Is crowdfunding better than a Dragons’ Den deal? Why ForeverSpin’s deal fell through

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Financial Post | Mary Teresa Bitti | November 19, 2015

ForeverTop

Each week, Financial Post contributor Mary Teresa Bitti revisits CBC’s previous week’s episode of Dragons’ Den. She captures what the cameras didn’t and in the process provides a case study for readers, zeroing in on what pitchers and dragons were thinking and what the challenges for the deal are going forward.

The pitch The student edition of Dragons’ Den featured a range of pitches from Canada’s next generation of entrepreneurs, with everything from sauces to therapeutic clothing to a sophisticated take on a classic toy, the spinning top.

Nostalgia certainly played a role in Viktor Grabovskyy’s pitch for his then one-year-old business, Toronto-based ForeverSpin spinning tops. The University of Waterloo computer science and business major impressed the dragons with his vision to make what has been described as the world’s oldest toy popular again.

CNC, or computer numerical control, machined and manufactured in Toronto, ForeverSpin tops are made from what the company claims are the purest metals and alloys in the world, sourced largely from Canada. These include titanium, tungsten, copper, aluminum, bronze, nickel and brass, and even gold-plate. Each of the 15 tops (10 metals and five finishes) come with a lifetime guarantee. “Where most companies focus on spinning time, we focus more on simplicity, style and quality,” Grabovskyy said.

See:

Tyler Anderson/National PostForeverTop's founder Viktor Grabovskyy with one of his company's spinning tops.

He and business partners Ruben Gonzalez and Cristobal Uribe hit on the idea to help finance an analytics startup. “We quickly realized we didn’t have the capital to fund and sustain a software development company,” says Grabovskyy, who took time off from school to focus on ForeverSpin. They had already created and sold a few niche products that had proven profitable. In 2013, they launched a crowdfunding campaign to better learn how the platform works. They raised $15,000 in one month.

“We brainstormed more ideas for products that could act as a revenue stream for our company. and started talking about what’s nostalgic, what people would appreciate seeing again. All of us remembered the first toys we played with were wooden spinning tops. That’s how it started.”

Their first Kickstarter campaign for ForeverSpin in February 2014 raised $130,000 from 2,500 customers. By the time he entered the Den, ForeverSpin had generated $1.1 million in sales largely from crowdfunding campaigns, which accounted for between 65 and 70 per cent of revenue, its website and a retailer that partners with Amazon.com.

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