Boca Raton 'Santa' Business
Bags Shark Tank Deal
By: Marcia Heroux Pounds
Wearing an elf hat, Boca Raton business owner Sarah Blain snagged a Shark Tank investment in her personalized Santa letter business from Lori Greiner, an inventor and entrepreneur known as the "Queen of QVC."
Now Blain is working double-time with her elves at Sealed by Santa to keep up with demand.
Blain said she started the business as a hobby 10 years ago because of her love of Christmas.
Sealed By Santa offers personalized letters, a phone call and videos from Santa Claus for $10.95 — available just through Sunday — in order to deliver by Christmas.
While there are similar "Santa" services, Blain said hers offers more customization. There are choices of 12 letters from Santa, as well as extra purchases, such as an Official Nice List certificate, "magical reindeer" food and a letter from Mrs. Claus.
Blain, 34, took a deal of $75,000 plus a $75,000 loan from Greiner on the ABC-TV show in return for a 22.5 percent equity in her business. The popular program showcases entrepreneurs who make pitches to a panel of would-be investors such as Greiner who either invest in -- or reject -- the business propositions offered them.
The segment about Sealed By Santa aired last Friday, and the phone calls and emails have been pouring in ever since, Blain said.
"It literally has been a whirlwind, getting ready for California [where the show is taped.]," she said Tuesday. After the show aired, she had to deal with both soaring orders as well as a sick child.
"I've been up the entire night," Blain said.
Blain teared up during her presentation. She recalled how a Shark Tank representative telephoned in March on the very day her husband left her. The couple was divorced in July. With two daughters, Sienna, 6, and Milan, 3, to support, she focused on making Sealed By Santa a real business.
"I knew I wanted a deal, but there was only a certain percentage that I could give away. You want something so bad — it was the stress of the entire thing," Blain explained.
She has some business experience, creating the graphic T-shirt company Snobwear Clothing, a business she sold in 2005.
Blain got three offers from the "Sharks": $150,000 for a third of her company from Kevin O'Leary, dubbed "Mr. Wonderful" on the show; Robert Herjavec matched that offer, adding a $100,000 annual salary; and Greiner's offer of half loan, half investment for less equity. Blain said she jumped on Greiner's deal because she asked for less equity and has the QVC connection.
Rhys Williams, managing director of Florida Atlantic University's startup acclerator Tech Runway, said Blain was likely looking for an investor who could add significant value to her business, and "Lori has that in spades."
"When you take outside money, it is very much like getting married. They are owners with you. It's very different from a bank loan," he said.
Usually it's best to give up as little equity as possible, but there's a tradeoff in taking a loan, Williams said. "When you take on debt, they become creditors — first in line ... Lori probably did that on purpose to hedge her bet."
The other two Sharks on Friday's show, real estate investor Barbara Corcoran and Dallas Mavericks NBA team owner Mark Cuban, did not make offers.
"I have so much respect for her," Blain said of Greiner.
Before the show aired, Blain hired two more "elves" to boost her staff of 10, because she knew that companies featured on Shark Tank typically receive a great response.
She can't say how much her sales will increase because they're in the midst of taking Christmas orders. But she is pleased.
After the Christmas rush is over, Blain said she will be working with Greiner to expand her business and feature her products on QVC.