A Glendale Heights-based startup that allows customers to create and order custom gift napkins has received an investment from Shark Tank, entering into a $150,000 equity and royalty agreement with Kevin O’Leary.
Digiwrap allows customers to upload their own images and logos to be printed online on custom tissue paper and gift bags. Prices vary depending on paper type and quantity ordered.
In addition to his 20% stake in the company, O’Leary will receive 5 cents from each wipe sold by Digiwrap and 10 cents from each bag. The deal was struck during Friday’s episode of the season’s “Shark Tank.”
Co-founders Brad Boskovic and Charlie Williams came on the show hoping to buy a 10% stake for $150,000.
They accepted the investment after much debate with O’Leary, as well as four other Sharks: Robert Hievak, Mark Cuban, Barbara Corcoran and Laurie. Their last chance to seal the deal came after Greiner backed out despite praising the personalized bags. and they provided the paper. talented.
O’Leary initially provided the team with funding in exchange for a 50% stake – too much for a startup.
They fought back by introducing royalties, which O’Leary wanted to make permanent but ultimately decided to cap at $450,000.
Boscovich said the investment will allow the company, which has six full-time employees and recently hired part-time staff ahead of the broadcast, to improve processes.
The company was founded in 2014 as a bespoke offshoot of Lingraph Services Co., the Bošković family business. The client was hosting an art exhibition event and wanted the artist’s work copied onto gift napkins within 48 hours. Boscovich worked through the night to develop a process that would allow the work to be completed within the required time frame.
“She said, ‘Everyone loves it! Whatever it costs, send me an invoice,” Boscovich recalls. “It was an aha moment. We thought this could be a great consumer product.”
When a customer that made up a significant portion of Lingraph’s revenue suddenly went out of business, the printer nearly went bankrupt. Boskovic said the company had to lay off most of its 20 employees, including Williams, a network technology expert who was an early supporter of Digiwrap.
Williams believes custom paper will be popular if it comes to market. and convinced Boscovich to create a separate company dedicated to the product, Boscovich said.
Boskovic said the product had sales of less than $50,000 when it was owned by Lingraph Commercial Printing. Digiwrap had sales of about $350,000 last year, and Boskovic said he expects the company to have at least $500,000 in sales in 2016.
“We’re already expecting it to be higher next year, but we’ll have to revise those projections,” he said. “We think we’ll take it to the next level.”
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Post time: Jun-04-2024