Apparently, sharks are no fans of vegan soup.
Washington’s own Sara Polon, aka Soupergirl, ventured onto “Shark Tank” Sunday night, pitching her growing soup business on the popular ABC show. Ultimately, she left empty handed amid questions about her margins.
On the show, entrepreneurs seek funding for their businesses from five “sharks,” or investors. Polon initially surprised the sharks by asking for $500,000 for a 10 percent stake in the business, suggesting that Soupergirl is worth $5 million.
She calmed the sharks when she revealed recent sales numbers. In 2016 the business brought in $1.4 million, she said. In 2017 that number was $2.4 million. And in 2018, Soupergirl is on track to surpass $3 million.
“The consumer demand for this product is exploding,” Polon told the sharks.
But when she admitted that in 2017 only 5 percent of the revenue was profit and that the company had more than $640,000 in small business loans, the investors grew concerned.
Flanked by her mother and business co-owner Marilyn Polon, aka Supermom, Polon explained that the low margins were largely a result of a new kitchen. When the investors asked why she insisted on doing all the production in house rather than using a “co-packer,” which would take on some of the manufacturing alongside similar products, she said that she couldn’t find a kosher co-packer that could meet her standards.
“Sarah, you are literally at risk of going out of business,” said Dallas Mavericks owner and businessman Mark Cuban. “You keep on needing cash, you are so capital intensive. Perfect is the enemy of profitability, I’m out.”
One by one, the other sharks followed suit. Investor Matt Higgins, though, was less pessimistic.
“I think we’re being way too dire about your business. I would never count you guys out,” he said. “You obviously have a sense of what it is to sell your product, but I don’t think, at the moment, it’s a big business and I could get a big return on it.”
Before Polon left, Higgins asked her to give a co-packer a second thought.
In an interview with WJW before the episode aired, Polon was upbeat about the experience.
“A lot of people have said over the years that we should [go on the show] because we have a unique, interesting product,” Polon said. “It was surreal. It was as you see on the show. You get one shot. There’s no second chance, and there’s no starting over. So it’s a very intimidating, nerve-wracking experience.”
Despite the sharks’ concerns, Soupergirl has expanded rapidly. According to Polon’s pitch on the show, the small-batch, healthy soups can be found in nearly 50 health food stores and 20 big box stores, in addition to retail locations in Takoma Park and Dupont Circle. On the show, she said the business was going nationwide through a bulk
“We’ve been on a serious warpath trying to take this company bigger and bigger,” Polon told WJW.
But even after Cuban and others warned her about rapid expansion and high overhead, she insisted that the duo would not compromise.
“The soups have to be perfect. The Soupermom and Soupergirl stand behind every unit of soup that goes out the door, and that’s never going to change.”