Rarely do entrepreneurs on Shark Tank get more funding than they originally request. It's even rarer for them to walk away with a $1 million deal.
That's what happened on Friday's season finale of Shark Tank on ABC. Husband-and-wife duo Joe Denim and Rachel Connors were originally seeking $400,000 in exchange for 7 percent equity in their hand-woven hammock startup. Kind Snacks creator and guest shark Daniel Lubetzky countered with a deal for $1 million in exchange for 25 percent equity, arguing that they needed more money as a mission-based company.
Lubetzky was right, but not for the reasons he noted at the time. Denim and Connors filmed their Shark Tank segment in September, six months before the U.S. was struck by the coronavirus pandemic. What seemed like a lucky break at the time is even more fortuitous now as small businesses across the country battle lagging sales and fickle investment markets.
"I knew that they were going to need more cash than they anticipated, then lo and behold the pandemic hit," Lubetzky tells Inc. "Now they have the cushion."
The couple got the idea for Yellow Leaf after Denim took a trip to Thailand in 2011. There he discovered a line of hammocks made with soft yarn by the women of the Mlabri Tribe--which translates to "the people of the yellow leaves"--as part of an economic development program to create jobs and lift members out of poverty. He took a 600-mile cab ride to the village, met the weavers, bought as many hammocks as he could fit into his luggage, and brought them back to the U.S. to sell.
The co-founders decided they would create a business around the comfortable hammocks as a way to prop up the weavers. They launched Yellow Leaf in 2011. Three years later, the couple joined the Unreasonable Institute accelerator--which is now known as Uncharted--and quit their day jobs to focus on the business.
Yellow Leaf was growing at a steady 30 percent clip, year-over-year until 2019 when the pair launched a successful Kickstarter campaign. They received $235,814 from an initial ask of $20,000 and booked $1.3 million in revenue that year. Today, the hammocks retail for between $179 and $299.
The trend lines have continued upward for the company since the pandemic, as consumers search for relaxing activities and spend more time in isolation in their backyards, for instance. Yet plenty of small businesses around the country are shuttering due to the pandemic--sometimes for good. At this Lubetzky, who has also gone through hard times as an entrepreneur, shared some advice or for those now struggling because of the pandemic. Here are his three tips:
1. Do your best to stay optimistic.
While this can be difficult in today's climate, Lubetzky reminds entrepreneurs to focus on their goals. "Draw your own purpose and why you're doing what you're doing," he tells Inc. "Let that purpose fuel you."
2. Don't follow someone else's playbook.
While another entrepreneur may have implemented a brilliant idea--that may be perfect for selling amid the pandemic--try not to "blindly follow an approach that worked" for someone else, he adds. "You distinguish yourself as an entrepreneur when you come up with a new way to do things that hasn't been done before," Lubetzky says.
3. Conserve your resources, including your energy and finances.
You'll need some reserves to get you through this period, Lubetzky says. In a similar vein, he suggests using this time to perfect your product or service instead of racing to get something on the market. "This is the right time to be very introspective," Lubetzky says. "Use that extra time to take out any kinks."