Photo Booth Owners Beware, Sharks In The Water

photo booth owners on shark tank

If you do not watch the TV show Shark Tank on ABC then you probably didn't know that this past Friday a portable photo booth company was on it pitching their business. With 4 of the 5 sharks declining nearly immediately they managed to hook the fifth and final one. They got a deal with Barbara Corcoran. What was the final deal, well we'll get to that.

If the deal survives final due-diligence I do believe that they could become a force in the industry with her connections and backing. Emphasis on "could" as I have my doubts.

The company Pink Shutter came to the show with a request for $300,000 from a shark for only 10% equity. That is a 3,000,000 valuation on a photo booth business that has been around less than 18 months! Wow! Needless to say the sharks didn't agree with this valuation.

Of interest in the photo booth, which was for the most part was not shown except for the popup tent and the back side of the equipment. The first impression I had was Mojo Photo Booths, as it looked very much like one. I was also able to notice a DNP DS40 distributing the prints. I suspect a low end DSLR like the Canon t3i and laptop with touch screen or all-in-one PC.

Shockingly these two pitched the booth as premium and unique yet I can list dozens of companies with pretty much the same product. Not too mention dozens more with much better looking products. Cost was their claim to taking market share, yet they said most "mom and pop companies will not do an event for less than $1,000". Wow that is a line of BS as I can think of 50+ just here in Ohio that are priced well under $1,000.

The stated financials were $195K year 1 and $135K Q1 of their second year. This is definitely possible and definitely healthy growth. But it is very short term in an industry just heating up in the past few years and poised to boil over in the next few (personal opinion).

The claim to premium equipment and a cost of $3,500 + $500 labor per booth are right in line with thousands of other booths out there. Yet this pair claims their "secret sauce" or difference is that they have cut costs. Where? My booths cost under $4k each and I bet most of the ones owned by you did to. Nothing differentiating there.

They claim 60% margins, while I operate a smaller regional company my margins are somewhat higher than this. Again nothing differentiating there.

One thing that they didn't mention was any proprietary software? I am betting that they are using one of the software offerings on the market. Again nothing differentiating.

The final deal was $300,000 for 33% equity and an even salary draw of $100/yr. Amazingly this is still a $1,000,000 valuation!

I think that once Barbara does her due-diligence she will end up walking away as this company brought nothing unique or that can be patented to the market. Their product is just another booth that blends in with so many others across the nation.

Did you watch the episode? If not you can watch it on Hulu (31:15).

What was your impression? Leave a comment below.

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