Transcript

00:00 Next into the tank is a product to take your victories to the next level hello sharks. My name is matt walsh and I am addicted to winning and I'm dax holt and I fully support his addiction and we are here seeking six hundred thousand dollars for eight percent of our company trophy smack. Over 50 million americans pour their hearts and souls into fantasy sports every year for a chance at victory. Friends battle it out for months on end smack talking one another investing ridiculous amounts of time and energy for the winner to walk away with what empty bragging rights a generic little league trophy. I don't know about you sharks but when I win I want everyone to know and that is why we created trophy smack the best place to get the most unique and customizable fantasy sports trophies blinged out rings and over-the-top championship belts. I mean imagine walking into your next draft party with this bad boy in your shoulder. So it's super simple you go to our website. You choose your sport then your size and your color. There are literally thousands of trophy combinations to choose from to create your very own dream trophy. So we understand how important winning is here inside the tank. So we went ahead and we custom designed trophies for each one of you sharks so go ahead and unveil the greatness next to you wow.I like mine a golden slipper a bull and bear stock market baby wall street. I actually like the one. I already have that's in my office. How did you guys come up with this. So it happened in the most organic way credit card out looking for something awesome. I'm in the finals. I'm the new guy in the league with all the dad friends and it didn't exist so just joking with the guys hey guys. I wanted to just get a six foot trophy and I wanted to write it in like a pony to show you guys how much. I obliterated you all but since it doesn't exist. I have to start my own. I don't get why that doesn't exist. I have ordered trophies for my business. My whole life every type of trophy why couldn't you use a regular trophy house. What's the difference here so the trophies that exist today. Just sort of that same antique looking yeah with the guy with the hot you know yeah yeah. Everyone was kind of selling the same thing so when we came out of the scene we were the first company where we had the ability for someone to change their colors on the fly change. The sky on the floor did you design it. We designed everything so what are your backgrounds.

02:44 Professor of mine gave me invaluable advice. He said matt if you want to be a really successful entrepreneur. You need to get into supply chain and logistics to really figure out how businesses operate and how they function and execute so first job out of college. I took a job at a freight brokerage. I rose at the top of the company in two years. Wow. I was the number one salesperson in the company. It brings up a good lesson for people whatever you're doing be the best dad because once you're the best at something every door opens up and then you learn where you can be a great entrepreneur so good for you for focusing on being great at what you did absolutely. My background is completely the opposite.I come from tv and film doing entertainment news. Tmz how much did you invest in this business to get it going we. We invested uh 250 000 wow that's a lot of money. Why do you have to invest that much to get this going yeah. What is it you spent your money on so in the beginning we started small. Initially it was a 60 000 injection um and in the first three weeks of getting into the fantasy football draft season sold out of everything what's the average cost. The average price is about 150 160. What does it cost you to make it our average. Profit margin is 80 80 percent can you walk through the revenue growth first year what you sold what you made so uh year one. January 2018 we uh we did eight hundred and fifty thousand. Dollars thank you for your first year. Wow did you make what did you make on the 850. We the first year we had about a 200 000 net that we just rolled right into inventory okay and then next year 19. Year two uh 2019 we did 1.9 million dollars wow okay and you made blood. On that we had 775 000 uh gross profit and we netted around 500. In this year what are you going to do year to date so in spite of the pandemic our. Uh revenues year to date are up over last year. We've done 650 000 dollars in revenue. So far. The opportunity for us is a lot broader than fantasy so corporate awards employee recognition. There has to be a ton of competition in that space a ton. There's a reason why no one in the trophy awards space has really taken a national approach on e-commerce. The traditional way of building trophies is is crazy. The assembly process in our first year assembly was more expensive than cost of goods the way that we developed our columns. The assembly time was cut down by 90. Now. I get it you're a logistics guy yeah.Everybody else in this space can't do what you do because anybody else who would take years to get up to speed to where you are correct yeah okay guys. So I i really respect people who play sports people with sports fans. I kind of respect them fantasy guys so let me tell you a story. I was trying to date this really hot woman. I realized she never had a date on sunday because these morons were so busy watching sports so no matter where I was at in the world. I would make sure that I got to new york on sunday to take out this smoking hot woman and I remember her telling me you know. I really don't like guys who like sports because you know. I I'm alone on sundays and I said I will never watch a sports game my entire life if you marry and I'm married. Now that's awesome.

06:08 I'm out thank you guys luck. I'm going to make you an offer. I'll give you 600 000 for 25 of the business and my value is to try and work it into the corporate market which isn't that easy oh wait wait a minute. What do you want the money for and what is it that you need. We're looking for a strategic partner right. We don't want to just continue doubling. Every year we want a 10x matt what would the strategic partner bring you so whether it's opening up the doors at arenas um for uh products within the stadiums. Right commemorative rings are you here just for cuban. I think so no we are not what do you want to do mark. What is mark doing so guys. I mean. I like what you're doing. I like the fact that you're hustlers right and you're looking to touch all the pieces and you're just following the money. The question is eight percent isn't enough. I'll make you an offer. I'll offer you the six hundred thousand dollars. But I want 17 percent appreciate. The offer thank you very much. It's either a yes or no because no I'm gonna make you an offer. There. You go then. I'm out oh that I'll tell you my offer. Let's take a deal. Let's go.Next into the tank is a way to make home brewing simpler. Hey sharks I'm aaron and I'm brett and we're from boulder colorado. We are asking for 500 000 for 2 in our company. Ouch wow who doesn't love sipping on an ice cold craft beer am I right but the reason why beer lovers everywhere aren't making their own beer at home is because it's not as easy as it looks. No. It takes tons of time experience expertise and the worst part is you can spend weeks on a single batch of beer and they can come out terrible that's why we've revolutionized the craft beer making process taking home brewing out of the basement and turning beer lovers into beer makers introducing beer mate beer maker. This is the world's first all-in-one countertop craft brewing appliance that anybody can use all right sharks. Aaron and I are going to quickly walk you through a demo of this product just to show you how easy it is to use first thing you do is you take your maker kit you connect the bag into the machine open it all up pour in your grain. The next step you do is basically fill the entire machine up with water close. It all press the button on the front and over the next 24 hours beer maker is going to bring up the temperature inside the machine mashing those grains in liquid and creating wart which is a sugary liquid. Next you get a notification on your phone and it says it's time to pitch your yeast so open the machine back up you pull out that basket of spent grain you then put in your yeast you put in your hops close. The machine back up press the button on the front and again over the next five to seven days. Beer maker is going to perfectly control the pressure and temperature inside the unit finally when that process is complete you get another notification and saying it's time to tap your beer. So you remove the bag of clean fermented beer bring it over to your beer tap which is included in the package simply install the bag of beer inside the beer tap screw in the co2 cartridge that comes inside your maker kit and about a day later you're drinking cold carbonated fresh delicious craft beer that you made yourself wow it was nine days till. I got a beer right. It depends on the recipe so each each different do you see any problem with that.No no no no. I mean. It's craft beer kevin okay. I guess it is worth 25 million so before we jump into the valuation question. Do you guys want to drink some beer. Yes another question how many beers will you get out of it so beer. Maker makes a 12 pack of beer and the maker kits themselves cost 15 so starting at the lightest. That's our future ipa that has a little bite to it. It does. I like it thank you so the next up we have our ghost wheat which is a classic american style wheat beer. So next up. We have our redwood ipa and that's a classic west coast style ipa. I'm going to give this ipa a 9 out of 10. Thank you thank you and the only reason it's not.A 10 is the arrogance of your valuation. We'll get to the error promise. We'll get there kevin. Now we're on chubby kevin. They named this one after you. That's me.

10:50 I really like this one guys how did you get into the business in the first place. So first and foremost we love beer. I was a home brewer for 15 years and you know honestly. We met at cornell brett and I were in the business school together and we started the company in an entrepreneurship class at cornell and it was for home brewing temperature control devices. Your cornell mbas yes sir so break down the numbers for me sure so this costs us 375 dollars to make and it retails for wait wait. Wait wait cost you 375 for all in all the pieces yep including the first one batch of consumables yes delivered to your home. You sell it for 4.99. How can you sell it so cheap. There's no that's no margin so we have right. We have two revenue streams. One is the replacement of consumables and all that we want to do is. We make sure as we get as many machines out as possible and build up. So we're going into the consumables exactly yep yep. Exactly so the consumable side of things.It cost us nine to ten dollars per um ingredient kit. At scale. We can get that down to seven dollars per kit is this subscription just reorder. We're encouraging our users to go into a subscription okay. What's my monthly cost for subscription 15 per 12 pack. What is your retention rate of the subscriptions. So we're not there yet. I mean you're not selling any of these yet so we are shipping them. Nba dudes. I'm going to punish you. We did our kickstart in 2018 and we're delivering those 1200 units. In the next two weeks. How many of you shipped so far we've shipped about 24 of them. So. I should pay a million bucks per unit. You ship. I'd just like to point out ahead. You shipped 50. Then you'd be worth 50 million. How much money have you raised. We've we've raised about three million dollars so far what valuation depending on the round between five and ten million. Just makes no sense to me you. It's like coming in and asking us to believe in the fairy godmother. You have virtually no sales. You have three million dollars put into it already uh and you have no proof of concept. Even I i must be missing something basic. But I'm out we did have some proof of concept. When we kickstarted. We sold a thousand of these things in one month um and this is like nor have you gotten the feedback. Honestly you know to barbara's point. The problem for me here is everything tasted really good but because you haven't had that in consumers hands and I don't know what's gonna happen.

13:21 I can't invest at this point. I'm sorry. I'm out look what what you're setting out to do is right on sure. The challenge is your margins because you're gonna have to to really retain people and I think that's going to be a lot more expensive and even if the valuation is in the realm of where you're at it's going to be hard to generate enough profits to give me a return and so for those reasons. I'm out well to address those particular points out address it with other strategies. Let me tell you this first of all one. One piece of advice is when you come in the tank you have to make it attractive for us to make some money yeah when you come in here and you save five hundred thousand dollars for two percent. Five of us got turned off so for me valuation very competitive and we don't know what we don't know for those reasons. I'm out kevin. I'm a reasonable man and and I've missed. I would like to give particularly for entrepreneurs that at the end of the day the product is excellent. You have not heard. Anybody. Say this beer isn't great absolutely and I consider myself a connoisseur of all things with alcohol.In them. My inner instinct is to eviscerate you but I'm not going to do that because I think it's so interesting so how do. I encapsulate this ridiculous valuation but still be royalties. Now let me show you how to do it. No royalty at all. Okay no royalty. I just take what I do in the wine business and apply it here five hundred thousand dollars. It's debt. I'll do it at nine percent. I told you 36 months straight debt which you can afford if you believe your numbers okay and I want four percent equity. You can figure out stay out of the capital give them to me advisory shares. I would do that deal and you should seriously consider it because you're not going to get a deal from anybody else. There's an offer what do you want to do well would you be able to go for 2 percent with the debt. I'll do it at 3. I'll meet you in the middle. I have an mba too. Unfortunately we're really worried about the working capital implications of that.I don't want to fight with you about valuation. We're never going to agree so kevin. Let me give it a crack five hundred thousand dollars and nine percent is three thousand seven hundred and fifty dollars a month you guys feel. You can cover that that's not that's just a lot of money we yeah. We could cover that the problem though is after we're done paying that back we have had to pay back five hundred thousand dollars plus nine percent over the years yes right so in which case it's we're still you have a partner that millions of people know and trust in these beverages. If you don't want to do.

16:07 It don't do it. I'm afraid that we're not comfortable with the dead. I'm okay thank you. I'm out all right first. In the tank is a product that brings all the conveniences of your kitchen to the great outdoors. Hi sharks. I'm taylor. I'm ron. My name is kobe and we're from grand junction colorado and we are seeking 250 000 for 10 of our company that will revolutionize the outdoors forever have you ever unpacked your campsite and realized you forgot. Something important like salt oil or a spatula does your picnic cable look. Like this well. I we were so sick of disorganized camping. It was frustrating so we came up with this idea that there has to be a better way which is why we created tailgate and go tailgate. Go is a portable modular outdoor kitchen and dry box that you can take anywhere camping fishing tailgating any outdoor adventure. It starts in this simple box. Most of our attachments fit inside the box. The modular design enables you to put the attachments in any tin locations around the box. This patented modular design enables 360 degrees of function and versatility.Oh wow wow it has everything you need from your kitchen at home. Even sinks nice tailgate and go is a one-of-a-kind product. There's nothing like it in the marketplace but in order to be a success we need your help to reach our full potential so sharks. Let's all think outside the box and start an outdoor revolution good. Job guys cool really cool. How'd you come to invent this. We went camping we're sitting there searching for a spatula for 30 minutes. We're arguing. So we finally just said hey let's go home and invent this so we get home and just all. The ingenuity just came really between the three of us of what do you need a necessity in your kitchen.How long ago was this one year so. This has only been on the market recently year and a half wow how much does this go for retail well. There's three different models. The first model is the full-size model and it costs about 1 500. Our second model is the overlander and it sells for around 1 400. Oh and we have a brand new model and it's about 1 000. How many of you sold we have sold over 100 boxes. We've only gone to six trade shows. What does it cost you to make so for our full-size model 748 to manufacture our second model costs about 728 to manufacture and our riverbox costs 500 to manufacture and where do you make these everything we make is in colorado right. Now so two questions okay one. What does it weigh 75 pounds on the large box 55 on the small box okay and then we have new products coming where when they're in plastic. They're gonna be much lighter. So what does it cost to ship that then uh around 120 150. Do you have any patents. We have two patents. They're both provisional utility patents on the railing here how we can put everything in the slots on aluminum and what's most important roto mold plastic guys. These aren't cheap to build particularly when you're starting and making mistakes and iterating.

20:06 How much money have you invested. Have you raised any outside capital. No so what we did. We took our savings we got two. I got 250 000 invested in this entire process. We're real tight with the money and one of the reasons. We're here is because we don't want to make a mistake at the first the product. Why is this business worth two and a half million dollars. You know. I have to ask that question yes doing it in the nicest way. If I don't like the answer. Then things get ugly with the patents that we have there is no other product like this and I feel we have this window to take over the whole outdoor. I don't think I like that answer enough we need to scale this puppy. We need to scale it fast what is the 250 going to be used for inventory product before you said you could bring the cost down by going to plastic including the entry level unit of a thousand so is that you're bringing that down to one price oh yeah our cost on that is around 748. We can bring that down in the 300 200 range so you're retailing it for we're completely in colorado right. Now so we could get those prices down even in america. But you know beating. Colorado is not a bad thing but first let me say this you know there's an old saying necessity is the mother of invention.Yes. You guys had a problem. You came up with a solution. You turned it into a business. You saved your money to be able to do it yourself without any outside help. Right. You are the american dream. I mean that's incredible that's the good news yeah right. The bad news is. I don't glamp. It's it's just not a fit for me so for those reasons. I'm out but congratulations guys. It's just awesome awesome awesome what you've accomplished you know. I don't know very much at all about tailgating. I always like to kind of know.What's the landscape before. I invest in something. That's so at the beginning stages and so for those reasons. I'm out in the last six months we've tripled our sales. We haven't even gotten out there. Yet. You know. I look at this and say the proof is in the fact people bought it. But you're not worth 2.5 million dollars so that was a big ask. I love the patent stuff and all that right. This is a cash flow business. In other words. It sucks up cash because you build inventory so here's an idea. I'm just throwing it out. There this kind of fits in my chef wonderful world. Although I hate camping if I don't have a mint on my pillow. I don't sleep that's how it works you need a line of credit. Here's an idea you can consider it. I'll give you the 250 line of credit. I want a 10 percent interest on it. I want the 10 percent equity because somebody buys you out and I want a 100 royalty per unit against the I 250. Hear any other offers. Kevin didn't give you the fine print. The royalty is forever.

22:58 I know that guys. I could blow this up so big on social. I'm just worried. You can't do the orders. I mean. I got millions of followers well that's why we need sharks.I know just to jump in. I understand this market. I have the ability to talk to the customer that you're targeting because I'm vice chairman of miami dolphins. I spend my sundays at nfl. Games. We have the largest privately owned soccer tournament in the world and I know how to talk to the sports customer that you're looking to go. After what concerns me is that when you're looking at avid fans they are so vested in their own setup that I'm just not convinced that there's enough customers out there to make that a very big market and for that reason. I'm out oh matt. I think this would be perfect for you. We could take this to the college football levels to nascar because people love their tailgating as you know and when they have a custom box that's whatever football team that you like that's a pride thing they live it. You know what you have the gift and the curse of.I think what all of us have up here as entrepreneurs. When you first start you want to be everything to everybody and when you say there's nothing else out there on the market that makes you want to keep improving it. I think you're going to burn a lot of capital trying to keep improving and that's where I'm scared so. I'm out to me. I think you're actually just here a little bit early. I mean if you had validated a little bit well then and there's still mr one. There is mr only sharks that believed in you. We're gonna take it to the end. We just wanted some help scaling sourcing marketing. You need bigger distribution plans. That's today that says okay. Let's make this happen and are you saying no to my offer basically in a nice way. I am saying no to your offer in a nice way. Then there's nothing more to do here respectively. Can.I just say we've worked our asses off to get here every day working so hard so just my dad and being here with my brother. I'm so lucky yes. I agree. We've been working so much for so long towards this goal just to be here. Today it feels like we're champions already okay okay. Thanks for your time guys congratulations great experience. Very cool you did a great job you guys could have countered. It doesn't hurt to ask. Four sharks are out. The johnson family rejected kevin's offer of 250 000 as a line of credit for 10 equity and a royalty of 100 per unit sold of tailgate and go you guys could have counted. It doesn't hurt to ask. We would go 250 000 for 15 percent. How do I get my royalty. How do I get my cash back. The you're gonna get your cash back as soon as we get these boxes.It's never just cost of capital as you grow. I'm a shark I've been doing this for 10 years. This business it will consume millions of dollars. It's not a horrible thing if you can manage it but the thing you won't have just so we understand each other is you won't have me and I'm mr wonderful and I can take this on social to the moon. They'll be setting these up on the dark side of the moon if I get involved. But that's my whole point oh my lord can we have one second can we talk quickly go talk yep. You think you could sell this on the dark side of the moon yes matt so let me give this straight. Let me give this straight everybody's out but kevin but you're giving a counter to matt okay matt. What do you think about 250 000 at 20 my concern is similar. I don't want to wait to get my you know. Cash back is just sitting there hoping for an exit. I'm not sure how big the business is going to be so. I need a way to get my capital. Back would you consider like a small royalty or something on each box. Royalty did I hear royalties. I will cut my royalty down to fifty dollars a unit which is very reasonable. Your margins are okay right and then you have a deal and you have a shark and I get behind it on social. We blow it up but even if I get behind it. I'm going to get you more orders than you can feel like you see now. I feel like. I have to go. I have to save you. Here's what I'll do 250 000 straight equity for 20. Let's say we'll do 50 royalty until I get 1x back and that's my best offer how much equity are you taking. I'm taking twenty percent you ready pig. I don't think that is greedy. It's outrageous. I bring a ton to it. You're stealing from this family. No. I'm not. I'm helping this family. I'm protecting his family from you okay okay okay matt. Let's do your dude. Let's do your deal back out back in back out back. All right now matt. What's very important. Here is now that you've learned how to structure deals for mr wonderful. I will be sending you an invoice that's crazy that's awesome you.