Dogs can be vegans too.
That's the premise of vegan dog food company Wild Earth, whose founder Ryan Bethencourt brought a pair of real dogs to his Shark Tank pitch on Sunday. The Berkeley, California-based company creates sustainable dog treats made with koji protein, a type of fungi used in soy sauce and miso. Despite having no sales and a product that hadn't hit the market yet, Bethencourt asked the Sharks for $550,000 for 5 percent of his business. At a valuation of $11 million, the company proved to be a tough sell.
"When you come in here and ask us for over half a million dollars for 5 percent and I have no proof of this concept whatsoever, how can I invest in that?" Lori Greiner said before opting out.
What none of the Sharks could argue with, however, was Bethencourt's impressive professional background. An accomplished biotech entrepreneur, Bethencourt is also a co-founder of IndieBio, a life science accelerator that has invested in more than 70 early-stage biotech startups. While his vision for a pet food that's healthier for dogs and better for the environment made his presentation impressive, guest Shark and RSE Ventures co-founder Matt Higgins wasn't ready to invest.
"You're probably a genius, but you represent what happens when you jack up that valuation," Higgins said, adding that Wild Earth's "inflated" valuation made the product not investable.
Bethencourt argued that demand exists for a vegan and ethically sourced dog food and noted that Wild Earth had already raised $4 million from investors, including PayPal co-founder Peter Thiel and venture capital firm Felicis Ventures. The previous investment round didn't convince the Sharks, however, that consumers would pay $12.99 for a bag of Wild Earth dog treats--almost twice the cost of comparable conventional dog treats. The company launched its product in October of 2018 and now sells bags for $9.99 online.
Though Mark Cuban wasn't scared away by Wild Earth's valuation, he said he'd only invest under one condition: that Bethencourt promise to focus only on proving the success of his existing products before creating more. Cuban offered $550,000 but asked for 10 percent of the company. With no offers from any of the other Sharks, Bethencourt took the deal without negotiating.
"I think you're both high," John shouted after Cuban and Bethencourt shook hands. "You better take them dogs to In-N-Out Burger. They're about to faint."