ChompShop founders present their innovative cardboard cutter on Shark Tank
Highlights
- Kausi Raman and Max Leichty present their line of cardboard cutters for kids in Shark Tank Season 16.
- Started in 2023, ChompShop made $1.2 million through a Kickstarter initiative.
- The entrepreneurs faced apprehensions regarding production and pricing.
Overview
| Category | Details |
| Name | ChompShop |
| Founder | Kausi Raman and Max Leichty |
| Industry | Toy |
| Product | Cardboard Cutter |
| Funding | $1.2 million (Kickstarter) |
| Investment Ask | $250K |
| Equity Offered | 5% |
| Valuation | $5 million |
The entrepreneur duo of Kausi Raman and Max Leichty approach the judges on Shark Tank Season 16 with ChompShop. The Philadelphia-based product designers state that their company offers a range of creative cardboard-cutting tools for kids. Their offering on Shark Tank is ‘ChompSaw.’
The entrepreneurs enter the show with a pile of cardboard that they have assembled through their online purchases. These cardboards are perfect for upcycling for kids’ art projects. However, when it comes to cutting them, parents do not allow them to use scissors or box cutters on their own.
This is why Kausi and Max have created the ‘ChompSaw,’ a kid-safe power tool for cutting cardboard and building 3D models with ease. The product works like a fast hole punch, which intercepts cardboard and chomps it off bit by bit.
The University of Pennsylvania alumni met during a Master’s program in product design. Kausi came up with the idea for Chomp Shop during one of their classes.
Chomp Shop: What Happened On Shark Tank Season 16
Kausi and Max appear on Shark Tank Season 16 Episode 5, seeking $250K for 5% equity in their company. The Sharks are wowed by the innovative kid product. The entrepreneurs then offer a sample to each one of them, who try out the cardboard cutter.
Mark Cuban is curious to know if a kid can get hurt by touching the cutter. Max shows him that it will not result in any cuts. He also tells the Shark investors that they simply need to follow the black lines highlighted on the sample cardboard. They are fascinated and prepare their designs.
Lori Greiner loves that the product allows kids to prepare anything, including a sword, a fish, and a castle. Kevin O’Leary wants to know if the founders send instructions to them. Max replies that they do offer a user manual, but their website is also loaded with special instructions.
Kausi adds that they are looking to develop a monthly subscription for cardboard projects. With it, children will receive all the materials they need to complete their projects every month. They will also follow different themes and learn many STEM concepts.
Barbara Corcoran wants to know about their target age group. The entrepreneurs are targeting kids above eight years old because of compliance requirements for children younger than that age. However, the younger ones, too, can use it under parental supervision.
Max’s son is just three years old but has emerged as their marketing star by blowing ChompSaw on social media through videos of him operating the tool. Lori appreciates that the product is taking kids back to basics, something that is required in an age where they are inclined towards phones and laptops.
Kevin inquires about the sales. Chomp Shop launched in 2023 for pre-orders only and has sold for $2.1 million through that. Mark wants to know if that is made through a Kickstarter. The company initially started through a Kickstarter initiative in October 2023 and has raised about $1.2 million since then.
They have also made an additional $1 million but have not delivered any units yet. The entrepreneurs have sold close to 10,000 units so far. ChompSaw costs $230, and they spend $73.81 on making it. Barbara feels it is a bit expensive.
They will ship the products a month after their appearance on Shark Tank. Right now, they sell through D2C only but are open to exploring other options after having enough inventory. Kevin thinks the margins are not enough to go for retail at the moment.
The duo has raised $5000 from family members through a SAFE Agreement. Kevin wants to know the valuation, but Mark feels it does not matter as the valuation is too low. Guest Shark Rashuan Williams ‘hates’ SAFE as he thinks it is terrible for investors.
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Did Shark Tank Season Invest In Chomp Shop?
Kevin is apprehensive about many things, especially regarding production and product reviews. So, reflecting this in his offer, he proposes a deal at $250K for 20% equity. Mark asks about their lead time. Max replies that right now, it is 17 weeks, which means there is a lot of work to be done.
Rashuan Williams opts out of the deal as he thinks the company is in its early stages. Barbara finds Kausi ‘rock solid’ and offers $250K for 20% equity.
Mark thinks there are production and pricing issues. However, entrepreneurs can turn it around due to their product design background. Plus, they can also get an opportunity to raise their prices and have a ton of margin. So, if everything goes well, ChompSaw can be the ‘hot product of Christmas.’ He offers $250K for 15% equity.
While the entrepreneurs are thinking about the deal, Mark says he knows it demands a lot more than what they expected to give. But ‘85% of a watermelon is a whole lot better.’ Lori interrupts and states that if they take up the deal, she will go in with Mark. This means a 15% equity split between the two Sharks.
The entrepreneurs happily take the deal for $250K at 15% equity (7.5% each for Mark and Lori).
More products from this episode! Check out other businesses that participated alongside ChompShop.
