In Shark Tank India’s latest episode, an entrepreneur from Delhi pitched her home decor brand ‘Chokhat’. With a vision to build India’s version of IKEA, she asked for Rs. 50 lakh in exchange of 7% equity, valuing her business at Rs. 7 cr. Prachi also shed light on the difficulties of bringing about her business into the market. The entrepreneur, who recently married, said that she was a one-man army in the initial years of business and got nasty looks from people who thought she did all the manual work. Prachi also admitted that she made no money in the first year of operations because of no sales.
Prachi said that she had invested a bare minimum amount into the business, and set up her website with Rs. 15,000 rupees. She also added that she only had two employees, and is paying them less than Rs. 15k a month, which irked Anupam Mittal. The Shaadi.com founder questioned her team management skills, stating, “You’re paying them below minimum wage.”
Prachi’s business problems
Prachi admitted that she needed guidance in several departments of running a business. Aman Gupta also admitted that tea management is the hardest thing he does, saying, “I have 10,000 employees now, and I can tell you how difficult it is.”
Prachi also told the sharks that she had been duped by vendors in the first few years of operations, as her designs were copied and sold to rivals. She further added that she had now chosen vendors carefully, and even gotten them to sign NDAs. The entrepreneur also revealed that selling goods on Amazon did not work out for her because the return rates were too high. To this, Vineeta alleged that she was not adapting to change. “Agar aap customer se dushmani karengi, toh aap kabhi ghar-ghar nahi jaa payengi ( If you make enemies with your customers, then how will your product become a household name).”
Sharks feedback
Kunaal Bahl and Vineeta also told Vineeta that her business was too nascent to invest in when she gave them a graph of her finances. Prachi earned Rs. 4.5 lakh in second year of operations, and is targeting Rs. 1 cr in revenue this year. She also told the sharks that wanted to increase the reveneue to Rs. 6 cr in the next three years by diversifying other home decor items. While Peyush Bansal seemed impressed, Anupam was the first to make an offer. He asked for 3% in royalties, but Prachi declined saying that she will not agree to these terms.
Final deal
In return, Peyush appreciated her negotiation skills and offered to join Anupam in the deal. Prachi then added that she was not keen on negotiating very much, which amused the sharks. She made a counter offer, which Vineeta called quite fair, and both Anupam and Peyush agreed sealing the deal at Rs. 30 lakh for 10% equity, Rs. 20 lakh in debt for year at 10% interest.
