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- The Worst Investments on Shark Tank: Exploring Toy Garou and More
The Worst Investments on Shark Tank: Exploring Toy Garou and More
Discover the worst investments made on Shark Tank, including the failed venture Toy Garou, a subscription service for toys that caught the sharks' interest but failed to sustain. Learn about the risks and challenges faced by entrepreneurs in the competitive world of investment pitching.
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Video Summary & Chapters
1. Introduction 🎬
Overview of Shark Tank investments
2. Toy Garou: The Toy Subscription Box 🧸
A look at the failed investment in Toy Garou
3. Breath Amateur: The Faulty Breathalyzer 🍻
Exploring the failed investment in Breath Amateur
Video Transcript
Over 40,000 companies apply to be on Shark Tank every year, and 250 of those get to actually
pitch the sharks.
Since the show's inception back in 2009, the sharks have invested $207 million into businesses.
With numbers like that, the sharks are bound to make a handful of bad investments.
In this video, we'll be taking a look at two of the worst investments the sharks have
made to date, starting out with Toy Garou.
Toi Garou, or with some we're calling the Netflix for a Toys, was a fairly interesting
twist on a fast growing subscription industry back in 2011.
Essentially, people would sign up for a toy box subscription where they would receive
a certain amount of toys they could use for 30 days.
At the end of the month, the families had the ability to either buy those toys for
good or ship them back and receive a new toy box.
You can tell watching this episode the idea peaked the interest of all the sharks.
The average family spends anywhere between 12 and $1,400 each year.
And tell me again the cost per toy box that you ship was $200 did you say?
And what's your cost on the toys that you're shipping?
On the box of toys it's going to be anywhere between $50 to $85.90.
Two and a half months you break even and right.
That's exactly right.
A deal with struck where Mark and Kevin invested $200,000 for 35% of the business.
But that money was gone quick.
Toy Garou had two massive issues, inventory and logistical cost.
The business begins to grow.
Does it suck up a ton of cash?
Niki, for every million dollars of sales, how much do I have to put in to buy inventory
of toys?
Just in toys.
Just in toys, $64,000.
That's going to cover a year of toys.
Okay, Nikki, I've heard enough.
They have very high costs on toys
because they weren't buying one toy at scale.
They were buying tons of different toys at low quantity.
Also, because toys are different shapes and sizes,
shipping costs were a nightmare to fine-tune.
Ironically enough, the founder of Toy Guru
said appearing on Shark Tank
may have been the worst thing for them.
They had a massive uptick in subscriptions after the show.
No grip on the logistics or inventory costs,
and just like that, they filed for bankruptcy a year later.
The second company we're taking a look at is Breath Amateur.
This today will probably go down as the worst investment since the TV shows inception,
because all sharks were involved.
Essentially, Breath Amateur allows you to plug in a breathalyzer directly to your phone,
allowing you to check your BAC level at any time.
Honestly, the idea sounds pretty strong, and it seems like a product that would have
benefited a lot of people and the sharks have the same mindset of first glance as well.
Brothometer, the world's first smartphone breathalyzer.
It's so small it can fit in your pocket.
