Andrew is a self-educated business owner and entrepreneur with plenty of free advice (which is worth exactly what you pay for it!).
Did the Deal Go Through?
Daymond John, the closest things the Sharks have to a fashion guru, made a deal for $200,000 for 17.5% ownership in the company. The deal actually went through, and there were follow up segments on the show with Daymond helping give out socks to needy and homeless people. Further, the company is well known to have been one of Daymond's top investments on Shark Tank, becoming a centerpiece of his fashion portfolio.
How Did the Business Do After the Show?
In short, Bombas did really, really well. The company, according to its own website, has donated over 30 million pairs of socks to those in need! Further, the company has continued to grow, year over year, and now sells more than $100 million worth of socks (and counting) every year. Bombas continues to marry philanthropy and business success, finding a true win/win for the owners of the business and for society as a whole. After initially starting with $145,000 via crowdfunding, the company quickly scaled up to $300,000 in sales before making the deal on Shark Tank with John. The rest is history.
What Do I Think?
I like to consider deals like this from the perspective of both the Shark who buys in, and the original business owners (or founders) who were seeking venture capital. On that basis, Daymond put in $200,000. The company is surely worth tens of millions today, at a minimum, so Daymond's 17.5% stake is likely worth several million (and maybe even more). The brand is now powerful, and I have to posit that Daymond has a lot to do with that. One thing that may have been even more powerful and effective than John's industry knowledge and brand building skills, however, was his insistence on them not going into retail. Because the company was able to control their margins so well from selling the socks exclusively themselves, they've been able to make a ton of money and give back to the community even more. I'd call this a win/win. One good strategy is to scale up first and then become more philanthropic, reaching far more folks as your company grows. These guys have been able to give back even on the way up, incorporating philanthropy into their very business model, and accelerating the flywheel concept. Well done.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2020 Andrew Smith