Cup Board Pro: More than a Kitchen Aid

Authored by: Quinn Donaldson

The late Keith Young along with his three children, Christian, Keira, and Kaley, hit a home run with the Cup Board Pro. Created by former NYC firefighter and two-time Food Network Chopped Champion Keith Young, this product aims to save time and prevent kitchen messes with its patented cutting board design. Small wells on one side of the board send spills directly to the plastic cup at the edge of the board, preventing liquids from spilling onto the kitchen table. It’s also perfect for collecting chopped food items without leftover mess.

The Cup Board Pro was invented in 2010, but the venture was put on hold twice after cancer struck both parents at separate times in the last decade. Unfortunately, the Young family lost its mother and father to cancer in May 2012 and March 2018 respectively. Motivated by their parents’ love and their father’s passion for cooking and the FDNY, the Young children continued to pursue their father’s dream of making Cup Board Pro a realty and pitching it on Shark Tank.

The Sharks were incredibly moved by the Young’s story and equally as impressed with the product. The Sharks see great value in the patented design, bamboo wood quality, and removable, dishwasher safe cup component. The company sold 15% (or 300 units) of their inventory in the first three weeks after the company’s online launch, showing some initial demand and marketing success. What’s most impressive to the Sharks is that the Youngs are operating the business entirely on their own; executing sales, the marketing campaign, and distribution from their living room.

After briefly deliberating amongst themselves, the Sharks respond to the Young’s $100k for 10% equity offer in unique fashion. All five Sharks agree to counter the Young’s original offer by asking for 20% equity. Furthermore, all the Sharks agree to donate any profits they receive from their equity stake to the FDNY Foundation supporting NYC firefighters affected by 9/11 cleanup-related health issues. The Young’s immediately accept the Sharks’ counter and exit the Tank with a future for Cup Board Pro and an even stronger foundation for Keith Young’s legacy.

Analysis 

Cup Board Pro was a no-brainer for the Sharks. They all acknowledge that their expertise and networks can easily sell the remaining 1,700 units in inventory. Furthermore, the Young’s story, commitment to the business & FDNY Foundation, and Keith Young’s ingenious design is a near perfect recipe for continued sales and growth. Cup Board Pro’s $12.50 per unit cost will certainly go down as the company’s production volume increases, and the $40 retail price is in line with similar products.

The $1 million valuation wasn’t totally unreasonable, but a bit too high for the Sharks at this stage in Cup Board Pro’s life. If we annualize the company’s $12,000 in sales, the Youngs valued Cup Board Pro at a 7x EBITDA multiple ($1 million/$143k annualized profit = 6.99x). Agreeing to a 3.5x multiple is a win for both parties; the Youngs keep 80% of a promising product and the Sharks receive an attractive entry point in a straight-forward business they know they can grow and scale. The Sharks’ extra 10% will go a long way for the FDNY Foundation down the road.

Getting Cup Board Pro into every kitchen in America will take massive marketing and sales efforts. All five Sharks, especially Lori, will be able to use their expertise and distribution connections to help the Youngs grow efficiently as they enter new markets and tackle the challenges that come with scaling. Outside of sales, marketing, and Cup Board Pro’s valuation, my only critique is for Keira, and it’s very nit-picky – easy on unnecessarily using the word “like” when answering questions. She’s the youngest so I’ll give her a pass.

Finally, I cannot stress enough how important the Young children are to this product. The product and its story combined can capture audiences from all sorts of backgrounds. But the key ingredient is the Young’s determination and ability to battle through adversity. The fact that these young adults managed to launch this product and immediately produce sales only three months after losing their second parent to cancer more than proves how strong and resilient they are. Those traits alone will help them through the trials and tribulations ahead, but the love for their parents and father’s legacy will be the never-ending fire that fuels them to success in all that they do. The Sharks will sleep a little easier at night knowing that Cup Board Pro is in good hands.

Kevin O'Leary - Shark Tank Secrets

What better way is there to kick off Season 7 of Shark Tank than with this Forbes interview with Kevin O'Leary. In the interview, Kevin shares some of his Shark Tank secrets - specifically, what type of entrepreneur makes him interested in investing his hard-earned money.

You can watch the interview and read the original article written by Steve Schaefer of Forbes here.

They may call him Mr. Wonderful, but in the Shark Tank boardroom Kevin O’Leary is often anything but friendly to the entrepreneurs pitching their ideas for hot-selling consumer products. O’Leary’s barbs, zingers and critiques have made him a reality TV star alongside colleagues Mark Cuban, Barbara Corcoran, Lori Greiner, Robert Herjavec and Daymond John.

It takes a lot to cut a deal with O’Leary, a tenacious negotiator and harsh critic of gimmicky contraptions, but in a recent interview with Forbes he shared the secrets to success and why viewers can expect him to bet on a lot of women founders in the news season premiering Friday night.

There are three keys to getting one of the sharks to buy in, O’Leary says, evident in virtually every case where a deal is reached with the inventors and entrepreneurs pitching their idea.

First, the basic elevator pitch. “In 100% of cases an entrepreneur can articulate their idea in 90 seconds or less,” he says.

Second, the team “can articulate why they’re the right people to execute the business plan.” Plenty of inventors might be able to come up with a great idea; far fewer have the wherewithal to see it through production, distribution and profitability.

Above all though, O’Leary says there’s a single most important trait Shark Tank success stories have in common.

“The one that really matters is the entrepreneurs know their numbers inside out,” he says, rattling off examples like break-even points, market share statistics and margin analysis. “In Corporate America, when you want to be a leader…above all, you need to know your numbers.”

That doesn’t mean O’Leary is infallible. While he holds the crown for the largest exit in Shark Tank’s history — the $14.5 million sale of smartphone photo collection app Groovebook to Shutterfly SFLY -5.71% last year — the product that has proven to be the best revenue generator completely stunned him.

Scrub Daddy is a sponge product funded by fellow shark Greiner. The selling point is that under cold water the sponge is hard and can be used to scrape food residue off a plate; under warm water it’s softer and can be used in more delicate applications.

“I thought it was a piece of crap,” says O’Leary. But after landing a deal to hit the shelves in Wal-Mart, Scrub Daddy is up to $50 million in revenue.

While he missed out on Scrub Daddy, O’Leary has more hits than misses with his Shark Tank investments, and after studying all of them through 2014 he found a surprising statistic.

“One hundred percent of my returns the last six years have come from companies run by women,” O’Leary says, across different sectors and geographies. “There’s an old adage that says ‘if you want to get something done give it to a busy mother,’” he adds, but he’s less interested in how it’s happening – he speculates speculating that women are more mindful of risk and better at time management, both crucial for the small companies in the Shark Tank pool — than about the outcome.

“I don’t care why. I care about the actual financial results. So this year on Shark Tank, I’m investing in a lot of women.”

@ Cinnaholic: The Sharks just Changed your Business Model

By: Pete Troshak
Twitter: @Shak74
Website: www.Shak74.com

Florian and Shannon Radke are the owners of Cinnaholic, a cinnamon bun company that offers a unique boutique retail experience featuring delicious cinnamon buns (judging by the reactions of the Sharks) with over 30 frosting and 30 topping choices for customers to customize their cinnamon buns. Their buns are safe for people with food allergies; they contain no dairy or egg products and are cholesterol free. This makes their product safe for the over 50 million Americans with an intolerance for dairy, and 5 million people with severe food allergies. Cinnaholic’s buns are also 100% vegan, which is a popular buzzword in food today and a consistently growing market. The have one retail location and did $260,000 in sales last year, and were asking $200,000 for 20% of the company to open up another retail location. They have a minor online sales presence but seemed to have their hearts set on expanding through more physical locations, and not cyberspace.