Season 5 | Episode 501 | EP501
In Season 5, Episode 1 of Shark Tank, Josh Brooks approached the Sharks seeking an investment of $300,000 in exchange for 5% equity in Los Angeles-based company Postcard on the Run.
Postcard on the Run is a unique mobile device application. This piece of software enables people to take a photograph while out and about. The user then has the opportunity to send their favorite photographs along with a short message to the Postcard on the Run team. At this stage, for a small fee, the photo and message will be printed in postcard format. It will then be mailed on to the designated receiver. The postcard app has been designed to offer a slightly more ‘personal touch’ to the idea of sending a postcard while on vacation. Postcard on the Run is also great for save the date postcards and thank you postcards.
Josh Brooks announced that over the past 21 months he had achieved $450,000 in sales. This was after the application had been downloaded close to half a million times over all platforms. The postcards were currently selling at $2.49. This meant that fewer than 40% of people who downloaded the application had gone on to make a purchase. This may seem like a rather substantial figure however Josh mentioned that the company was still in the red and despite continued investment and publicity from a number of sources, Selena Gomez being one of the celebrity investors and endorsers, he was finding it difficult to get his application into the hands of people who were willing to purchase.
While many of the shark investors believed that there was an ability to make profit here most of them pulled out of the negotiations fairly quickly. This was in part down to the fact that they did not see this business model as being sustainable. They believed that the application was far too easy to replicate and that there was no protection from companies that may come along and implement the idea in a slightly better way.
Robert Herjavec was the only investor willing to make an offer for Postcard on the Run. His initial offer of $300,000 for 10% equity in the company. Robert ended up making a final offer of $300,000 for 7.5% equity. He was unwilling to meet Josh’s initial asking price.
Josh Brooks left the Shark Tank after accepting Robert Herjavec’s offer of $300,000 for 7.5% equity in Postcard on the Run. This offer valued the company at $4,000,000.
Robert Herjavec tends to only invest in well executed businesses that have paying customers. If you want to capture Robert’s attention quickly, have a good story, be humble, know your numbers and understand good timing.