How a Sydney entrepreneur scored a $200,000 deal on Shark Tank and what happens after your startup is featured on national TV
Thursday, May 19, 2016/
Just an hour before the Shark Tank episode featuring their company aired, the Her Fashion Box team were racing against time to prepare for an influx of interest.
The team launched a new website just an hour before its founder Kath Purkis fronted the sharks on national TV, and it paid off.
“It was really down to the wire,” Purkis tells StartupSmart.
“The traffic was absolutely incredible and we saw a big jump in subscribers. We had prepared for whatever was going to happen.”
The episode featuring Purkis aired on Sydney night and saw the Sydney-based entrepreneur eventually score a $200,000 investment from judges Janine Allis and Andrew Banks in exchange for 16% equity in total.
What happens after swimming with the sharks
The startup sends subscribers a box each month containing different selections of jewellery, clothing and beauty products, costing $39.95 per month.
Purkis says the company has now sent out over 50,000 boxes but has struggled to make a profit, something she hopes the recent cash injection will help to overcome.
Since the episode aired, the founder says “so many random things” have already happened.
“We’ve had some bizarre brand partner and investor inquiries,” Purkis says.
“It’s a little bit different from what I thought it would be.”
Initial auditions with Shark Tank producers usually take place in Sydney, but Purkis happened to be in Rome for hers.
“We had to do it over Skype,” she says.
“I had put on all my HFB stuff and I was sitting in the airport waiting for my flight. I had pitched to the producers and they were very keen. I was back three weeks later.”
Preparing for the tank
Purkis says it all happened very quickly, and she puts her success down to her comprehensive knowledge of her company.
“You have two hours getting questioned in the tank, and being put in that position you have to know your numbers,” she says.
“Some of the previous pitchers didn’t really know things like their CPA or LTV, and knowing that is so important for running your business.”
“I made sure I knew my metrics, and spending time with my previous investors helped out so much.”
Despite knowing her metrics “like the back of her hand”, she says she didn’t do much preparation for the pitch.
“I spent the day before with my COO Gavin and we spoke to some people from season one of the program about their experiences,” Purkis says.
“A lot of people are willing to share their experiences if you ask them.
“We just did a few practice questions and I got a good night’s sleep.”
The next day, Purkis did one run through of her pitch in the car park, and then it was time to front some of the most prominent investors in Australia.
After presenting each shark with a customized fashion box, Purkis answered a barrage of questions from each judge.
Three sharks chose not to invest, but Allis and Banks negotiated a joint equity in Purkis’ company in exchange for their investment.
“My dream shark was Andrew, but you just don’t know who you’ll get,” Purkis says.
“You’ve never met these people before, you haven’t built a relationship. Its really really different from normal investments.”
Although Purkis was happy with her result, she says she was disappointed that Steve Baxter chose not to get on board, saying the investor is “so damn real”.
“Like any investor, sometimes you meet them and they won’t be an investor, but there’s so many different ways people can get involved down the track,” she says.
Knowing your company inside-out
For other hopeful startups seeking investment, Purkis’ advice is to always know your numbers.
“It might sound silly, but if you know your metrics it won’t matter what they fire at you,” she says.
“Also, you can’t be disheartened if someone doesn’t love what you’re doing or if they say something negative.”
She also says that you can’t be the “sales guy” as it never comes across as authentic.
“It won’t matter how amazing the business is if they don’t think you’re the right person,” Purkis says.
“Be confident, authentic, and have thick skin.”