were in the tank it was very scary. We had no idea how they would treat us. We were in the tank for appx 45 minutes (the actual episode was only 8min). Luckily it went well and we were able to score a deal with Robert Herjavec.
2. How did you know how much to ask for when going on Shark Tank?
It was very hard to evaluate our company and know how much to ask for when we were preparing to go onto the show because we had been in business for such a short period of time so our company wasn’t really worth much at all. Unfortunately, there is no formula to give you a perfect answer in this situation. Ultimately, we watched a lot of past episodes and watched to see what the sharks tended to scoff at. We estimated what we thought we would make in the next year and decided that $75,000 for 25% of our company would be fair. We also knew that we wouldn’t go above 35% because we currently had two owners and we didn’t want a shark having more equity in the company than either one of us.
3. Were you more concerned about getting a deal for the funding or for the publicity that Shark Tank would provide to Doc Spartan?
We were looking for publicity. The weekend that the episode aired, we were able to do the same dollar amount in sales that we had done in the whole previous year.
4. How much paid-in capital did you contribute to Doc Spartan, and what was your limit to spend before canning ideas?
We were able to start the company with just a few hundred dollars and then grow the company gradually, reinvesting our profits back into the company. We never set any actual spending limits.
5. How did you formulate growth to show to the investors on Shark Tank?
Based on our monthly sales before the airing of the show, we had determined that we were growing monthly by 20%.
6. After filming and knowing you struck a deal, what were processes that you had to go through with Rob Herjavec’s team?
We had to fill out endless amounts of paperwork that dug deep into our personal and business financials. Which turned out to be great for us because it forced us to take a hard look at our numbers…All of our costs & expenses.
We now have quarterly meetings with the HEC team about our financials and everything that we have going on within the company and contact them anytime we have any questions or problems.
7. What were things that you learned about business financials after the show?
Nothing specific comes to mind.
8. What things do you wish you would have done to be better prepared to approach investors?
Honestly, we spent months preparing for the show, so fortunately I can say that we went into the tank well equipped. The only major issue that was brought to our attention by Mark Cuban was that we may be making “claims” that were not backed up with the proper testing etc. We were presenting an all-natural first aid ointment and were claiming that it “heals” wounds. When in reality, we had not had our product tested by the FDA, so we could not make claims that could not be backed up officially.
