BlackDot Shark Tank Final Deal – SE16EP14

Hey, do you have any tattoos on your body? If yes, then this might be the best pitch for you till now. If not, then this pitch mu intrigue you to get a tattoo. Anyway, let’s get started:

Pitch Highlights

• Joel Pennington asked for $1.5M for 5% of the equity.
• Sharks were shocked to see the $30M valuation of the company.
• To find out how exactly the product works, click here.

The Insane Net Worth and Valuation

From the very first look of Joel, and his company logo, Blackdot, I realized that something was up. But I did not know that he would ask for $1.5M for a mere 5% of the company. Man, it may be the first time in season 16 that someone has set the net worth of his company at $30M or more than that.

If you have any such instances in mind, do let me know in the comments section. Anyway, when anyone sees this much valuation up front, they may make up their mind that the company would be booming with profit and wouldn’t be able to meet the skyrocketed demands from the customers, right?

Well, it was not the case with Blackdot, as Joel disclosed a lot of fascinating yet thrilling factors to the sharks.

So, What Did Blackdot Do?

Technically, Joel came up with the idea of selling a machine that would be self-operated. No one would be required to run it and people would choose their own sort of tattoo, color scheme, and whatnot, and the machine would do the rest.

So, this was the overall idea behind the Blackdot. However, as Mark pointed out that this idea would’ve pissed a lot of tattoo studios, makes sense right?

Joel said that the tattoo studios get a royalty for every license. The Blackdot has also created a tattoo marketplace for people where they may upload their designs. As the people use those licensed designs, the owner would get a share.

The Financial Model

From here on, it will be chaos and confusion as Kevin rightfully said this. Before starting, Daymond revealed that he had around $300K worth of ink on his body, which was quite shocking for every shark.

Nevertheless, Joel started this company back in 2019 and raised $4.5M. Till then, he worked on the tattoo machine and to this date, he has only a single machine with which, he has done over 100 tattoos.

The company; Blackdot was formally launched last year. Another unique selling point of this company was the collaboration with exceptional tattoo artists around the world.

The first one he told was Omar Tunca who worked as the best tattoo artist in Istanbul.

Then, it was the world’s number one generative tattoo artist, Tyler Hobbs, and both of these tattoo artists were available on the marketplace of Blackdot.

Coming to the cost, Joel had not done any work whatsoever. For instance, he wasn’t sure about the internal cost of making the device. First, he said it would cost around $120K and then jumped straight to $50K.

On an annual basis, Joel said that they would earn about $1M with 79% margins on their product. But in reality, as Lori said that it was all based on speculations, and not backed with actual data or sales.

Also, Joel’s plan was not to sell the devices, but rather give them on lease to the tattoo saloons and studios that were interested in them. Moreover, they have had four patents for the product, which also contributed to the authenticity of the idea.

Sharks Reaction on BlackDot

Sharks were quick to react, as none of them thought seriously about the valuation before even the pitch started. Started with Rashaun, he simply stated that the idea behind $30M was more complex than it seemed. And for that reason, he opted out.

Next up was Lori who also said that Joel was well before his time, as he first needed to make a deal with tattoo studios, create more machines, generate sales, and then ask for such valuation. She was out too.

Then came Kevin to wreak havoc on poor Joel. Kevin gave full marks for the idea, but said that he would give a negative six for presentation skills Joel did not come in prepared. With this, he was also out of the idea.

Mark, being Mark, quickly summarized and said that there was no economic benefit for the sharks with the current business model. For this reason, he opted out as well.

In the last, Daymond, being the experienced one with tattoos also admitted that the challenges are too great for a shark to solve, and hence, he was out too.

My Assumptions

To be honest, making assumptions for this company was quite hard as it had a few numbers to play around with. Nevertheless, I have done my part and below, you may find Blackdot’s financials.

Also You can Find any Business Valuation Calculator.