Shark Tank Us | Will Young King Hair Care Go For Kevin'S Royalty Deal?

First, in the tank is a company for an underserved customer, hey sharks. My name is Cora, and this is my husband, Stefan and we're from Atlanta Georgia we're seeking 225 000 for 2.5 equity in our company Hair Care. Wow shark. Did you know that? Excuse me sharks. It sounds like we may be getting a video call in hey sharks, I'm the real shark here I'll. Let my parents handle it. I got ta. Take that I got ta. Take a car, bye, well, sharks! That'S our son and chief inspiration, officer, Kate and, as you can see, he's the one that really runs the show. We actually started this company because of him. Kate was born with a head full of hair and we quickly realized that we need to help selling his hair because there was no plant-based natural or clean hair care products that were specifically crafted with young men with textured hair. So we created Young King Hair Care. The first, the first, the fast, the fastest growing Multicultural brand for young men. We currently offer five natural hair care products that promote textured, hair health and growth and provide a simple regimen to make it easy for both parents and their sons to care for their hair. So sharks, if you believe Multicultural boys, deserve high quality products really tailored for their needs. Please join us on the Journey of redefining Mel grooming. By focusing on the Next Generation We Are Young Hair Care. Sharks. You'Ll see that you have samples in front of you, for you guys to be able to try out. Can you tell us a little bit about yourselves? Absolutely absolutely. I was raised by a single mom uh, Who provided for me and my sister and instilled the confidence in us to go after our dreams. My sister went on to be a physician and I actually worked my way up the corporate ladder and was a VP at one of the largest healthcare companies in the globe. When I had my son, as you saw, he had so much hair and I was looking for products that I felt really reflected him as a young man of color, and so it just bothered me that I didn't find anything like that that existed and my husband Actually did a little mini shark tank with me and I pitched to him um and he was like yeah you're on to something - and I was like I could have told you that duh and Stefan are you in the business. I am in the business. So my entire career has been within marketing. I had worked on some of the most iconic brands that you guys know so working at General Mills working on Nature Valley and Fiber, One in Progreso working at Coca-Cola, where I ran Sprite for North America wow. Do you have any competition, so we have uh competition in terms of there being other textured, Kids Hair Care Brands. There are not a lot of products out there that focus on plant-based natural, clean ingredients, but they are unfocused on boys, correct at all Damon. When you were a little demon, it's just a little baby. We both had hair. What did you use for your hair? You know back, then there was either Supernatural or you generally just didn't care. We didn't have a lot of information back then right when we walked down an aisle, and I haven't been down that hair care aisle in a long time and I walked back down it. Hadn'T changed in 15 and 20 years. There was nothing else. There was nothing but pinks and oranges. There wasn't anything that spoke to our son and spoke to boys, I'm dying to ask 225 000 for two and a half percent you got ta have big sales. You guys like sales, so let's talk about forty one hundred dollars: that's it in our first year of sales, okay, so and that was 2019. okay. So then, obviously we know a little thing called cobit kind of impacted the business. So we finished a year in uh 2020 at 362 000., that is growth. So far in 2021, we've been okay um. We have okay, okay, um 1.54 million dollars. Yesterday. What are you making any money? Are we making any money now we are not profitable. Yet, oh the path to that. What'S your average selling price across the line and what your average cost of good across the line our costs come in at about 235 to 350, depending on the skew for wholesale, we actually sell that between six and six fifty to them and then on DTC. We sell um up to 14., so where did the money go? Obviously, as a new brand, we had to drive brand awareness right so about 70 percent of our expenses go towards marketing wow. That'S the problem! Yeah, that's really hot, but we had to introduce a new brand to an audience that didn't know about us how much money or how much did you raise or borrow and how much of the company do you own? So we raised 1.6 million hello. He weighs 1.6 million. No, I know why you bald. Let'S go on a convertible note that closed in March and that was our seed round listen. I think you are right on the right Trend. I definitely think you should put these gorgeous young men. Your son's faces on here because my biggest marketing thing is: you should look at a quick glance and know what something is like that, but I feel this is a super competitive space, so I have concerned for you in really growing it to be something enormous. It'S just not the right investment for me at this time. I'M out. Thank you. Thank you. I see the need for the product, you got investors, you have a responsibility, I understand asking for 2.5, but I can't get behind that for 2.5 uh. Okay huh. What can you get behind? One shark is out Damon likes Cora and Stefan's Hair Care brand marketed to boys with textured hair young king, but he's concerned about the high valuation and small stake. They came in offering it's not about what I owed one in one of these situations, because a lot of things that we take in in consideration. You offer me 2.5. I can't it's an insult to go to 15 and 20 and all that kind of stuff. It'S just not right, but what would you feel good yeah? I would say I'm out of respect all right. You know it's obvious. You came from a big company because you market, like a big company and that's tough when you step into an entrepreneurial environment. Branding as a small entrepreneurial company, is a completely different effort and I'm not sure that you're going to be able to accomplish that. And I'm not sure that you know I'm a lean and mean work your way through type guy, so I don't know if we'd be a fit. So for those Reasons I'm out, okay, like I tell you amazing product, I believe in you, I believe in the future. I just don't understand the narrow Niche aspect of it like what I was hoping was you're going to build a representative brand to take on all those products. So we are so we have to start somewhere. Yes, exactly our goal is to create Holistic Solutions from very early and baby all the way up until their time challenge. You have a lot of we're growing we've got skin care, that's actually launching. I wish you had all that, but at you know to Damen sport. What a two and a half percent! What am I going to ask for 3.1 and we're negotiate a 2.7 2.9? I I I can't get there at the two and a half percent. I wish you all the best. I mean honestly two of the most impressive people. I'Ve ever seen on on that carpet. Yeah! Congratulations! Thank you! Thank you! So it I'll tell you guys - and I know one of the things that's important and one of the things that we teach our son Kate right is the word can't right can't have not your vocabulary, and I understand - and I understand where you guys come from - we Came here not to just be here right, but to find and leverage your expertise to really help us grow. Is there any flexibility where you know we're open to if it's a line of credit um? Is there any debt vehicles that people might want to be interested in because we'd love to partner, because again, we're still growing for the future, and we have a lot of the word royalty? Actually, no, I don't think you said it yeah. I thought I heard royalty. Yeah, I don't think I don't think he said royalty at all actually know where that came from it says: young king, a king is royalty. That'S what it is. You know what I like about this. It has sales yeah a lot of those things and when, when there's sales, sometimes my hair starts to grow back, because because it can support a royalty, my favorite structure, as you know, you have the margins. I would give you the 225 thousand for a dollar a skew until I get back to 225 and then it drops to 50 cents in perpetuity Kevin. That'S what I'm saying is this is forever. So when Kay has kids correct, kids, I don't have any Equity. So why would I do it any other way? Kate is acting like he's gon na be working for Mr Wonderful, I'm the only shark that believes in you guys all right. I know you're not going to do that deal I'll. Give you an offer. Okay, I think royalties are tough because someone's going to buy you yeah, but I'll do it for 50 cents. Until I get a 2X return on the money, I give you so I'm going to give you 225 000. When you pay me back 450, the royalty stops. I want a five percent equity that converts if the company gets sold. So I help you now and if you grow I convert to five. You know what that's going to be much more expensive than my royalty. If you sell this business one day, it's much more expensive yourself way more to him. You know what, if you sell the business for 500 million dollars, you don't care. I like that deal. That'S a huge mistake. This is the balance between royalties. It'S a great lesson. Go ahead, you know, Stefan, I can't read lips yeah, so you don't have to do we're going back. I appreciate, I think, first and foremost like both Mr Wonderful and Robert, like I appreciate y'all, our issue is cash flow and because of we're spending so much in other places, so royalty is a little difficult for us for both of you guys so respectfully. I don't think that we're going to be able to take a royalty for you way to stick your shirts. Congratulations guys all right! Thank you. We built this from the beginning from just uh I mean we built it for our son, Kate and I think that's the thing that we think about we're doing everything for him um. So you know we'll we'll be back, hopefully we'll be back, and then you know we'll uh you'll see and hear young king foreign. What you did there was sneak in a five percent of the exit price - oh no, which may ultimately cost them way more than 50.. Sucking so much cash, I can't believe the savagery, the greed you expose them to. I can't believe it