Cup Board Pro: More than a Kitchen Aid
The late Keith Young along with his three children, Christian, Keira, and Kaley, hit a home run with the Cup Board Pro. Created by former NYC firefighter and two-time Food Network Chopped Champion Keith Young, this product aims to save time and prevent kitchen messes with its patented cutting board design. Small wells on one side of the board send spills directly to the plastic cup at the edge of the board, preventing liquids from spilling onto the kitchen table. It’s also perfect for collecting chopped food items without leftover mess.
The Cup Board Pro was invented in 2010, but the venture was put on hold twice after cancer struck both parents at separate times in the last decade. Unfortunately, the Young family lost its mother and father to cancer in May 2012 and March 2018 respectively. Motivated by their parents’ love and their father’s passion for cooking and the FDNY, the Young children continued to pursue their father’s dream of making Cup Board Pro a realty and pitching it on Shark Tank.
The Sharks were incredibly moved by the Young’s story and equally as impressed with the product. The Sharks see great value in the patented design, bamboo wood quality, and removable, dishwasher safe cup component. The company sold 15% (or 300 units) of their inventory in the first three weeks after the company’s online launch, showing some initial demand and marketing success. What’s most impressive to the Sharks is that the Youngs are operating the business entirely on their own; executing sales, the marketing campaign, and distribution from their living room.
After briefly deliberating amongst themselves, the Sharks respond to the Young’s $100k for 10% equity offer in unique fashion. All five Sharks agree to counter the Young’s original offer by asking for 20% equity. Furthermore, all the Sharks agree to donate any profits they receive from their equity stake to the FDNY Foundation supporting NYC firefighters affected by 9/11 cleanup-related health issues. The Young’s immediately accept the Sharks’ counter and exit the Tank with a future for Cup Board Pro and an even stronger foundation for Keith Young’s legacy.
Cup Board Pro was a no-brainer for the Sharks. They all acknowledge that their expertise and networks can easily sell the remaining 1,700 units in inventory. Furthermore, the Young’s story, commitment to the business & FDNY Foundation, and Keith Young’s ingenious design is a near perfect recipe for continued sales and growth. Cup Board Pro’s $12.50 per unit cost will certainly go down as the company’s production volume increases, and the $40 retail price is in line with similar products.
The $1 million valuation wasn’t totally unreasonable, but a bit too high for the Sharks at this stage in Cup Board Pro’s life. If we annualize the company’s $12,000 in sales, the Youngs valued Cup Board Pro at a 7x EBITDA multiple ($1 million/$143k annualized profit = 6.99x). Agreeing to a 3.5x multiple is a win for both parties; the Youngs keep 80% of a promising product and the Sharks receive an attractive entry point in a straight-forward business they know they can grow and scale. The Sharks’ extra 10% will go a long way for the FDNY Foundation down the road.
Getting Cup Board Pro into every kitchen in America will take massive marketing and sales efforts. All five Sharks, especially Lori, will be able to use their expertise and distribution connections to help the Youngs grow efficiently as they enter new markets and tackle the challenges that come with scaling. Outside of sales, marketing, and Cup Board Pro’s valuation, my only critique is for Keira, and it’s very nit-picky – easy on unnecessarily using the word “like” when answering questions. She’s the youngest so I’ll give her a pass.
Finally, I cannot stress enough how important the Young children are to this product. The product and its story combined can capture audiences from all sorts of backgrounds. But the key ingredient is the Young’s determination and ability to battle through adversity. The fact that these young adults managed to launch this product and immediately produce sales only three months after losing their second parent to cancer more than proves how strong and resilient they are. Those traits alone will help them through the trials and tribulations ahead, but the love for their parents and father’s legacy will be the never-ending fire that fuels them to success in all that they do. The Sharks will sleep a little easier at night knowing that Cup Board Pro is in good hands.