How this “inappropriate” HR manager convinced Naomi Simson to offer a $250,000 deal for mugs with the F word

A couple of years ago, Lori Phegan was leading a double life.

During the day, she was working as a human resources professional, “cautioning people about how to be” and act in the workplace.

At night, she was building a blueprint for her business The Inappropriate Gift Co, an online store selling all manner of swear word-laden products that would be hardly safe to bring into a workplace.

“I was often told, actually, that I was the most inappropriate HR professional they had ever met,” Phegan tells SmartCompany.

However, having launched an online store of cheeky homewares after first designing some one-off items for her brother’s birthday, Phegan realised shoppers were actually very keen on gifts that sit on the more risque side of things.

“You know, the majority of our products that have the C word on them are very good sellers. It’s a divisive word, but they are actually very popular. I think it’s because customers want something that’s stronger than the F word,” she says.

Now Phegan is ready to scale her business globally, after her commitment and sass scored her a $250,000 investment offer from RedBalloon founder Naomi Simson on the season four premiere of Shark Tank on Tuesday night. 

Having seen ads for Shark Tank season four entrants on the telly, Phegan decided she’d pitch her products, the likes of which include a popular mug that reads: “I’m not feeling very talky today — off you fuck”.

“I thought if nothing else, at least the people in auditions would have a laugh,” she says.

However, there was a decent amount of strategy in Phegan’s pitch for her business, which she valued at $1 million. When she approached the sharks asking for a $100,000 investment for a 10% equity stake, she’d done her homework on what the investors usually ask for.

“I remember one of the sharks once saying this show is entertainment, but at the end of the day it’s business. And so I looked over previous episodes, the questions they asked. I made sure I knew my business inside out and that I didn’t make a complete idiot out of myself, really — that was my real fear,” she says.

That attention to detail paid off in the tank, with all five sharks making pitches to Phegan, delivering praise for both her organised approach and her range of products.

The founder was also able to show her company has gained significant traction, selling more than $450,000 of products in the 16 or so months since she launched the company in October 2016.

In the end, Phegan chose Simson — the shark she went in most wanting to work with — and accepted an offer for a $250,000 investment in exchange for 25% equity. Phegan says she’s still working through conversations with Simson about the deal, but already has Inappropriate Gift Co. products stocked through Simson’s Wrapped platform.

“She [Simson] is in the gift giving business, and there’s just a lot of similarities there,” Phegan says.

Reflecting on her transition from the world of human resources to the world of sweary entrepreneurship, Phegan says her path shows how following what truly interests you can end up paying big dividends.

“At the age of 45, I have finally found something I loved doing. And I think that is the key to a successful business — doing something you actually really enjoy,” she tells SmartCompany.

Phegan has delivered the company’s strategy with help from her partner, “Budget Ben”. The couple have two young children, and while it’s a very entrepreneurial household, the kids don’t yet really know what mum and dad sell for a living.

The home office with cheeky products is shut off from the rest of the house, and while Phegan says the young ones know “we sell inappropriate gifts with swear words”, none of that bad language is allowed in the home.

“They’re really not that interested in what we do, for now,” she says.

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