Lecture Notes: Scrub Daddy Presentation

Introduction

• Presenter: Aaron Krauss
• Product: The Scrub Daddy
• Objective: Seeking $100,000 investment for 10% equity in Scrub Daddy
• Location: Philadelphia

Product Features

• Functionality:
  • Changes texture with water temperature:
    • Hot Water: Soft and compressible for general use
    • Cold Water: Hard and firm for heavy-duty scrubbing
• Demonstration:
  • Effective cleaning of burned-on food with just water (no chemicals)
  • Safe on various surfaces
  • Smiley design aids cleaning utensils on both sides
  • Hand grip helps in cleaning efficiently

Current Business Status

• Retail Presence:
  • Available in 5 supermarkets in Philadelphia
  • Sold on company website
• QVC:
  • Appeared on QVC three times, showing significant growth in orders
  • Total sales of over $100,000 in four months on QVC
• Patents and Trademarks:
  • Has a patent with more pending
  • Owns trademarks and domain names

Investment Proposal

• Purpose:
  • To set up an independent manufacturing facility
  • Address supply constraints and increase production capacity
• Manufacturing Experience:
  • 18 years of experience in running a 24/7 manufacturing plant

Financials

• Cost:
  • Production cost: $1 per unit
  • Wholesale price: $2.80 per unit

Sharks' Feedback and Offers

• Concerns:
  • Potential retail challenges
  • Dependency on QVC
  • Market saturation concerns (single product company)
• Offers:
  • Various offers ranging from equity deals to royalty-based financing
  • Kevin O'Leary's offer: No equity, royalty-based
  • Lori Greiner's offer: Initially $100,000 for 25%, increased to $200,000 for 20%

Outcome

• Deal Made with Lori Greiner:
  • $200,000 investment for 20% equity
  • Leverage QVC and retail connections

Post-Shark Tank Success

• Business Growth:
  • 273 employees, 160 products
  • Sold in 257,000 retail locations
• Sales:
  • Over $670 million in retail sales
• Manufacturing Expansion:
  • New facilities in Chattanooga, Tennessee, and New Jersey
• Sustainability Initiatives:
  • Solar-powered headquarters
  • Excess electricity supports local homes
• Strategic Partnerships:
  • Collaboration with Unilever for global expansion

Conclusion

• Scrub Daddy has become one of the top five grossing companies in Shark Tank history.
• Aaron Krauss attributes significant business growth and opportunities to the Shark Tank experience.
• The product has evolved from a simple scrubbing tool to a global brand, enhancing the cleaning experience worldwide.