It is incredibly expensive money, and as O’Leary said, it is a confirmation that many banks are not currently lending to small business in America. This was a crazy deal for the entrepreneurs to take. Astonishingly, the entrepreneurs took the deal. This is a loan with a 15% warrant attached at a zero strike price. As O’Leary said, this isn’t an equity investment. She said that she would give the founders $150k for 15%, but wanted a personal guarantee to repay the money in two years. I agree with them that the near term opportunity is to simply build more centers on their own.īarbara Corcoran seized on a comment from the founders that an investor would get their money back within two years. Mark Cuban added that he thought that the price points were too high for middle-America, and that a business that reflected so much of the founders personality would be hard to scale.
Three of the other sharks quickly passed as well, also noting that the founders should build more locations on their own.
The founders replied that O’Leary would get his money back in two years if he invested, and that they wanted business expertise, not just money. He didn’t believe it was investable right now. He said that he loved the numbers but thought that they should build more locations themselves before attempting to franchise. Kevin O’Leary was the first shark to pass. As the Coop is a labor intensive business that reflects a lot of their own personality, they would prefer to build a franchise model than build a chain of Coop locations themselves.
To build the Coop the two founders took a $125,000 small business loan. Even after paying the two founders $100,000 collectively in salary, the business still made a profit in the $125,000 to $150,000 range. The space can host 6-9 parties per weekend, and they generated $350,000 in revenue last year. Revenue is driven by children’s parties, which cost $600-$4,000 for a two hour party for 15 kids, which apparently is the market price for kids parties in LA. The two founders, Lucinda Lent and Juliet Bodystun wanted to raise $150,000 in return for 15% of the company in order to franchise their concept nationwide.īy all accounts, the Coop is quite successful. The most interesting company to present was The Coop, a modern, design-focused, indoor-outdoor children’s playspace in Los Angeles. Account icon An icon in the shape of a person's head and shoulders.
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