Investor: Barbara Corcoran | Shark Tank Appearance: April 22, 2011 | Deal: $50,000 for 25% stake | Results: Sales skyrocketed from $27,000 to $5 million
One Saturday afternoon, five years after Kim Nelson pitched carrot, red velvet, and lemon cakes on Shark Tank, she stands in the Pauline, SC commercial kitchen of Daisy Cakes, meticulously sifting powdered sugar for flawlessly smooth frosting—no bumps or bubbles allowed. Reflecting on her journey since securing Barbara Corcoran as investor and mentor, Nelson notes that landing one of the show's best deals across eight seasons didn't mean she could slack off, even on weekends. "The lengths we go to are ridiculous," she says, "but we want customers to love every detail—from taste to packaging—and relive nostalgic bliss with that first bite."
Yet, mastering cake batter doesn't prepare you for business hurdles.
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Pre-Shark Tank, Nelson sold 2,000 cakes over two years. Post-episode, she hit that volume in 48 hours. Corcoran sourced a high-volume bakery in Savannah, Georgia, to scale up. "I loved our new baker," Nelson recalls, "and they loved us. Everything seemed perfect."
Then came QVC. The bakery dropped them after launching its own cakes there, sparking competition. With Corcoran's help, Nelson partnered with a Bronx, New York bakery and a Long Island distributor near QVC. On November 30, 2011, 5,000 cakes sold out in eight minutes, prompting a quick re-invite. Success?
Not quite. "We ran out of money," Nelson admits. "Flat broke." Despite stocking inventory, QVC's 60-day payment terms clashed with holiday demand. The startup trap of growing too fast struck hard. Desperate, she borrowed $50,000 from friends and family for ingredients to fulfill Christmas orders. "It was the most desperate I've ever been," she shares, "my worst decision ever."
Overcoming that, quality issues hit: Bronx cakes looked and tasted subpar. Nelson sent replacements plus freebies, but sales halved.
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By summer 2012, she switched to a Nashville, Tennessee bakery with distributors in Maryland (East/Midwest) and Kansas City, Missouri (West). Early 2013 brought disaster: sugar bloom ruined a 6,500-cake order, costing $150,000 in inventory and $310,000 in sales.
Corcoran insisted: return production to Pauline's original bakery, built by Nelson's father. "Bigger isn't always better," Nelson agrees. "We're small-scale; every handmade, hand-wrapped cake is a labor of love. Volume doesn't cut costs."
"We want customers to love every detail about our cakes—from taste to packaging—and have an eye-rolling moment of delight with that first bite."
Today, Daisy Cakes bakes 20,000 cakes yearly across seven ovens with six full-time staff, plus Nelson and her 83-year-old mom since day one. New minikins—8oz jar cakes—are a hit. A 2018 cookbook looms, alongside franchise dreams. "Cakes must be baked our way here in Pauline," she insists, "with love, passion, and strict rules."
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This article originally appeared in the August 2017 issue of SUCCESS magazine.
