Matt McClurd and Bryan Deluca share their subscription business, Foot Cardigan in Shark Tank. The four co-founders of the company are recently full time having $1.36 million in sales over the last three years, with nine hundred thousand dollars happening in the previous nine months.
Foot Cardigan Surprises Subscriber with New Socks – Shark Tank
Foot Cardigan creates a new and unique pair of socks sent each month to their 6,000 plus subscribers of men, women, and children. Each month a new pair of socks surprise their new owner every month in their mailbox. Their clients love the socks, and the Shark Tank likes the business model.
Season: 7 Episode 703
First Run: 10/09/2015
Sharks: Mark Cuban, Daymond John, Kevin O'Leary, Lori Greiner, Troy Carter
Company: Foot Cardigan
Entrepreneurs: Matt McClard and Bryan Deluca
Ask: $ 250k for a 10% equity
Deal: Mark Cuban and Troy Carter – $250,000 for 20% equity
Matt and Bryan claim Foot Cardigan supplies the baddest looking socks all over the land. The company offers monthly, three, six and nine-month subscriptions at an average cost of $9 each plus shipping.
The Shark Tank investors want to know what it costs to manufacturer the socks which are at $1.93 per pair landed, and there are no inventory items because socks are randomly selected and shipped.
A seasonal aspect to the business exists causing the subscriber base to fluctuate as high as 12,000 subscribers and then slow down when the holiday season is over, while the company maintains a base of loyal subscribers who love their products. And, the company is growing fast with projected revenues of one and a half million dollars in the next year.
Part of their success is due to Bryan Deluca having an SEO background. He claims they have a 7% conversion rate on their website which is excellent.
What do the Shark Tank Investors say about Foot Cardigan?
Daymond John asks if they are open to domestic manufacturing, and they are, so he offers two hundred fifty thousand dollars for twenty-two and a half percent with a contingency that another one of his businesses approves of the deal.
Kevin O'Leary wants to know how he gets his money back, and they suggest they will be able to return the investment within three years. Kevin offers two hundred fifty thousand dollars for fifteen percent and a requirement for the company to make quarterly distributions to all shareholders.
Lori Greiner is not sure how she would make her money back, so she is out.
Troy Carter offers two-hundred-fifty-thousand dollars for fifteen percent. He will help them with a narrative and distribution.
Mark Cuban makes the final offer of two-hundred-fifty-thousand dollars for twenty percent, and he will take over the office administration in Dallas as well as do a Dallas Mavericks deal with them. He extends his offer to Troy Carter, inviting him to join in for half the deal, and Troy graciously accepts.
The Foot Cardigan lands a deal with Mark Cuban and Troy Carter in Shark Tank.