We felt so fortunate to be given the chance to go on the Dragons' Den. It was nerve-racking to be on national television but within a few minutes everything fell into place and it became a true pitch to investors. The Dragons gave us the time to share our story and because we had shared it with other investors prior to going on the Den, it was actually quite seamless. We had momentum going in but we also believed the more strategic partners we had, the quicker the business could develop and grow. The clout of the Dragons and their fame in Canada resonates with consumers and retailers.
In the next month, Awake Chocolate will be in about 18,000 stores across North America and our goal is to be in 25,000 stores by the end of the year.
We asked for $200,000 in exchange for a 20% stake and received offers from four of the Dragons before accepting a deal with David Chilton and Kevin O’Leary. Kevin opted out during the due diligence process because the terms of the deal changed but we closed a deal with David.
Due diligence is different for each of the Dragons. The head of O’Leary Ventures, Alex Kenjeev, met with us immediately after the show. For about an hour we discussed where we were with other investors, and what the shareholder agreement was. From there, the process began. We shared our vision, financial projections – the whole investor package. David does all of his own due diligence. It was the same process, the same information, but it was a little less formal. We closed the deal with David within a couple of weeks of the on-air pitch. With that deal in place, we spent the next several months prior to our February 2013 air-date getting as much distribution as possible in Canada so that when the episode aired in February it would be on store shelves and people could buy it. The timing was just right. Working with David is fantastic. He is among the sharpest people we’ve ever worked with and he is as hands-on as we need him to be.
In the next month, Awake Chocolate will be in about 18,000 stores across North America and our goal is to be in 25,000 stores by the end of the year. We’ve passed the $2.5 million mark in sales; things are progressing well. We’re excited about the future.
How It All Began:
Dan Tzotzis, Matt Schnarr and Adam Deremo, longtime friends who built careers at Kraft Canada and Pepsico, decided over lunch one day in October 2010 to go into business together. There was no specific idea and no plan but they knew they wanted to create an opportunity for themselves that would draw on their collective 35 years of experience in the packaged foods industry. After months of brainstorming they hit on an idea: they would create Awake, a chocolate bar that delivers 140 milligrams of caffeine. Functional foods have really taken off in the past decade but they hadn’t seen anything in this category that used chocolate and tasted good. Using Mr. Tzotzis’ home in Stoney Creek, Ontario, as their test kitchen, they brought in another friend with expertise in building chocolate manufacturing facilities to cook up the right formula for a great-tasting chocolate that also provided the pick-me-up of caffeine. By early 2011, they started working on their business plan and reached out to their networks, senior people in marketing and management, who provided expertise and access to investors – and Awake took off from there.