SUGAR Cosmetics co-founder and CEO Vineeta Singh is in the news for calling out an entrepreneur for not respecting cash in a recent episode of Shark Tank India season 4. Prasanna Vasanadu, the founder of kids' healthcare brand Tikitoro, came on the show to pitch her business.
Vasanadu mentioned she noticed that there are not as many products for kids in the age bracket of 3-6 as there are for babies, which prompted her to start Tikitoro. The founder sought a funding of ₹25 lakh in exchange of 0.5 per cent stake in her company, taking the total valuation to ₹50 crore.
During her pitch, the Tikitoro founder also mentioned that she is projecting ₹17 crore revenue in this year but is still burning money.
She also said that she has not raised any capital as of yet, while adding she and her husband have invested a total of ₹14 crore in the business and are ready to spend another ₹5 crore.
When asked why has she invested so much money in the business, Prasanna said she spent around ₹6.5 crore to buy inventory due to a shipping crisis that impacted her business adversely. Despite this, she mentioned that her business fundamentals are improving.
Singh begged to differ and said the cash that was used to buy inventory is blocked. “Keeping 12 months worth of inventory in a business like this is suicide. All of that is cash that is blocked. This means there’s a lack of respect for cash.”
Upon learning that Vasanadu spends around ₹20 lakh per month on freelance consultants, Lenskart's Peyush Bansal asked her to hire people who are hungry to learn instead of going for the fractional ecosystem.
"Second, you need someone who can discipline you. You have a cash pipe that you’re utilising, but you need somebody to make you accountable. I don’t think your husband is making you accountable today.”
Emcure Pharmaceuticals executive director Namita Thapar offered Prasanna ₹25 lakh for 1 per cent equity along with a guarantee that she will achieve her target of ₹17 crore revenue for the year. Thapar also demanded 0.5 per cent in royalty until she recovers her principal amount. At the end, Prasanna went with Namita's offer.