Additional Coverage:
- ‘Shark Tank’ judge Barbara Corcoran calls cake business ‘too small’ — then invests $50,000 in it (marketrealist.com)
Daisy Cakes, a small Southern cake business, charmed “Shark Tank” investors with its delicious family recipe, but its size initially posed a problem. Kim Nelson, the entrepreneur behind Daisy Cakes, hoped to secure a $50,000 investment for a 25% stake in her company. While the sharks raved about the cakes, calling them some of the best they’d ever tasted, the company’s modest sales figures of $27,000 over three months gave them pause.
Nelson’s primary sales strategy involved selling cakes at holiday shows, a method that had proven successful regionally. However, scaling up to meet the potential demand of a national market presented a significant hurdle.
Kevin O’Leary, known as “Mr. Wonderful,” questioned Nelson’s ability to fulfill large orders, particularly if the cakes were featured on a shopping network.
Although Nelson expressed confidence in producing 5,000 cakes in 30 days, her lack of a concrete plan ultimately led O’Leary to decline an investment. Three other sharks followed suit, deeming the business too small to invest in.
Barbara Corcoran, however, saw potential in Daisy Cakes and its passionate owner. Acknowledging the company’s small scale, Corcoran nevertheless offered Nelson a unique royalty deal.
In exchange for $50,000, Corcoran would receive $1 per cake sold until the investment was repaid. The deal came with one delightful condition: Nelson’s mother, instrumental in the company’s success at holiday shows, had to remain an integral part of the business.
Nelson enthusiastically accepted the offer, securing a sweet victory for Daisy Cakes.