From $400 Investment to $1.6 Million Valuation, The 'Shark Tank' Success Story of This Baker Couple

The best approach to wow the investors on "Shark Tank" is to offer them some amazing food, according to Saphira and Maurizio Rasti. The Costa Mesa, California-based couple made an appearance on the show with treats from their company, Nowhere Bakery. They only had $400 when they opened their bakery in March 2020 before the Covid-19 pandemic. They were surprised to receive an offer that valued their business at $1.6 million.

Delighting the investors with tasty treats

The investors were thrilled with their brownies and cookies and were surprised by how delicious they were. During the episode, Saphira clarified that their candies are perfect for anyone on a paleo diet because they don't include common allergens like dairy, eggs, or gluten. Their bakery was inspired by Saphira's dietary requirements. "This tastes like a real cookie," Barbara Corcoran said, and Kevin O'Leary praised them, highlighting how uncommon it is to find plant-based cookies that are actually tasty.

The Rastis offered five percent of Nowhere for $200,000. Their lack of a physical store during the pandemic is reflected in the name of their bakery. Saphira prepared sweets in the kitchen of a friend and brought them to clients, many of whom found Nowhere Bakery on social media. Nowhere was using a professional kitchen at the time of filming. In 2022, they brought in $770,000 and generated $32,000 in profit. By the end of 2023, Saphira is expected to generate $1 million in revenue.

Navigating challenges with investor concerns

Kevin O'Leary first voiced concerns regarding the profit margins of Nowhere Bakery. He mentioned that the pair might be able to increase their revenue by working with a co-packer instead of continuing with their current arrangement in a commercial kitchen. In response, Maurizio acknowledged the possibility but underlined their desire to keep control over the quality of their product. Saphira agreed, emphasizing how crucial it is for them to be in charge of the process. O'Leary continued raising the matter despite their position and made an offer of investment subject to certain requirements. He expressed his intention to distribute their products in major grocery stores under the Nowhere brand. He offered $200,000 in exchange for a 20% stake in the company. Additionally, he planned to introduce them to a specific co-packer and would give that co-packer half of his equity.

“Every food product [founder] I ever had that went into a co-kitchen came out of the kitchen and did it themselves again,” she said. “Co-packers never work for them.” Two of the other investors, Mark Cuban and Lori Greiner, did not extend any offers “It tasted amazing until I looked at the back,” Cuban said. “Now I’m going to be in the gym for 17 hours tonight. One cookie is 300 calories.”

Guest judge Jason Blum, CEO of Blumhouse Productions, chose to accept Kevin O'Leary's offer during the discussions, dividing the money and ownership evenly. Seeing that having two Sharks on board would be beneficial, O'Leary agreed to this.

Advice from Barbara Corcoran

Barbara Corcoran stepped in with some sound advice for the Rastis. Her investment experience included a cautionary story about a firm named Kate's Kookies, which failed after the creator stopped being actively involved in the kitchen. Being present in the baking process is crucial and Corcoran warned that a bakery could suffer if its employees leave the kitchen too soon. She advised the Rastis not to rush into stepping away from this crucial aspect of their operation.

Negotiating and accepting the deal

The pair made a counteroffer in response to Corcoran's guidance, indicating that $200,000 would be exchanged for a 12.5% share in Nowhere. After accepting this deal, Corcoran valued the business at $1.6 million based on estimates from CNBC Make It. Saphira expressed their excitement about securing a deal with Corcoran while Maurizio added that it was now time to expand Nowhere Bakery's reach.