The Hoodie Pillow Before Shark Tank – A Comfortable Investment for a Mini Shark
Rebecca Rescate was no stranger to the Shark Tank. In series two of the show, back in May 2011, she had successfully struck a deal with Kevin Harrington for her product ‘CitiKitty’, a toilet training idea for cats. Alongside the publicity she received from the show, Kevin had helped her catapult her business to great heights with sales figures in the millions annually. Her success and business sense soon brought other entrepreneurs to her door.
Chris Hindley was a work colleague of Rebecca’s husband and approached her with his quirky but clever idea, the ‘Hoodie Pillow’. He wanted Rebecca to become his partner, but she was unwilling initially to invest in the company, instead offering to help Chris to get his business up and running. He asked her again after developing the product and this time she agreed to get behind the Hoodie Pillow. Using her own existing CitiKitty storage and distribution networks she was quickly able to incorporate Hoodie Pillow into her product line with minimal disruption.
The Hoodie Pillow on Shark Tank
When Chris and Rebecca appeared on Shark Tank in early 2013 they were seeking $90,000 for a 15% stake in the company.
Rebecca introduced herself to the sharks. She reminded them of her own successful appearance on the show previously and spoke about the success that CitiKitty had enjoyed since then. She asserted that her own experience had helped her to see the huge potential in The Hoodie Pillow.
Chris’s relaxed pitch spoke of the hoodie as one of the most popular items of clothing, but he mentioned the inherent problems with its design. It was impractical when lying down and the draw-strings pulled at the neck.
As soon as Chris had finished speaking, Rebecca jumped in, the pitched appeared to have been rehearsed extensively. After claiming that they had the answer to the problem of uncomfortable hoodies, the pair revealed their product, the Hoodie Pillow.
There was some slightly awkward laughter from the sharks as they finally saw the product for the first time. A red hood had been attached to a large red pillow, the Pillow Hoodie was appropriately named, that was exactly what it was.
‘Theres no discomfort, It allows you to turn your head into your comfy spot with ease.’ Chris explained. ‘Adjustable draw-strings allow you to block out light and dampen sound.’ he continued before explaining that there was a handy pocket included as well. If there was one thing the constantly grinning Chris knew, it was how to sell a hoodie.
Rebecca asked Daymond John if he’d like to try the Pillow Hoodie on. The stylish fashion guru was more than happy to. ‘I’ve sold a few hoods in my time.’ he commented as he stood up.
Stretching out on a couch, Daymond slipped on the red hood and rested his head back on the pillow. It was a slightly surreal sight to see the immaculately dressed Daymond in such a relaxed pose wearing a red hood. The sharks were enjoying it greatly.
‘I don’t think you could look more ridiculous.’ joked Robert as Daymond pointed a remote at him, perhaps hoping to find a mute button.
‘Or more relaxed.’ pointed out Rebecca, trying to keep things on track. ‘So far we’ve sold over 3,000 units. And we only launched eight weeks ago.’ she continued earnestly, but the sharks barely noticed. They were too busy enjoying the sight of Daymond wearing the hoodie and playing for laughs. Barbara Corcoran was almost choking with laughter.
Kevin O’Leary wanted to get back to business, he asked about CitiKitty and how business was going. Rebecca informed him that the company had grown steadily, the current years sales were expected to reach $5 million.
‘Did you invent this product?’ Kevin asked Rebecca. She confirmed that Chris had invented it before approaching her to become a partner.
‘So you just got on board as an opportunist?’ asked Kevin.
‘I think they call me a mini-shark.’ answered Rebecca before confirming that she had bought a 30% stake in the company for a $15,000 investment.
Kevin asked about the valuation of the company, pointing out that when Rebecca had invested in the company it had been valued at around $50,000. He wanted to know how the current valuation of $600,000 had been calculated.
Chris explained that Rebecca had invested in the business when it was just an idea, it was now a proven product with an impressive early sales record. The Hoodie Pillow had also received a large amount of publicity, featuring on Good Morning America and The Today Show amongst other media promotions. ‘People see the Hoodie Pillow and they buy it.’ he asserted.
Robert admitted he could see the functionality of CitiKitty, it solved a problem. He wanted to know what problem the Hoodie Pillow solved.
Rebecca explained that there were 30 million students in America right at that moment who were laying within four feet of somebody else.
‘They’re all looking to spend their money on something stupid?’ asked Mark Cuban.
‘Its only twenty bucks.’ said Rebecca, before explaining the cost to produce it was only five dollars.
Daymond asked if the product had a patent. Chris confirmed that there were design and utility patents pending.
Kevin asked what the $90,000 investment was to be used for.
‘High-cost Low-yield marketing.’ answered Rebecca. When pressed for more details from Robert, she elaborated. It involved social marketing and online promotion in addition to a commercial that was in the pipeline. She stressed how effective a single Facebook video had been at directing traffic to the company website.
Chris announced that the company now had another product, it was essentially a Hoodie Pillow mini, a hood with a padded ring around the neck. Chris demonstrated it and it looked far less cumbersome than the home version of the Hoodie Pillow, smaller and able to be easily stuffed into a pocket. It was fairly cool looking as well, the sharks seemed to like it and made appreciative noises.
‘The reason I like that is it solves a problem.’ Robert said, looking much more interested now.
‘Can you bundle the two products together?’ asked Kevin.
Rebecca confirmed that they could and gave the sharks some more numbers. One and a half billion passengers flew from US airports every year. The Hoodie Pillow not only supported the neck and enabled a more comfortable sleeping experience when sitting down, it could also isolate passengers from their neighbors on a plane. This more streamlined version of the Hoodie Pillow retailed at only $15 and cost $3.50 to manufacture.
Kevin spoke with his usual directness ‘Even though this stuff may be crap, you sell a lot of it, and that’s what matters.’. Rebecca laughed and replied ‘Well thank you.’.
Kevin made an offer. He would supply the requested $90,000 but only in exchange for a one third share of the business. Rebecca and Chris would have to ensure that all three of them, equal shareholders, would pay themselves the same amount, at the same time.
‘When it comes time to cash out, I want to wet my beak at the same pace you are.’ explained Kevin, making it all sound entirely reasonable.
‘I’m hearing cash out, that’s all I’m hearing.’ Rebecca replied. ‘I don’t hear anything about helping us grow the business.’.
‘I don’t want to help you grow the business, I just want to invest in it.’ Kevin explained, ‘You haven’t got another offer so you should be careful.’ he continued, and he was right.
Rebecca however, wasn’t rushing to accept Kevin’s deal. There were a few moments of deadlocked silence until Chris made a counter offer to Kevin, he suggested a $100,000 investment in exchange for 25% of the business.
Kevin dismissed that idea, he liked his offer and made it clear he wasn’t going to be changing it.
‘I’d like to hear if there are other offers’ Rebecca said.
Daymond made an offer at this point, but it wasn’t an improvement. Matching Kevin’s existing offer of a 33% stake in exchange for a $90,000 investment. He liked the product and wanted to help sell it, but he was unwilling to offer more. He added some more pressure to the already harassed looking Rebecca and Chris, putting a ten second time limit on his offer before it would be revoked.
Barbara tried to speak but Daymond appeared to be trying to rush the pair into a deal. Unwilling to let Barbara speak he admitted ‘I’m excited and I do not want this price to go up.’
Rebecca again said that she would like to hear what the other sharks had to say, and that was it for Daymond. He rescinded his offer and dropped out of the negotiations.
Barbara Corcoran made an offer, she would invest the required $90,000 but only in exchange for 40% of the business. She added the additional condition that Daymond would take half of the deal, and the sharks would receive a royalty of ten cents per unit sold. She stressed that Daymond was the shark that was best suited to the product and would be best for the business.
Daymond agreed to join Barbara in the deal but Rebecca still wasn’t prepared to give that much of the company away.
Chris asked if Daymond and Barbara would be prepared to accept only 30% of the business. Barbara suggested a figure of 35% but Rebecca stuck to her guns. A 20% stake for $90,000 investment was what she wanted, and it seemed she wasn’t going to agree to less.
Barbara had heard enough by now, unable to get any form of compromise from Rebecca and Chris she dropped out of the negotiations as well.
The deadlock continued for a moment. The only offer still available for Pillow Hoodie was the one from Kevin. It didn’t look as if it was going to be accepted and he was clearly unwilling to amend it.
Suddenly, from nowhere, Robert Herjavec saved the day for Rebecca and Chris. He offered the originally requested amount, $90,000 in exchange for 20% of the business. He admitted he had missed out on investing in Rebecca once before and wasn’t going to make the same mistake twice. Chris accepted the offer and Robert shook hands with them both. After a tense and deadlocked round of negotiations, the tough ‘mini-shark’ Rebecca had achieved the deal she wanted.
The Hoodie Pillow After Shark Tank – 2018 Update
With the resourceful Rebecca Rescate behind the Hoodie Pillow, along with the surge in interest it received after the show first aired, sales have grown exponentially. Not only is the Hoodie Pillow available in a huge number of retail stores, including Bed Bath and Beyond stores nationwide, it is also distributed across Europe and Asia.
The majority of sales for the product have however, always been online, and this is where a vast array of outlets for the product can be found. As well as the big online stores such as E-Bay and Amazon, you can buy it from a variety of smaller sites. The Hoodie Pillow website now sports an extended product line with Hoodie Pillow Pals, Panda and Monkey styled hoods aimed at children. As if that wasn’t enough to ensure that sales can only go from strength to strength for the product, there is also Rebecca’s own website where, amongst the many links to her own products, including Hoodie Pillows, she describes herself as a ‘problem solver turned serial entrepreneur.’.
It seems likely that without Rebecca’s steely determination and diplomacy the Hoodie Pillow business would not have received such a sweet deal from the Sharks. The qualities that she has consistently shown, both inside and outside the Shark Tank, have made her a valuable asset to the company. Chris Hindley must be able to sleep very soundly at night knowing that she is involved, with or without the aid of a Pillow Hoodie.