Oct 10, 2024
The Pitch Deck
The "Best Pitch Ever!" On Shark Tank With Haven
Summary
Market Potential and Product Strength
Haven Lock's wedge-based barrier makes doors 10 times stronger against break-ins compared to traditional deadbolts, addressing a significant home security need.
With over 115,000 schools in the US, Haven Lock's ability to secure classrooms in under 1 second presents a massive market opportunity in the school security sector.
Financial and Operational Challenges
Haven Lock's smart lock has a 50% profit margin ($349 retail, $175 COGS), while the mechanical version has a 55% profit margin ($82 retail, $67 COGS), indicating potential for profitability but also pricing challenges.
The company has achieved 250,000+ total sales but faces inventory constraints as its primary obstacle to scaling, necessitating investment in supplier relationships.
High production costs for initial units (first 2,000 locks) compared to projected costs for larger batches (10,000-20,000) present challenges in scaling and achieving long-term profitability.
Timestamps
00:00 Haven, a smart lock company founded by former Army pilot Alex Belli and COO Clay Bakes, seeks $500,000 for 6% equity after personal experiences with neighborhood break-ins.
00:41 Haven's innovative door security system significantly enhances home protection by using a wedge-based barrier that makes doors ten times stronger against break-ins.
02:47 Haven showcases resilience and determination in a memorable Shark Tank pitch.
03:29 Haven offers two innovative home access products, a mechanical version priced at $182 with a 55% profit margin and a Bluetooth version at $349, while holding a patent in the UK and pending in the US.
04:27 A new security solution for classrooms allows teachers to lock down rooms in one second, addressing safety concerns in over 115,000 schools nationwide.
05:01 The company has achieved over $250,000 in sales, raised $1.5 million, and secured a significant order for 94 classroom locks from a school in Arkansas.
06:00 Investors express concerns about poor margins and inventory challenges, leading to multiple rejections despite interest in the product.
07:22 Entrepreneurs seek mentorship and distribution support while emphasizing their commitment to solving a significant problem despite facing challenges.
Transcript
00:00 Next into the tank is a product to keep Intruders out hi sharks. My name is Alex belli and I'm a former Army Special Operations helicopter pilot and the CEO of Haven. The world's strongest Smart Lock and my name is Clay bakes. I'm the COO of Haven. We're from Nashville Tennessee and we're seeking $500,000 in exchange for 6% equity in our business sharks not long ago clay and I both experienced a series of break-ins in our neighborhoods. In reality.
00:41 A break-in occurs every 18 seconds here in the United States. We quickly realize it doesn't matter if you lock your doors or not. The traditional deadbolt just isn't getting the job done let me show you. This is your standard deadbolt while it may feel secure when you lock it an experienced Intruder can get in in about five kicks. Alex show them how easy this is come on Alex kick. It hard come on Alex. Alex come on. Al kick it how much you sell the Deadlocks for look like we don't need to buy this product. Oh hey. There go get mad and actually a Breakin occurs every 18 seconds. The door knobs about to fall oh yeah that's persistence are you okay. This isn't going well are you. Typically a Breakin can happen in less than 2 minutes in the United States. One in 36 homes in America will have a Breakin smart locks based at the deadbolt are no better Alex sure we're going to show you how works as you can tell I'm not an experienced Intruder I'm good okay. Let's show them how Haven Works clay yeah. Haven sits at the bottom of the floor right next to the existing threshold when activated. The wedge based barrier lifts up using simple physics. This makes your entire door 10 times stronger to preventing home break-ins to use it you simply step on the gate to open the door to shut the door. You lock it with the gate with the foot pedal and you can see there's no dead bolt here right. So Alex. Here K show them how it goes do the fly kick.
02:47 Alex all right sharks. No finally got it that's right baby. We don't give up all right. That's right. We don't give service absolutely God Haven is still standing strong. We've got some demos. We'll show you Alex you've just gone down in Shark Tank history. You will be memorialized for connected version. Mark. You okay hell yeah. Here you go cool all right. I'm going to grab a quick drink of water clay once don't you start so sharks.
03:29 We've got two products that we manufacture. We have a Haven mechanical Mech that you have on this side. We have an electronic controlled one and Mark's got it down here on this side. It's got a key fob just like you have with your car. It also has a smartphone app where you can share e keys. I would be able to send you access to my house schedule that I would get notification when you come and go. What is each cost so our cost for the mechanical only one we sell it on our website for $182. It cost us $67 to make it our landed cost is $82 our profit margin on that is 55% what about the Bluetooth version. How much the connect version we sell for $3.49 on our website right. Now cost of good sold is $175. Wow that's a lot think we can get that down. It's our our first batch of production. At that cost do you have a patent issued on this year. Yes sir we just got issuance from the UK we're still pending in in the US.
04:27 There's nothing like this that's on the floor floor and that stop somebody enter actually cover the entire door and for sliding doors so could you do it at the top. Yes ma'am. So that's the other exciting thing. We want to tell you about is due to recent current events. Schools started approaching us to put this in individual classrooms. Huge Market. There's over 115,000 schools in this country. This is to protect the classroom from anybody getting in our plan is to lock down a classroom within 1 second and give teachers access and give uh security resource officer SWAT team access to the it's actually a really good idea that's a great idea.
05:01 I don't think you told us what our your sales were okay. So so far. We just crossed the $250,000 Mark of of total sales where are you selling them we sell online on our on our own website. How much money have you raised and how much debt do you have we've raised 1.5 million. That's a lot wow and how much debt do you have if any we have uh two uh investors with a convertible note debt of a total of $500,000. There we go are you two. The sole owners 25% each and then we have investors on top of that with additional Equity to sell so the school situation. What is it that you have underway with schools tell them about the purchase order we got in Arkansas so in in Melbourne Arkansas we installed three locks about a month ago they had an open house. The parents loved it. The next day I got a call from the superintendent and said I've got 94. Classrooms left to do in this school. I want to put in an order that's a big order. They order they order 94 yes ma'am what are you going to do with the money.
06:00 Sure so our biggest problem is inventory. Simply so we're going to use part of your investment to go out and scale inventory with our suppliers. Guys look I think what you've done is brilliant. Mark let's let's do a deal but the challenge is the your economics are awful. Your margins are awful to support what you what you need to. We're just starting our manufacturing. We have made 2,000 locks and got those into the customers we paid way over for those first 2,000. We're not going to pay that for the next 10,000 or the next 20,000 I think you're going to have a pretty hard time figuring out how to get the scale and figuring out. What works and what doesn't I don't want to be part of the journey. I'm sorry I'm out thank you for. I think you have a huge mountain to climb and something that I don't think we'd get our money back so for me. I'm out thank you Barbara thank you very much appreciate your time pitch yeah guys. I just think it's going to be difficult particularly from a cash flow perspective. It's going to take you raising your price. You know to generate the margins until your costs come down and even then the margins just aren't. There guys how about sure I think this is really smart. The problem for me is I like to really understand a product when I invest in it and you might be too early. I can't invest at this point. So I'm sorry. I'm out thank you very much for your time. You know what come on Dam. Let's do a deal. I'm very interested in it.
07:22 But sometimes it's it's what's in the best interest for the entrepreneur. Too. I can give you a shark deal. Then you may have to raise more capital and then you get diluted or give them some to start with what do you want let them decide. The only reason we're here is to get one of you on this team to guide us to Mentor us to get us into distribution opportunities and help scale our cost down. We want you on this team you're not going to like what I'm going to say because me taking more of the company. Then you own is not in your best interest and I need you to be a little selfish for yourself. So I'm not going to give you an offer. I'm out thank you. Damon thank you sharks good luck guys congratulations. I am definitely a customer though this isn't our first objection and it's not going to be our last. But there's a problem out there worth solving and we're going to keep going after it. We're going to continue on uh. The the team follows the motto that I lived in the Army. We're never going to quit. We have paying customers out. There not only residentially but commercially and we're going to keep going.