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Linsey Fuller and Lili Yeo spent their careers in the fashion and apparel business working for big-name corporations before deciding to start their own company, Goumi. With a focus on infant and newborn apparel and accessories, Goumi offers mittens, booties, and sleepers that utilize a two-part closure system. This keeps the products safely and securely on the baby, preventing them from scratching themselves or losing heat from their extremities. With an upscale vision, Linsey and Lili are looking for a Shark that can help them to expand their product line by investing $1,000,000 in exchange for 8% equity in their company.

Goumi currently sells its product through wholesale distribution (80%) and direct-to-consumer (20%) through boutiques and Amazon. They project to close this year at $2.5 million in sales. Although the Sharks like the look and feel of the product, they are greatly concerned about the valuation given that they only have $5.8 million in lifetime sales. They have inflated their valuation which never wins favor in the Shark Tank. The Sharks are also concerned about the price tag of the product. Although it is not necessary to mark their products up so much, Goumi chooses to sell their product at a premium price. This creates an affordability issue for the average family.

Because they feel that the product is grossly over-priced, the valuation of the company is way off, and the marketing does not adequately portray the benefit of using their product, many of the Sharks decline to make Goumi an offer. With only two Sharks left, Daymond John and Kevin O’Leary both decide to extend offers to Linsey and Lili. Daymond offers to invest $1,000,000 in exchange for 30% equity. Kevin O’Leary offers to provide Goumi with a $1,000,000 loan at 9% interest for a 10% stake in the company. Although they have a current loan for a lesser interest rate that they are not drawing off, Lili and Linsey are hesitant to give up as much equity as Daymond has suggested. They accept Kevin O’Leary’s loan offer.

If you were a Shark, would you invest in Goumi knowing all of the reservations that the Sharks had? Do you think they made a wise decision to go with the loan from Kevin rather than a straight cash infusion from Daymond? Start the conversation in the comments below.