Sealed By Santa Before Shark Tank
Sealed by Santa start off their presentation with their audition video. It started out with a view of Delray, Beach Florida. The entrepreneur, Sarah Blain, introduced herself and her 2 children. She said that she and her family love Christmas, and tend to overdo it. They spend a lot of time in the weeks leading up to Christmas making cookies, decorating the tree, and otherwise celebrating. The video showed this process. Sarah said that of course her business was related to her favorite holiday. When she did research on the business, she found that there is another company similar to the one she wants to start, but Sarah knew that she could do it better.
The camera panned to a completed certificate with Daymond John’s name on it. It was the Nice List certificate, it was decorated with reindeer and Christmas lights, and signed by Santa Claus. Sarah stated that all family members would love it, including parents, grandparents, aunts, uncles, and cousins. She insisted that the gift would give lasting memories. She told the camera that this year had been especially hard because she just got divorced, so was her 1st year as a single mother. She was scared being the only financial provider for her children and stated that she had to make the business work in order to be a full-time entrepreneur as well as a full-time mom. She said that the deal from the Sharks would definitely make it the best Christmas ever.
Sealed By Santa on Shark Tank
Sarah walked out onto the stage and faces the Sharks. She told him that she was seeking $150,000 in exchange for 20% equity stake in her company Sealed by Santa. She began the face-to-face presentation by telling the Sharks that she worked for Santa, and putting an elf hat on. There is some scattered laughter but Kevin O’Leary looked at her like she was crazy. She asked the Sharks if they wondered how Santa responded to all of the letters that he receives each year. Sarah said that sealed by Santa was a business where she and her elf friends help Santa reply to all of the letters. She said that each letter is personalized, comes with magical reindeer food, a red wax seal, and directly from the North Pole.
Sarah continued, stating that the Sealed by Santa package also included a phone call from Santa as well as 2 video messages. She has the Sharks if they want to see if the big guy was available and then brought up a video chat with the jolly guy himself. She greeted him, and Santa asked if these were the Sharks that she was telling him about. Sarah said that they were, and asked if it was okay to show them the letters that they had sent out. Santa said that he already checked his list, but he was willing to check it twice. Robert and Barbara laughed. Santa said that Robert, Lori, Barbara, and Mark were all on his nice list, but Kevin had to be sure to be nice to his favorite elf since he wasn’t on it. Kevin smiled, but he called Santa a bozo and said that he was litigating. Sarah ended her presentation by asking who wanted to be a part of Santa’s official team.
Sarah went to get their sealed by Santa letters as Robert told Kevin not to feel bad. Sarah said that she thought that they could turn that around, while Barbara insisted that they all saw that coming. Robert seemed impressed with his nice list, as Mark wondered aloud how they could fit coal in one of those envelopes. Sarah explained that each letter was personalized to the person. She said that the person purchasing the letter would go on the website and fill in information about the recipient. It could include the location, wish list items, accomplishments, and gender references. The letter was sealed with red wax, and put in an envelope with reindeer food and shipped straight to the North Pole, and postmarks back. Robert said that the whole thing was cute.
Kevin wanted to do a closer look at the business model. Sarah said that the buyer would go on to the website and pick from a selection of 12 different letters. They offer baby’s 1st Christmas, teen letters, Christian letters, and more. Kevin asked what the cost was to her, and Sarah said that it was a $1.50. Kevin wants to know what the customer was worth, and Sarah said that she sold the letters for $10.95. The letter was the simplest thing that a buyer could purchase, and they go up to different packages. She said that was a cool thing about her business that she was able to get a letter out in 24 hours. Kevin said that she was able to do that because she only gets a few thousand. He asked what it happened if it blew up and she got 100,000 orders.
Sarah said that she was happy to answer that. Last year she got 45,000 orders, and they were able to get all of those out on time. Kevin asked if she was able to do it all herself orders she has little elves. Sarah smiled and said that she had 12 L friends that help her during the season. Kevin wants to know what they cost, and Sarah said that she spent $10,000 in employment last year.
Robert asked her when she started the business, and Sarah told him that they started 10 years ago. She had started as a hobby, and she had kids of her own. She’s called it a business for the last 5 years. Kevin asked what her numbers were, and Sarah said told him that her sales last year were $355,000. She said that her net profit was $180,000. Robert wants to know what she did the year before that, and she told him that they did $250,000. Robert said that they had great growth.
Kevin said that Sealed by Santa can only play out once a year, and Sarah said that she was happy that he mentioned that he could she had something else to show him. She got another folder from behind her display and said that last year they’d started to play around with other businesses. She showed them a letter of Santa and Mrs. Clause sitting on a beach. She said that Santa goes on vacation, and Santa puts in the letter while the child would need to do to stay on the nice list. She said that really took off. Next, the business started partying with the Easter Bunny. She showed off another letter. Robert said that it was really cute.
Barbara wants to know how well the Easter letter was doing, and Sarah told her that it was the 1st year that she did it, and they got $15,000 for each run. She is trying to make the seasonal business not as seasonal. Kevin wants to know if she had a database of customers, and Sarah said that she did. She had a database of 60,000 customers. Kevin wants to know if they are capturing the birth date of the child, and Sarah said that she was not at this time. Kevin looked very disappointed. Sarah said that she felt like she had done a lot at this point, but there are several things that you need to work on. She said that she thought that there is something retail there, especially with the evidence kits. While the other sharks were arguing about why she would want to go into retail, Kevin made an offer.
Kevin said that sealed by Santa fits into several of his businesses that would be of interest to her, and he has a massive online business for kids already. He said it was contingent on her agreeing to be put on the Something Wonderful platform where they all push their names to each other and make 15% discounts each other’s basis. Everyone does it because of the economics of customer acquisition cost work. He offered her $150,000 for 33 1/3% equity. Kevin said that he was asking for the extra equity because he added a lot of value. Sarah paused and then told Kevin that a wise man once said that if you want to get something done give it to a single mom. She told him that he would not be able to find someone with more drive than her. She sounded like she was about to cry.
Kevin asked if the offer was so good that she was crying, and she nodded a little while wiping her tears. After the show came back from commercial, the narrator explained that all the Sharks were still in and she had an offer on the table from Kevin. Kevin told her to forget all of the other losers as he gestured to the other sharks, and just take the deal. Sarah said that she would, but she was the sole breadwinner for her family and she knew what she had to make. She wants to stick as close to the 25% as possible. Kevin asked her if she didn’t think that he could quadruple the amount of money that she made, and Sarah said that she did but she also had to think about her girls. Sarah said that she’d like to think about it, and Kevin said sure.
Barbara said that she would give her a minute to dry up before she started talking. Sarah apologized and said that it’s been a crazy 3 months. She said that the day that her husband left her was the day that she got the call from Shark Tank. Barbara said that her business reminded her of another business that she had invested in. The business also produced a Christmas item as well as trying to make it less seasonal. In the end, the thing that sold the most was the Christmas item. Barbara advised her to just admit that it was a seasonal business, and be OK with that. She said that she did not see it as invest-able, even though she thought Sealed by Santa was a wonderful company. Barbara went out.
Robert asked Sarah how much money she would need to pull out of the business each year in order to support herself and her children. Sarah said that she takes a $60,000 check now, but she needs to be added about $100,000 in order to be comfortable. Mark cuts in, saying that she could just ask for a salary. He asked Kevin if as part of the deal he would be willing to cut her $100,000 salary in exchange for the extra equity.
Kevin explains that he would give her the hundred thousand dollars for her business in exchange for his equity asked, but he wouldn’t tell her what to do with the money. He said that she would get to keep whatever they made after he took out his 33 1/2%. Mark said that he admired what she had done so far, but he saw a couple red flags in the business. He told her that she showed a lack of focus by wanting to go into retail, and by spreading herself too thin by trying to get into other holidays. He was out for those reasons. Sarah thanked him.
Robert said that he understood Kevin’s explanation, but he didn’t need the same thing. He said that he would give her the $150,000 for one-third of the business, and the 1st hundred thousand dollars that they made would go straight to her. They would split the profit above that. They could invest the money back into the business. Robert also saw the value in expanding into other holidays, and Sarah agreed. She said that she was also thinking of partnering with the tooth fairy.
Sarah’s mention of the Tooth Fairy called Lori’s attention, and Lori decided to make an offer. She wants to give her $75,000 loan and put $75,000 into the company for 22 1/2%. Lori said that if they continue to do well in retail, she would continue to fund the inventory. Sarah said there was a lot to think about. Kevin explained that she had 3 offers, now she had to decide. There is a bit of an awkward pause as all of the Sharks waited anxiously for her decision. She ultimately chose Lori. It seems like she really wanted to get into retail. Let’s see how this decision panned out for Sealed by Santa.
Sealed By Santa After Shark Tank – 2017 Update
On the Sealed by Santa website, Sarah has added a Shark Tank section to the website that features an update article. The Christmas company is now shipping to Canada. After the episode aired, Sarah has been inundated with calls and emails She deftly handled the extra orders and an ill child at the same time. She had decided to take Lori’s offer since the QVC mogul asked for less equity than the two male Sharks. I’m excited to see what new products that they will come up with together. Check out the website by clicking here.