Season 5 | Episode 511 | EP511
In Season 5, Episode 11 of Shark Tank, Marley Marotta & Alexander Mendeluk approached the Sharks seeking an investment of $450,000 in exchange for 30% equity in ‘SpiritHoods’. The animal hat company is currently based in Los Angeles, California.
SpiritHoods are faux fur hats designed to be worn when the weather is cold. Each of the Spirit Hoods has been based around a specific animal. The result is each Spirit Hood having its own color and design. While Marley Marotta & Alexander Mendeluk were pitching Spirit Hoods as an individual product they were also pitching to expand the brand as a whole. It was their intention to expand their product range in the future and become a ‘lifestyle brand’. Many of their products were being sold as concert gear (dubstep gear), party costumes and Halloween costumes.
The majority of the Sharks were not happy with the idea. They believed that at the time of the pitch sales were far too low. They also believed that the product was far too niche to make any sizeable return on their investment. They also believed that a new product would be very tough to market in the incredibly competitive fashion industry. Most of the Sharks therefore pulled out in quick succession.
While Daymond John was interested in the company having made an offer of 50% equity in the company the duo was reluctant to agree. They attempt to negotiate on the price. This ended up alienating Daymond and he decided to withdraw from proceedings. Marley Marotta & Alexander Mendeluk left the Shark Tank without the investment that they were seeking.
The only Shark willing to place an offer on the table was Daymond John. He was willing to offer the full amount of cash ($450,000) but this would be in exchange for 50% equity in the company as opposed to 30%. This would in theory give him a controlling share in the company with the other 50% being split amongst a number of different investors who most likely would not always be in agreement with one another.
Daymond John is a man that understands the fashion business. It is for this reason he wished to claim a high equity stake. He believed that he would be able to deliver more to the company than any other investor. He believed that he had the contacts which would really take the company to the next level.