Kodiak Cakes Shark Tank Regret

Kodiak Cakes Shark Tank Regret

Kodiak Cakes’ appearance on Shark Tank in Season 5, Episode 22, is a notable regret for the Sharks who passed on the investment opportunity. Despite the impressive product and strong market potential, the Sharks hesitated due to concerns over valuation and personal preferences.

Kodiak Cakes went on to achieve substantial success post-show, becoming a top-selling pancake mix at Target and eventually securing a $800 million acquisition by L Catterton. The missed chance to invest in such a rapidly growing and successful brand has since been seen as a significant oversight by the Sharks.

The refusal to accept the sharks’ offers has since been viewed as a smart move, with many considering Kodiak Cakes one of the most successful brands to emerge from the show without a deal.

 The company continued to thrive, eventually securing a minority investment from Sunrise Strategic Partners in 2016, which helped propel its revenue to over $200 million.

Reactions from the Sharks

• Mark Cuban and Lori Greiner were not convinced by the product. Greiner’s disinterest in pancakes and Cuban’s skepticism about the valuation influenced their decision to decline. Cuban later acknowledged that the decision to pass might have been a mistake, especially considering Kodiak Cakes’ success post-show.
• Kevin O’Leary initially criticized Kodiak Cakes for being a “complete commodity” and challenged the $5 million valuation, suggesting it was worth $2 million. His change of heart later, when he and Barbara Corcoran offered $500,000 for a 50% stake, came too late as Clark and Smith had already decided to walk away.
• Robert Herjavec offered the full $500,000 but for a 35% stake, which was turned down. Herjavec’s offer was competitive, but it didn’t align with Clark and Smith’s vision or valuation.
• Barbara Corcoran made a partial offer of $250,000 for a 20% stake, which was also rejected. The combined offer with O’Leary later on did not sway Clark and Smith.

What Happened to Kodiak Cakes on Shark Tank?

Shark Tank Appearance

Clark and Cameron Smith appeared on Season 5, Episode 22 of Shark Tank. They sought $500,000 for a 10% stake in Kodiak Cakes to fund slotting fees for additional shelf space. The Sharks sampled the flapjacks, which featured a berry syrup that impressed them, but the high valuation and price point raised concerns.

Despite offers from some Sharks, Clark and Smith decided to walk away from the deals, a move later endorsed by Mark Cuban.

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Post-Shark Tank Success

Following their Shark Tank appearance, Kodiak Cakes saw a significant boost in sales, reportedly making around $1 million in the six weeks post-episode. The launch of their Protein Power Cakes contributed to this surge, helping Kodiak Cakes become Target’s top-selling pancake mix brand.

In 2016, the company secured a minority investment from Sunrise Strategic Partners, which helped grow revenue from $15 million to over $200 million. In May 2021, Kodiak Cakes was acquired by private equity firm L Catterton for a rumored $800 million.

Shark Tanks Biggest Regret | The $200 Million Miss

Kodiak Cakes’ Sale and Valuation:

1. Initial Growth Post-Shark Tank:
   • After their Shark Tank episode aired in November 2014, Kodiak Cakes saw a surge in sales, generating approximately $1 million in the six weeks following the episode. Their innovative products, including the Protein Power Cakes, significantly boosted their revenue.
2. Investment from Sunrise Strategic Partners (2016):
   • In 2016, Kodiak Cakes secured a minority investment from Sunrise Strategic Partners, a Colorado-based investment firm. While the specific amount of this investment was not disclosed, it played a crucial role in increasing the company’s revenue from $15 million to over $200 million.
3. Acquisition by L Catterton (2021):
   • The most significant financial milestone came in May 2021 when Kodiak Cakes was acquired by private equity firm L Catterton. The acquisition was reported to be valued at approximately $800 million. This deal provided Kodiak Cakes with substantial capital and resources for further expansion, while the founders retained a minority stake in the company.

Current Status

Kodiak Cakes continues to thrive, offering a range of products including various pancake and waffle mixes, oatmeal, snacks, and granola bars. The company has expanded beyond its initial offerings and is available in major retailers such as Target, Costco, Walmart, and more. With a focus on whole grains and no added sugars, the brand remains popular and successful.

Future Developments

Kodiak Cakes has attracted investments from notable athletes and celebrities, including NFL stars Joe Burrow and Travis Kelce, and actor Zac Efron, who joined as Chief Brand Officer.

 The company continues to support conservation efforts and maintain a commitment to quality and sustainability. Valerie Oswalt has taken over as CEO, ensuring that Kodiak Cakes remains true to its mission while embracing new opportunities.