Highlights
- Tippi Toes is a children’s dance program founded by sisters Megan Reilly and Sarah Nuse, starting as a high school project.
- They sought $30,000 for 5% equity but ended up securing a deal with Mark Cuban for $100,000 in exchange for 30%.
- The sisters eventually decided not to proceed with the deal, choosing to retain full control of their growing business.
Overview
| Category | Details |
|---|---|
| Name | Tippi Toes |
| Founders | Megan Reilly, Sarah Nuse |
| Industry | Children’s Dance Education, Franchising |
| Product | Dance program and franchise for children |
| Funding | Secured a deal with Mark Cuban but did not finalize |
| Investment Ask | $30,000 |
| Equity Offered | 5% |
| Valuation | $600,000 |
Megan Reilly and Sarah Nuse come to episode 201 of the Shark Tank with the business the sisters started in high school – Tippi Toes. When Nuse, as a high school student, needed to earn money for a car payment, their mother suggested that the girls offer dance lessons through local day cares. The girls’ idea took off, and the business soon began to grow. In order to sustain the growth of the company, Reilly and Nuse needed a cash infusion. Will the Sharks see fit to support this effervescent business, or will they send the girls tip-toeing away without a deal?
Tippi Toes Shark Tank Recap
The sisters enter the Shark Tank seeking a $30,000 investment in exchange for 5% of their company. Reilly leads with statistics about childhood obesity and the way schools have cut recess in recent years. She explains how the program gets kids moving and provides both exercise and positive body image.
Nuse explains that they’ve sold seven franchises thus far, at $30,000 apiece, plus a monthly royalty fee. The investment covers the lesson plan, proprietary music, and marketing.
Robert Herjavec questions the profits Tippi Toes is earning. Reilly responds that they earned $268,000 in the past year, with a profit margin of $29,000. The women finance the franchises, earning interest on the franchise fee as well as the royalty payments.
Kevin O’Leary is impressed. “Forget this,” he advises. “Come work for me at O’Leary Funds. I’ll make you some real money.”
Mark Cuban asks what the royalty payment is per month. When the women reply that it’s $1,000 a month, minimum, Daymond John calls them “extortionists with tutus on,” declaring “I love them!”
Any Offers?
The Sharks are impressed with the sisters’ determined attitude and the sheer audacity of their business model. Reilly and Nuse want to produce DVDs to further enhance their program and sales. They declare that they’re “building a brand” and that they hope to produce “the next Barney.”
Daymond John tells the sisters “you don’t need me, but you’re doing great. Keep doing what you’re doing.” He’s out.
Robert Herjavec feels that the DVD business is “too far a leap,” an attempt to grow too quickly. He declines to offer a deal. Two Sharks are now out.
Kevin O’Leary offers a deal, based on his admiration for their business tactics: $50,000 for 51% of the company, but he wants to scrap the DVD idea. He wants the women to build the business. Mark Cuban believes that 5% is too small a percentage for the investors.
Barbara Corcoran agrees. She makes an offer of $60,000 for 20% of the business. Two offers are now on the table.
Mark Cuban asks for a counter offer, but says if he accepts the sisters’ counter offer, they have to accept, without negotiating further with Corcoran. Reilly offers 30% for $100,ooo. Cuban accepts. The sisters leave the Shark Tank giddy over their deal.
Tippi Toes Shark Tank Update
Tippi Toes is going strong, and has expanded, with over 10 franchises across the United States. The national exposure from their appearance on Shark Tank provided the brand with the boost they needed to grow their company. The expansion, however, happened without Mark Cuban. After several meetings and negotiations, the sisters decided not to go through with their Shark deal, preferring to retain control of their company. In the end, the Tippi Toes owners left the Shark Tank unscathed, with the exposure they needed and their company intact, un-nibbled upon by the greedy Sharks.
Like many businesses, the company and its franchisees had to pivot during the Covid-19 pandemic. The went to virtual dance classes for varying amounts of months, depending on where they were located in the country. As of August, 2022, they had 34 franchisees and they have a goal of having 50 franchisees by the end of 2023. The company has $2 million in annual revenue.
Posts about Tippi Toes on Shark Tank Blog
Know Your Numbers Like Tippi Toes
Tippi Toes Company Information
Get Tippi!
Video
Speak Your Mind