"Really worries me"— When Shark Tank's Lori Greiner rejected Tia Lupita citing existing debt

Mexican food brand Tia Lupita Foods appeared on Shark Tank season 14 with founder Hector Saldivar seeking $500,000 for 5% equity. The company presented strong growth metrics with sales rising from $900,000 in 2020 to $1.5 million in 2021, projecting $4 million for 2022.

Financial statements, however, revealed losses of $700,000 in 2020 and $1.2 million in 2021 due to high slotting fees. After Daymond John, Barbara Corcoran, and Mark Cuban declined to invest, Lori Greiner addressed the financial situation directly:

"I think you've done a really great job. What concerns me though is you have a lot of debt. There's a lot going on financially that really worries me, so for me it's not the right investment. I'm sorry, I'm out."

Kevin O'Leary subsequently offered and closed a deal structured as a $500,000 line of credit at 12.5% interest with non-dilutable 5% equity.

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Kevin O'Leary offers Shark Tank deal after Lori Greiner exits Tia Lupita Foods pitch

Founder Hector Saldivar entered the Shark Tank with clear objectives for his Mexican food business. His presentation highlighted the company's distribution reach across major retailers including Sprouts, Whole Foods, and Walmart. The pitch centered on projected sales of $4 million for 2022, demonstrating rapid market acceptance.

Each product maintained strong margins, with manufacturing costs at $0.50 per unit and retail prices between $3.99 and $4.99. The company aimed to expand shelf presence while managing substantial operating costs and retail placement fees.

Daymond John stated he lacked passion for the business sector and stepped away. Barbara Corcoran evaluated the funding request and determined $500,000 would make minimal impact on the company's trajectory. Mark Cuban appreciated the product quality but cited industry challenges as his reason for declining.

Lori Greiner mentioned her worries about the existing debt situation. Kevin O'Leary emerged as the sole interested investor. His initial offer came structured as a loan at 12% interest for 36 months plus 10% equity. Through negotiations, Saldivar and O'Leary reached an agreement at $500,000 as a line of credit with 12.5% interest rate and non-dilutable 5% equity.

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Product background

The story began in 2007 when Saldivar moved from Mexico to the United States, bringing his mother's distinctive hot sauce. This family recipe originated in Nuevo Leon, where his mother spent years perfecting the blend of flavors. By 2018, Saldivar transformed this culinary heritage into a commercial venture.

The Shark Tank product line expanded strategically, starting with four hot sauce varieties - traditional Mexican flavors of chipotle, habanero, salsa verde, and the original family recipe. The company then broadened its offerings to include tortilla chips in five distinct flavors: sea salt, salsa verde, habanero, hot sauce, and chipotle.

Each chip variety sold at $5.99, while the signature hot sauces commanded $13.99 per bottle. They also developed two tortilla products: a corn and cactus blend priced at $7.99 and a specialized grain-free option at $8.99. The business focused on creating Mexican food options without artificial ingredients, establishing a clear market position in the health-conscious segment.

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Post tank development

As per Shark Tank Blog, the company's website traffic surged from the typical 1,500 weekly visitors to approximately 30,000 between April 14 and April 19. The company successfully closed the deal with Kevin O'Leary as structured during the show.

The business expanded its retail footprint significantly after the episode aired. Distribution grew beyond their existing partnerships with Whole Foods and Sprouts Farmers Market, adding presence in Publix. The company secured placement in Costco Wholesale Canada and Save-On-Foods, marking important steps in market expansion.

October 2023 brought additional growth capital through a $2.6 million seed funding round, led by Mexican investors Santatera Capital and GBM Ventures. The company channeled resources into product development, introducing two new varieties of Salsa Macha to their lineup.

Shark Tank company reached a significant milestone by late 2023, with products available in more than 5,000 retail stores across the United States. Major retail chains carrying their products included Walmart, Whole Foods, and Target. Furthermore, The Today Show featured Tia Lupita Foods among highlighted small business brands, adding media recognition to their achievements.

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Fans can watch new episodes of Shark Tank on ABC network.