On the most recent episode of Shark Tank, the Sharks found out just how pricey a children's placemat can be.
Lindsey Laurain, the founder of Ezpz, entered the Tank and asked the Sharks for $1 million in exchange for 5 percent ownership. That meant Ezpz, which sells children's placemats with a silicone suction cup to ensure that they stay on the table, would be valued at a whopping $20 million.
"I wanted to do five times that valuation," Laurain said, after she was met with skepticism.
Laurain explained that Ezpz had sold only about 85,000 units during the year, netting the company $1.2 million in gross sales and $140,000 in profit. But Laurain had recently attended an international baby products expo and claimed that her company received interest from nearly 400 vendors from all around the world. She believed that the company could do $10 million in sales in the next year.
Only there were two problems--none of the companies had signed deals, and none of Ezpz's patents had been approved.
"What's disturbing to me is that you're giving us a price today on what the company will be worth four or five years out," said Shark Barbara Corcoran.
However, Kevin O'Leary and Corcoran did offer Laurain separate, "optimistic" deals.
O'Leary offered to give Laurain $1 million for 5 percent of the company, provided that Ezpz's patents cleared and Laurain met her $10 million 2016 sales goal. If she failed to do so, O'Leary's stake would increase to 20 percent. Corcoran also offered to give Laurain the $1 million for 5 percent of the company, but the $1 million would be paid out over the next four years. Laurain balked at the terms.
"You told me you're very optimistic. I've got to buy into that," replied O'Leary.
Ultimately, Laurain decided to reject both deals.
Shark Robert Herjavec was incredulous that Laurain rejected a deal that was structured around her goals, asking her why she would set a $10 million sales projection "if you didn't mean it."
Laurain, 34, from Parker, Colorado, told Inc. that the reason she turned down the deal wasn't because she didn't like the terms. She said that when she asked O'Leary and Corcoran how they could help Ezpz grow, they didn't address her biggest concern.
"My main goal out of the show was to get help on the licensing side," says Laurain, "so in the end, it just wasn't the right fit."
She also notes that Ezpz, which launched with a Kickstarter campaign in September 2014, didn't get product until the following December. Ezpz's total gross sales have increased from $1.2 million when Laurain taped her Shark Tank appearance in the summer, to $2 million today.
Laurain isn't the first entrepreneur to seek such a high valuation. During season five of Shark Tank, Melissa Carbone, the founder of horror entertainment company Ten Thirty One Productions, also valued her company at $20 million. She left with a deal, however. Mark Cuban invested $2 million in Ten Thirty One Productions in exchange for a 20 percent stake.
Still, it is rare for Shark Tank contestants--many of whom are running homegrown, bootstrapped companies--to value their company in the tens of millions. As O'Leary puts it: "That is such a crazy ask unless you have phenomenal sales."
Editor's note: This post has been updated with comments from Laurain.