The Sharks Believe Kahawa Coffee Is Not Asking For Enough Money | Shark Tank US | Shark Tank Global
Summary of "The Sharks Believe Kahawa Coffee Is Not Asking For Enough Money | Shark Tank US | Shark Tank Global"
Short Summary:
Margaret Yumo, founder of Kahawa 1893 coffee, pitched her company on Shark Tank, aiming to revolutionize the coffee industry by fairly compensating female coffee farmers in Kenya. She highlighted the unfair treatment of women farmers, who often don't own the land despite doing most of the work. Kahawa 1893 addresses this by sourcing directly from women farmers and allowing customers to tip them via a QR code. The Sharks were impressed by the product and the mission but questioned the valuation of the company. Ultimately, Margaret secured a deal with Emma Grede for $350,000 in exchange for 8% equity, demonstrating the potential of her business model.
Detailed Summary:
Section 1: Introduction & Problem
- Margaret Yumo, founder of Kahawa 1893, seeks $350,000 for 5% of her company.
- She highlights the unfair treatment of women coffee farmers in Kenya, who often don't own the land despite being responsible for most of the work.
- She emphasizes the importance of fair compensation for these women.
Section 2: Kahawa 1893's Solution
- Kahawa 1893 sources coffee directly from women farmers in Africa.
- Customers can tip the farmers through a QR code on the coffee bag, and the company matches the tips.
- This allows customers to directly contribute to the well-being of the farmers.
Section 3: Shark Tank Reactions & Valuation
- The Sharks are impressed by the coffee and the mission but question the valuation of $7 million.
- They argue that the business is not worth that much at this stage and Margaret is asking for too much money.
- The Sharks highlight the commodity nature of the coffee market and the need for significant scaling to achieve a 10x return on investment.
Section 4: Negotiations & Deal
- Emma Grede offers $350,000 for 12.5% of the company, valuing it at $2.8 million.
- Mark Cuban also offers $350,000 for 12.5%, but with the condition of raising additional capital.
- Lori Greiner ultimately decides to pass on the deal.
- Margaret counters with 8% equity and $150,000 in cash, along with $200,000 in debt.
- Emma and Robert Herjavec accept the counteroffer, resulting in a three-shark deal.
Section 5: Conclusion & Impact
- Margaret is thrilled with the deal, emphasizing the importance of having female investors and mentors supporting her.
- She believes the deal will empower the women farmers and help them achieve financial independence.
- The episode highlights the challenges faced by black women entrepreneurs in accessing capital and the importance of fair compensation for women in the coffee industry.
Notable Quotes:
- "The farmers don't always make enough for the delicious coffee that they produce." - Margaret Yumo
- "You're putting a value of $7 million on this business. I hope you have a lot of sales." - Mark Cuban
- "You're a very impressive woman. I get it. You've done a heck of a job." - Mark Cuban
- "You've got something magical happening, but it's not going to last like while you have this magic." - Mark Cuban
- "It's really difficult for black women to get access to that capital, but guess who's sitting right in front of you? Me, who has done it." - Emma Grede