Tipsy Elves started out as a fun side business by two good friends, Nick Morton and Evan Mendelsohn. They made holiday sweaters but stood out with their unique designs. The two gentlemen had no idea it would become a hit, let alone land a deal with Robert Herjavec of Shark Tank. As of 2024, Tipsy Elves has a market cap of $20 million.
The people behind the company
The business duo currently lives in California, USA. Nicklaus Morton holds a Master’s degree in Endodontics and Evan Mendelsohn holds an MBA in Finance. They also studied Psychology and Business Law in the past.
As an endodontic student, Morton completed his dental residency at the University of Florida. After law school, Mendelsohn worked as a paralegal at Sheppard Mullin Richter & Hampton LLP.
Evan later rose through the ranks at the same firm to become a contract attorney, specializing in corporate transactional law. Nicklaus also became an official endodontist at his private practice, EndoCareGroup. The two were fraternity brothers and knew each other.
The Birth of a Drunken Elf
At one point early in his career, Mendelsohn realized that law wasn’t what he wanted to do long-term. So he started working part-time as an online search engine optimization (SEO) expert. While working there, he discovered that “ugly Christmas sweaters” was a popular search topic on Google.
So he called Morton and asked him to teach him how to design clothes using Adobe Photoshop, and together they created a playful twist on the traditional American holiday sweater as a side project.
After creating the website, Nick and Evan launched their first line of ugly Christmas sweaters in 2011. In the first year, they made over $800,000 in online sales, half of which came from Amazon. These numbers inspired the founders to quit their day jobs to focus on their startup.
Appeared on Shark Tank
Tipsy Elves headlined the Shark Tank holiday special in 2013. Nick and Evan entered Shark Tank asking for $100,000 in exchange for 5% of the business.
Their pitch started with a fashion show. Nick and Evan asked their friends to demonstrate their product, and the sharks were all smiles. Although it was fun, not all celebrity investors thought this business idea could make money.
Nevertheless, Kevin O’Leary made a proposal: he would receive a $2 royalty for each sweater sold until he recouped his initial investment. Then, the royalty would drop to $1 per sweater. However, Robert Herjavec proposed a better deal, investing $100,000 for a 5% royalty, and the entrepreneurs accepted the offer.
The drunken elf after Shark Tank
Although Tipsy Elves’ early sales were impressive, they struggled as a business when they appeared on Shark Tank. Their partnership with Herjavec has taken them to new heights, and it has now become one of the most successful Shark Tank products of all time.
To address the seasonality of their business, they began making tacky sweaters for different occasions. In addition, they have designed other clothing such as pajamas, adult onesies, and dresses. Tipsy Elves is now one of Robert Herjavec’s best investments on the show. In 2019, they revealed that they had made over $125 million in sales! As of 2024, retail sales have now reached $317 million!
The company currently has annual revenue of over $10 million and is valued at $20 million. The founders also do charity by donating a portion of their profits to cancer programs and Toys for Tots.
Categories: Shark Tank
Source: svlsf.edu.vn