Why Did Shark Tank Pass On the Chub Rub Patch? Season 14, Episode 12
Why Did Shark Tank Pass On the Chub Rub Patch? Season 14, Episode 12 The Sharks’ decision was influenced by a combination of market saturation concerns, high valuation, and the competitive nature of the product. During their pitch on Shark Tank Season 14, Episode 12, Alicia Long and Dane Turk demonstrated the NUTR Nut Milk…
Why Did Shark Tank Pass On the Chub Rub Patch? Season 14, Episode 12
The Sharks’ decision was influenced by a combination of market saturation concerns, high valuation, and the competitive nature of the product.
During their pitch on Shark Tank Season 14, Episode 12, Alicia Long and Dane Turk demonstrated the NUTR Nut Milk Maker and sought $500,000 for 5% equity. They emphasized the appliance’s ability to produce fresh, preservative-free nut milk at home, a healthier alternative to store-bought versions.
The sharks were intrigued, especially when they learned about the strong 73% profit margin—the machine costs $42 to produce and sells for $169.
Lori Greiner didn’t see the need for another appliance, so she dropped out. Mark had already invested in a competitor brand, so he dropped out too.
Kevin was next to drop out, not agreeing with their valuation. Daymond John didn’t agree with their numbers, so he dropped out. Daniel was willing to entertain an offer from the entrepreneurs, but quickly realized that they were way too far apart to come close to making a deal.
NUTR, a company founded by Alicia Long and Dane Turk, pitched their nut milk maker on Shark Tank Season 14 but did not secure a deal.
Here’s a breakdown of why the Sharks decided not to invest:
Reasons Why Sharks Rejected NUTR Nut Milk Maker:
- Product Saturation and Market Concerns:
- Lori Greiner: Didn’t see a need for another appliance in the market and chose to opt out. She likely felt that the niche for such a product was already saturated or not compelling enough for her investment.
- Mark Cuban: Already invested in a competing product, NuMilk, which made him less inclined to invest in another similar product.
- Valuation and Financial Concerns:
- Kevin O’Leary: Had issues with the company’s valuation. NUTR was seeking $500,000 for 5% equity, implying a valuation of $10 million. Kevin O’Leary, known for being meticulous about valuations, found this valuation too high given the company’s financial metrics and growth prospects.
- Daymond John: Also found the valuation or financial projections problematic and decided not to invest.
- Negotiation and Equity Demands:
- Daniel Lubetzky: Was impressed with the product but found the equity terms too far apart from what he was willing to offer. Alicia and Dane’s counteroffer of $500,000 for 7.5% equity plus 2% advisory shares was not acceptable to Daniel, leading him to withdraw.
Financial and Operational Highlights:
- Sales and Growth: As of their pitch, NUTR had generated $793,000 in gross revenue and projected $6 million in sales by the end of 2022. The company was already achieving significant sales, reaching $2 million midway through 2022.
- Margins and Costs: The cost to produce each machine was $42, and it was sold for $169, providing a 73% profit margin. Despite these strong margins, the Sharks had concerns about long-term scalability and the competitive landscape.
Post-Shark Tank Success:
- Market Performance: Despite not securing a deal, NUTR has continued to thrive. They achieved their sales target of $6 million for 2022 and have continued to grow. The nut milk maker is available on major retail platforms like Amazon, Walmart, and Best Buy.
- Funding and Valuation: As of the latest update, NUTR is valued at approximately $10 million and has raised significant investment through various channels, including crowdfunding and private investors.
Despite the setback, Alicia Long and Dane Turk’s company has demonstrated resilience and continued success in the market.
