ToyGaroo entrepreneur, Nikki Pope, appeared in Shark Tank season 2, episodes 202. She came in representing her product as Netflix for toys. Based out of Los Angeles, CA.
Nikki Pope's family consists of 11 brothers and sisters, and 13 nieces and nephews, making her keenly aware of toy logistics. Her husband managed to convince her into giving him 50% of the company, while she retains 10% ownership. Their web designer and two online marketers each own the remaining shares amounting to 10% each.
Parents often purchase toys which are played with only for a few weeks and then left untouched. I get that as I have a stockpile of toys to prove her claim. ToyGaroo allows parents to go to the company website and select the toys they wish to have shipped and then ship them back when the children become bored with the toy selection. The company sends a new collection when the current selection of toys are returned.
The ToyGaroo company ask is for $100,000 for 10% of the company. A soft launch produced over 500 members paying $42 monthly. Each client received a box full of toys worth over $200. New, the toys would cost over $500 with the average family spending between $1,200 to $1,400 per year on toys.
ToyGaroo's actual cost of the toys in each box runs between $50-90 and allows ToyGaroo to break even within 2.5 months. She estimates that every $1,000,000 in sales requires an investment of $64,000 in toys to service the clientele.
Niki says her company needs investment to purchase more toys to fulfill orders for clients on the waiting list which is over 1,000 people as of the airing of the show.
The ToyGaroo Deal on Shark Tank
Sharks appearing in Nikki's episode include Mark Cuban, Kevin O'Leary, Barbara Corcoran, Daymond John, and Robert Herjavec. Her first offer comes immediately from Kevin O'Leary for $100,000 for 35% of the company.
Barbara Corcoran wants to know if Nikki has a right to sell ownership in the company, and she responds saying she can do whatever she wants with the company. Barbara isn't comfortable with the deal and goes out.
Daymond John has a bad history of dealing with people who don't control the company, and he goes out.
Robert Herjavec likes the deal, but he wants Mark Cuban to get in with him. He suggests they do the deal, giving her $200,000 for 40% of the company. Nikki responds by asking Mark and Robert if they will do $200,000 for 35% and she will agree to the deal. Kevin interrupts and offers to do the deal at that price, Nikki agrees. Suddenly, Kevin turns to Mark and offers to split the deal with him, leaving Robert out of the deal. Mark agrees.
ToyGaroo goes bankrupt
Daymond laughs at Robert for being squeezed out of the deal. Nikki tells him she's very sorry. But, Robert Herjavec gets the last laugh when ToyGaroo files bankruptcy and both Mark and Kevin lose their investment.
ToyGaroo is the bad fish according to ABC News. The company went bankrupt within six weeks of the investment. The team argued and did not trust each other making it the worst investment that Mark and Kevin have made according to them in an interview with ABC News. O'Leary says, “I never lose like that making the investment a bitter feeling.”