"You've got a home run" - When Shark Tank guest investor Kendra Scott went on a bidding war against Daymond John for Create A Castle

Kevin and Laurie Lane secured a $350,000 investment for 20% equity from guest shark Kendra Scott on Shark Tank season 14. The sand and snow castle building kit company presented its patented mold design with side-opening functionality. They revealed $600,000 in 2021 sales through major retailers including Walmart, Amazon, COSTCO Canada, and Sam's Club.

Despite facing a $100,000 loss from shipping cost increases, they projected $3 million in sales for 2022 with margins between 27% and 32%. After Mark Cuban and Kevin O'Leary declined to invest and Lori Greiner passed on the opportunity, Kendra Scott stepped forward.

"I think you've got a home run. I'm going to give you an offer. I'm going to give you $350,000, but I don't think your valuation's $3.5 million...I'd like to give you $350,000 for 20 percent, and I think I can help you with that omni-channel approach, which I do think is going to help you build the business the way you want to build it."

Daymond John countered with an offer of $350,000 for 25% equity. However, after some discussion, the entrepreneurs accepted guest Shark Tank investor Kendra’s deal.

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Kendra Scott wins Create a Castle deal on Shark Tank

Create a Castle founders, the Lanes, walked into the Shark Tank seeking $350,000 for 10% equity, valuing their company at $3.5 million. Their presentation highlighted the core product line featuring three distinct models - basic, deluxe, and pro versions.

Each kit included specialized window cutters and mesh carrying bags for convenience. The basic kit's production cost stood at $2 with a $10 retail price point. Their premium pro kit cost $9.45 to manufacture and retailed for $50.

The founders explained their 12 international patents protecting the design. They shared plans for expanding into indoor activity products. Sales data showed significant growth through major retail partnerships. However, they faced challenges with markdowns and returns affecting their profit margins.

Mark Cuban pointed to their focus on sales numbers rather than bottom-line profits and stepped away. Kevin O'Leary examined their business strategy and suggested moving to a direct-to-consumer model exclusively. He stated concerns about their current approach before declining involvement.

Lori Greiner offered positive feedback about their pricing structure. Shark Tank investor commended their market positioning but decided against making an investment offer. Her commentary centered on the strong product-market fit while explaining her decision to pass on the opportunity.

Guest shark Kendra Scott brought her retail expertise to the discussion. She shared insights from managing multiple sales channels in her own business ventures. Scott saw potential in their balanced distribution strategy. Her offer of $350,000 for 20% equity came with a commitment to help optimize their sales channel mix.

Scott highlighted the benefits of maintaining both wholesale and direct channels while recommending selective retail partnerships. She emphasized her experience in scaling retail operations and managing diverse distribution networks.

Daymond John's interest focused on the licensing opportunities within Create a Castle's business model. Shark Tank investor presented a competing offer of $350,000 for 25% equity. John emphasized his track record in successful licensing deals. His extensive experience in the toy and retail sectors backed his proposal.

The Lanes asked if Scott and John would consider working together on the deal. John responded by highlighting his position as the Tank's most successful licensing expert. Scott maintained her stance as a brand-building specialist. Both sharks stood firm on pursuing separate deals.

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Final deal and outcomes

Kevin and Laurie carefully weighed their options. They proposed a counter-offer to Scott, suggesting 15% equity for the same investment amount. Scott maintained her original 20% equity requirement. After evaluating both offers, the Lanes accepted Scott's terms.

As per Shark Tank Bog, Create a Castle expanded to 32 locations across the United States. They successfully entered the Australian market. The company launched new product lines including indoor activity kits. They secured placement on The HSN Online Platform in November 2022.

The business introduced additional innovations such as Buildmaster, Castle Light Kits, and the Dig and Hold Anchoring System. These expansions strengthened their market position. Create a Castle's value reached $2 million with annual revenue approaching $3 million. Their 2024 projections indicate sales exceeding $4 million.

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Shark Tank season 16 is airing on ABC network.