Kwame Kuadey came a long way to pitch Gift Card Rescue in Shark Tank episode 104. The small West African village where he spent his early childhood had no running water or electricity. He remembers doing homework by kerosene lantern, dreaming of bettering his life. His chance arose when he came to the United States to attend college.
While he was studying for his MBA at John Hopkins University, he found inspiration in a most unlikely place. A friend mentioned that he had several gift cards that he'd never use. Kuadey realized that his friend's problem is a common complaint. Over 8 billion dollars worth of gift cards go unclaimed each year. He came up with a solution to this problem, and with some hard work and investments from personal funds, credit cards, and loans, Gift Card Rescue was born.
Gift Card Rescue Shark Tank Recap
Kuadey is facing a problem common to start-up companies. Gift Card Rescue has grown to the limits of his personal resources. He's been operating out of his home, with his wife helping to support his efforts. While his sales are reaching $120,000 a year, his profits could increase if he had the capital to grow. The premise of his business is simple: Acquire the cards from customers wishing to cash them in for 65-70% of their face value, then resell them for 90% of their face value. He's done extensive legwork, discovering which cards would sell, and which would not, and had confirmed interest from Amazon.com in partnering with his business. Will the Sharks bite?
Kuadey comes into the Shark Tank with a request. For 30% of Gift Card Rescue, he is seeking an $150,000 investment. Without the influx of cash, he will not be able to continue his start-up. Robert Herjavec asks pointed questions about the value of the business. Kuadey responds with strong answers, stating his business' value rests upon the capital investment, the potential partnership with Amazon, and his own management skills.
Daymond John, Barbara Corcoran, and Mark Cuban all turn down the deal. Kevin O'Leary is intrigued, but makes a counter offer. He'll give Kuadey the $150,000, but he wants 50% of the business. Kuadey responds with a counter-offer of his own, offering 40%. O'Leary stands firm on his offer. Robert Herjavec speaks up, and offers to join O'Leary, adding an additional $50,000 for 50% of the business. Kuadey accepts the offer.
Gift Card Rescue Shark Tank Update
Ultimately, Kuadey decided to turn down the deal from Robert and Kevin. With the deal with Amazon on the table, and the publicity he received from being on the show, he felt that giving up a 50% share in his company was just too great a sacrifice. Kuadey's work ethic and determination carried him forward. In 2012, the company cleared $6 million in sales, and in 2013, that number increased to over $10 million, making Gift Card Rescue one of the most successful businesses ever to appear on Shark Tank.
Kuadey's confidence, determination, and cool-headed business sense are carrying him forward. When asked about the profitability of his company, he responded;
“Is it profitable? We were last year, and this year we think we still will be, but profitability is not something I sink my teeth into at this point. My goal is to invest in growing the business, so that measure is not something we are too concerned about.”
It's clear that whether Kuadey's concerned with profit or not, he's well on his way to success.