Tipsy Elves started out as a fun side hustle by two close buddies, Nick Morton and Evan Mendelsohn. They made holiday sweaters but made them stand out with unique designs. The two gentlemen didn’t expect it to be a huge hit, let alone close a deal with Robert Herjavec on Shark Tank. As of 2022, Tipsy Elves is worth $20 million.
About the Founders
The business duo are based in California, United States. Nicklaus Morton has a master’s degree in endodontics, and Evan Mendelsohn has an MBA in Finance. He also studied psychology and business law in the past.
As an endodontics student, Morton did his dental residency at the University of Florida. After finishing law school, Mendelsohn worked as an associate at Sheppard Mullin Richter & Hampton LLP.
Evan was later promoted to contract attorney in the same company, specializing in corporate transactional law. Nicklaus also moved on to be an official endodontist at his private practice, EndoCareGroup. The two knew each other as fraternity brothers.
Establishing the Company
At one point early in his career, Mendelsohn realized that law wasn’t what he wanted long-term. So, he started working part-time online as a search engine optimization (SEO) expert. As part of the job, he discovered that “ugly Christmas sweaters” was a trending search topic on Google.
So, he called Morton to teach him how to design clothes using Adobe Photoshop. As a side job, they worked together to put a hilarious twist on the traditional American holiday sweater.
After launching a website, Nick and Evan launched their first ugly Christmas sweater collection in 2011. In the first year, they made over $800,000 in online sales with half of it coming from Amazon. These figures inspired the founders to leave their day jobs and focus on their startup.
Shark Tank Appearance
During the 2013 Shark Tank Holiday Special, Tipsy Elves became the star of the show. Nick and Evan entered the Tank, asking for $100,000 in exchange for 5% of their business.
Their pitch started with a fashion show. Nick and Evan asked their friends to model their products, and they got a lot of smiles from the Sharks. Though it was fun, not all celebrity investors found this business idea to be profitable.
Nevertheless, Kevin O’Leary made a proposal: $100,000 for a royalty of $2 per sweater sold until he recoups his initial investment. Then, the royalty will drop to $1 per sweater. However, Robert Herjavec offered a much better deal, investing $100,000 for 5%, and the entrepreneurs accepted the proposal
After Shark Tank
Though their early sales were impressive, Tipsy Elves as a business were struggling to get by during their pitch on Shark Tank. The partnership with Herjavec took them to new heights and are now one of the most successful Shark Tank products ever.
To fix the seasonality of their business, they started making cheesy sweaters for different occasions. Plus, they designed other clothing items, such as pajamas, adult onesies, and dresses.
Tipsy Elves is now one of Robert Herjavec’s best investments on the show. As of 2019, they revealed they done over $125 million in sales!
The company is currently making $6 million in sales annually, with a net worth of $20 million. The founders also make charitable efforts through donating some of their profits to the Stand Up to Cancer program and Toys for Tots.