26 Jul Built to Sell Radio: The Inside Story of Petco’s Acquisition of Shark Tank-Featured PupBox
Like many young couples, Ben & Ariel Zvaifler got a puppy and found themselves trying to figure out how to train it. They wondered what toys were safe and what kind of food to give to their brand-new puppy.
The couple figured they weren’t alone and decided to launch PupBox, a subscription box for new puppy owners that offered owners training guides, treats, and toys for puppies appropriate for their age and stage of development. The company captured the imagination of the producers at Shark Tank, who invited them to appear. After a rigorous vetting, Shark Tank star Robert Herjavec offered to invest $250,000 for a 15% stake in PupBox, which was doing about half a million dollars in subscription revenue at the time.
The Zvaifler’s took the money and invested in marketing to grow the business which was thirsty for cash. As they burned through the Shark’s money, they decided to look for a strategic investor who could fund their growth. They approached Petco, who looked at their business and decided to make an acquisition offer instead.
In this episode, you’ll discover:
- The difference between growing through organic vs. paid search.
- How PupBox lowered churn.
- Why The Zvaifler’s turned down Herjavec’s request for a board seat.
- Why Ariel’s second child was the trigger she needed to start documenting her Standard Operating Procedures (grab The Definitive Guide to SOPs here).
- The surprising reason shorter subscription terms may yield lower churn rates.
- Why around half of Shark Tank offers made on the show never close.
- How to guarantee you get the budget to hit your earn-out.
- Why asking for a Vice President title at your acquirer’s company is important.
- A layman’s definition for “unit economics” and “convertible notes”.
- Why the Zvaifler’s were surprised their Petco stock became valuable.