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00:00Tonight on Shark Tank.
00:02Hey, sharks.
00:03We're here to solve a big problem.
00:06Today, we're fishing for sharks.
00:08I knew it!
00:09I don't like your approach.
00:10This isn't the direction.
00:12Cut the throat, man.
00:13For me, there's a huge elephant in the room.
00:15Are you losing money?
00:16Yeah.
00:17How much?
00:18Uh, depending on the month, some between $40 and $50,000.
00:20What?
00:21What a head-squeezer.
00:22This story's getting better and better.
00:30First in the Tank is a cosmetic company for an underserved market.
00:45Hey, sharks.
00:46I'm John.
00:47And I'm Devere.
00:48We're from New York, and we're seeking $600,000 in exchange for 5% of our company strips.
00:54Oh, God.
00:55Do you know what everybody in this room has in common right now, besides being on television?
00:59We're all wearing makeup.
01:01The chances are the women are fine applying and wearing makeup, but most men aren't nearly
01:06comfortable enough to admit or use it.
01:08Sharks, this happened to me on the day of my wedding.
01:11The greatest day of my life, and I woke up with a zit.
01:14And not just any zit.
01:15As you can see, I mean, this thing was the mother of all zits.
01:18Okay?
01:19It was a volcano.
01:20It was just waiting to erupt.
01:21Yuck.
01:22And while there were makeup artists there at the wedding, I was too embarrassed to do anything
01:26about it.
01:27And so my blemishes were there to stay for the thousands of photos that were taken that
01:31day.
01:32Every guy has an experience like this, whether it's a first date, an important pitch, like
01:36here on Shark Tank, or just coffee with a friend.
01:38When you look your best, you feel your best, which is why Strix is changing the way that
01:42men can instantly fix their appearance with, you guessed it, it's makeup for men.
01:47Strix is the first company ever to engineer cosmetic and skincare products with completely
01:52custom formulations and packaging geared towards men.
01:55We launched with a sleek, discreet, and very sexy concealer tool and a tinted moisturizer.
02:00And since then, we've launched seven products at the intersection of cosmetics and skincare,
02:05so that you can instantly fix your appearance, including our energizing eye tool and our beard
02:10and brow gel comb.
02:11So Sharks, who's ready to join us and show the world there's nothing wrong with
02:16handsome?
02:17So we don't have pens in front of you, it's actually our concealer tool.
02:21So if you take a look there.
02:23So we have it designed as a pen so that it's sleek and discreet.
02:26So this is just a concealer?
02:28Correct.
02:29So let me start at the beginning.
02:30What does concealer do and what are you supposed to do with it?
02:33So the formulation is made so that if you want to cover up a pimple, if you want to cover
02:36up dark under eye circles, you just dab it on and you're done.
02:39So you don't need a primer, a foundation, a sponge, a brush, a setting powder.
02:43It's made to be as easy as possible for guys to cover up any problems.
02:47And with the concealer tool, we found out one of the best uses for it that guys were using
02:51it for is for dark under eye circles, like under eye bags.
02:54And so that's what led us to launch the energizing eye tool, which is also in front of you.
02:58It tightens the skin underneath the eye, so it's meant to reduce fine lines, wrinkles,
03:02and it's really an anti-aging type of product.
03:04But how are you supposed to even know how to do it?
03:06Like, to me, it's like warping, you know?
03:08You just like see a streak.
03:09I mean, now what?
03:11Mark, really?
03:12So that's a huge thing that we need to work on as part of this brand is education around
03:17these products.
03:18Good job, Mark.
03:19I actually use a product like this all the time.
03:21Of course you do.
03:22I don't sleep enough, so I get really bad guys.
03:24There's lots of products, eye creams, everything.
03:27That are made for men.
03:29Correct.
03:30You're saying you're a brand new category.
03:31What's the brand new category?
03:32Nobody's approached the cosmetic category from this angle.
03:36Like for me, when I was younger, I was bullied out of my middle school because I put gel in
03:40my hair, and that hit my confidence for years.
03:44People bullied you because you put gel in your hair?
03:46Yeah.
03:47Oh, yeah.
03:48I had the same thing.
03:49Seriously?
03:50Why this?
03:51I mean, were you guys chemists?
03:52Were you guys in this industry at all?
03:53So, no.
03:54So when we first started, I partnered with two professional makeup artists.
03:58They helped us really be able to formulate the first ever really cosmetic products for
04:02men's skin as opposed to women's.
04:03So what had happened was is I raised half a million dollars to start.
04:06You what?
04:07Before I raised half a million dollars to launch the company.
04:10Who did you raise it from?
04:11Friends, family, and then connections.
04:13How much of the company did you give away for the $500,000?
04:17So at the time, we raised at about, you know, a $1.5 million valuation.
04:23How long ago was that?
04:24That was back in 2018.
04:26Okay.
04:27And now you're at a $12 million valuation because you have amazing sales.
04:30What are they?
04:31So this year, we're at about $130,000 in sales.
04:34That's it?
04:35Per month.
04:36Per month.
04:37Per month.
04:38I knew it!
04:39Right.
04:40What's lifetime sales?
04:41About $2 million.
04:42$2 million?
04:43Okay.
04:44How are you selling $130,000 a month?
04:46Well, a big one is D2C, e-com retail, our own site.
04:50So we're about 95% D2C.
04:52And then last year, we launched in CVS nationwide.
04:55We're the first men's cosmetic brand.
04:57I'm amazed you got to CVS.
04:58Good for you.
04:59For us, retail is really a validation point.
05:02In CVS, we actually sit in the shave aisle.
05:05We're not in a cosmetic aisle.
05:06We're not in the women's aisle.
05:07So we wanted to show these products can be normalized.
05:10What do you sell them for?
05:11What's your average selling price?
05:12It's around $30.
05:1385% gross margins.
05:15So why the value?
05:16I mean, because you do understand that there's probably a family that risks it all.
05:21And they just need a shot.
05:23And you know you took that space from them by standing in a car.
05:26That's not fair to do that, right?
05:27Every entrepreneur wants a shot, right?
05:28So let me ask the question.
05:29A $12 million valuation?
05:30Yeah.
05:31Look, if it's going to be worth $200 million in three days, then it's cheap, right?
05:34But let me ask a different question.
05:35That's a different question.
05:36It may be worth crap in two days.
05:37Yeah.
05:38Well, so is every company facing that.
05:39So let me ask a question.
05:40Oh, you're going to give a $12 million valuation, Mark?
05:41So will you raise that much money and give away basically a third of your company at
05:45that point?
05:46Sorry, I didn't hear that, Mark.
05:47Are you saying when you raised the half a million, you gave up one third?
05:50It was a little bit less than that.
05:51We have raised more since then, actually.
05:53Oh, that's what I was getting to, right?
05:54Yeah.
05:55So how much do you guys own right now?
05:56Between the two of us, we own a little bit more than a third of the company.
06:00Okay.
06:01So that's why you need such a high valuation because if you're asking for that much money,
06:04that's the only way you're going to retain any equity.
06:06Oh, my God.
06:07So the total raise from beginning was how much?
06:10Historical, right around $1.5 million total raised.
06:13Wow.
06:14Okay, and if you do this run rate right now at $130 a month, that's about $1.5 million
06:18in sales for this calendar year.
06:19How much are you going to make off that?
06:21We are non-net profitable.
06:22Everything we're making is going right back into marketing, growth.
06:26Are you losing money?
06:27Yeah.
06:28How much?
06:29Depending on the month, somewhere between $40,000 and $50,000.
06:31Okay, so let's ask why.
06:32Mark, this story is getting better and better.
06:34So let's find out why, right?
06:35Because the margins are huge.
06:36Yes, 85%.
06:37So if you're burning that much cash, you are spending it somewhere.
06:41Yeah.
06:42Advertising or?
06:43Yep.
06:44It's marketing primarily, but we're expecting to see 5 to 6x return on the acquisition cost
06:49now.
06:50For sure.
06:51Why did you guys decide to go to retail?
06:52Because that takes a lot more capital in order to drive sell through, whereas direct
06:57to consumer, you can get a return on ad spend and see it directly.
07:00Correct.
07:01So why did you make that choice?
07:02I like the retail strategy, Mark, because I wouldn't know about the product, but if I go
07:05to a CVS in the shaving aisle, I'm going to see the product.
07:08Yeah, but that's so expensive.
07:09It's also very validating.
07:10Our number one competitor is the stigma here.
07:12So for guys to see these products right next to other brands that they know and love and
07:16have used.
07:17Yeah, but I'm not saying that's wrong, right?
07:18But one of the biggest things I try to teach my entrepreneurs is conserve your cash.
07:21Yeah.
07:22Because stuff happens.
07:23Yep.
07:24And so you're going to have to raise more than this $600,000 too.
07:27So now you guys are going to have to give away 10, 15, 20% of your 33% and then you guys
07:34are going to end up with nothing.
07:36For me, there's a huge elephant in the room.
07:39And that is that this packaging tells me nothing about your product whatsoever.
07:43And Strix, the name.
07:45I have no idea it's makeup for men at all.
07:47So you could probably be selling so much better if those things were clear on here.
07:53And for those reasons, I'm out.
07:55I'm out.
07:58The valuation is a little high.
08:00I'd really rather work with people who needed a little bit more, not second raise in and
08:05all that kind of money.
08:06This is just not a business for me.
08:08I'm out.
08:11I love the category.
08:12I mean, I think it's been due for a long, long time.
08:15But I don't like your approach.
08:18You try to hide the fact that it's makeup a little bit.
08:21I think you got to own it more because that's the only way you're going to change hearts and
08:25minds.
08:26If you can convince bro culture to do it, you change everything.
08:30I would take a completely different approach.
08:32You know, you guys have made your choices.
08:34So for those reasons, I'm out.
08:37Thanks.
08:38I'm not going to tell you how to run your business.
08:39I expect you to do that on your own.
08:40I'm just an investor.
08:42When I see a good idea, I like it.
08:44I don't like your valuation.
08:45I don't think you're worth 12 million bucks.
08:47Okay?
08:48Sorry, I just don't.
08:49Oh, I think there's a royalty coming.
08:50Yeah, I think so too.
08:51There may be.
08:52Because I understand your issue around your capital needs.
08:55If you're getting into retail with CVS and others, you're going to get POs and it's
08:59tying up the capital.
09:00The more you grow, the more capital is tied up.
09:02So the way I'm going to structure my offer is I'm going to give you $300,000 as a factoring
09:06loan.
09:0736 months, 11.5%.
09:09Okay?
09:10Go.
09:11The other $300,000 is equity for 2.5% and I'm putting a royalty on it on per package
09:16of two bucks until I get my $600,000 back because you can afford it.
09:20And then it drops down to 25 cents in perpetuity, which is nothing.
09:25But I'm part of the game.
09:26Kevin, I think you actually hit a new low with this offer.
09:30Not only are you being a loan shark, you're also adding a royalty to it.
09:36Yeah.
09:37I think this is the first time and equity.
09:39Listen, it's an offer.
09:40I don't hear any others.
09:41What's your offer?
09:42Three sharks are out.
09:55John and Devere have an offer on the table from Kevin for their makeup brand for men,
10:00Strix.
10:01But Robert may also be interested.
10:03Not only are you being a loan shark, you're also adding a royalty to it.
10:08Yeah.
10:09I think this is the first time.
10:10And equity.
10:11What's your offer?
10:13Yeah, I think Kevin's double dipping on his offer with you guys.
10:18Sounds like triple.
10:19Or quadruple.
10:20You've heard a lot of negatives about what you could do better.
10:23But the one thing we can't argue with is the sales.
10:27Yeah.
10:28Whatever you're doing, it's working.
10:30My advice would be, this isn't the direction.
10:33The guy on this picture is already buying makeup.
10:37You've got to get somebody like me, and I think you could do really, really well.
10:41Is there an offer in all this verbiage?
10:43I mean, we'll take compliments as well.
10:45We take feedback and compliments.
10:46I think the scariest thing about his offer is, when you have a royalty in perpetuity, who's
10:51going to buy that company?
10:52Right.
10:53Right.
10:54You've got to do an equity deal.
10:55I'll give you the $600,000 for 10%.
10:59Ouch.
11:00I think getting a shirt can really help you with the platform.
11:03What an interesting dilemma you have.
11:05Robert, would we be able to meet in the middle at seven and a half?
11:10I want to stick to the 10%.
11:12I'm in this.
11:13I don't want to go in for a short time.
11:15I don't need a royalty.
11:16I'm in it for the long run.
11:18We're going to build something, and let's go for it.
11:24Mr. Wonderful, we really want to be on the wedding platform of love.
11:28Because the wedding story, this is great for grooms and groomsmen.
11:33But, Robert, you got a deal.
11:36Hey!
11:37Hey!
11:38Good job, guys.
11:39I would never make fun of you for wearing gel.
11:42What's going on with that?
11:43Time to change it.
11:44I wear some gel.
11:45Oh, that was a great job, guys.
11:46Really, really good job.
11:47Good job, guys.
11:48Congrats.
11:51You know, we really, like, had reasons we wanted each of the sharks.
11:54Robert's the most handsome, though, and he's going to help us show everybody there's
11:57nothing wrong with handsome.
11:59Men on makeup, it's like years ago when Botox was a taboo.
12:02Now you mention it in No Way Listen Eyebrow.
12:05One of the worst jokes.
12:12In season 10, Kelsey Moreira pitched her edible cookie dough company Dope and left without
12:17a deal from a shark.
12:18It's not something that is a healthy enough option for me.
12:21Let's see what she's up to now.
12:23It was pretty crushing to leave without a deal that day, but I did take away a little
12:27nugget of advice from the sharks.
12:29I made a portion controlled product called Dope Drops.
12:33Dope was created after I made the amazing decision to get sober.
12:36I rediscovered my love of baking and really who I was.
12:39I pitched to the sharks to open up a new brick and mortar store in Las Vegas.
12:43Though I didn't get funding in the tank, I found some outside capital and I was able to open up that store.
12:48In 2019, I did $1.2 million in sales.
12:51Then the pandemic hit and if you fast forward to 2020, we did $2.7 million in sales and $2.5 million of that was online.
12:59So it made the most sense to close our brick and mortar storefront to focus entirely online where our mission can reach more people than ever.
13:06We just rolled out at Costco and Walmart and we are live at Harman's New Seasons and Foxtrot.
13:12Edible dough and you can bake it.
13:15We recently aired on QVC and it went so well that they're bringing us back later this year to show off our Dope Drops.
13:20You're going down the wrong path, you go, you know what, I'm going to return to a passion of mine which is baking.
13:25Way to go, woman.
13:27My sales when I pitched to the sharks was around $800,000.
13:30Four years later, our lifetime sales are $9.4 million.
13:35Now I'm happily married and I'm going on seven years sober and we started the Dope for Hope initiative.
13:41Dope for Hope has donated more than $60,000 working to break the stigma around mental health and addiction recovery.
13:47I want to make sure that if there's anybody out there who is struggling, reach out for help.
13:52There is a lot of joy waiting on the other side.
13:55What we're doing at Dope for Hope and the messages that I get from customers are exactly what fuels me to fight another day and reach more people and hope that we can change more lives along the way.
14:17Next up is a product to make water sports more comfortable.
14:30Hey Sharks, my name is Wes.
14:31And I'm Greg.
14:32We paddled up the coast of California to see if you want to take a bite out of our company, Drifline.
14:38We're here today seeking $100,000 for 10% equity in our company.
14:43Drifline is a revolutionary water sports apparel brand based out of San Diego.
14:47We're here to solve a big problem.
14:49See, a couple of years ago during a Dawn Patrol surf session, it was that transitional time of year where the water was just too warm for a full wetsuit and too cold for your traditional board shorts.
14:59A net liner?
15:00The people even still wear these things.
15:02They're insanely uncomfortable and don't provide any warmth or protection.
15:05There has to be a better way.
15:07And that's why we created Drifties.
15:09Drifties are the premier two-in-one board short with a patent-pending wetsuit liner connected to a stylish outer shell offering comfort, warmth, and chafe protection specifically designed for water sports.
15:22And we've all seen that guy at the beach doing the classic waddle toward the excruciating pain of chafing.
15:27But with Drifties' cloud-like wetsuit liner, we solve that problem while keeping you warm and supported.
15:33Drifties have been tested by almost every water sport athlete out there.
15:36They've also been tested in the most extreme conditions all over the globe.
15:41And remember, you never want to swim with sharks without your Drifties.
15:45Good job, guys.
15:47So each of you has a pair of Drifties in front of you.
15:49It feels like a neoprene. Is it a neoprene?
15:51That's what it is.
15:52Neoprene is a rubber foam that basically stores heat and prevents that initial cold shock that you see going on.
15:56The cold shock that you see guys get when they first step in the water.
15:59So basically, it's a wetsuit married to board shorts.
16:03Correct.
16:04We combine the two.
16:05Hadn't really been done before, actually.
16:07Yeah, we actually have applied for our utility patent on it and hopefully to get it in the next couple months.
16:11It seems really smart to me.
16:12I mean, I will tell you, it's really great quality.
16:14Tell us about your sales.
16:15Currently, year-to-date, we're actually at about $125,000 in sales.
16:19Last year, we did about $100,000 in sales.
16:21And we're projected on pace to do about $200,000 this year.
16:24How are you selling these?
16:25Direct-to-consumer?
16:26Do you put them into specialty stores?
16:28So right now, we're actually 99% direct-to-consumer.
16:31Are you spending a lot of money to get people to your site?
16:34Actually, not really.
16:35This past year, we only really spent about $10,000 in marketing.
16:38What does it cost?
16:39Sorry, you never told us.
16:40Yeah.
16:41So those retail for $89, it cost $25 to make, 33 landed.
16:45I'm surprised.
16:46I mean, that's not bad at all.
16:47Not bad at all.
16:48This is complicated.
16:49Yeah.
16:50Well, that's why we went through so many different manufacturers and iterations to get the real material and product we need.
16:55And is your history in manufacturing?
16:57No, actually, I had a sales and marketing background.
17:00I actually was taking night classes for graphic design, which is my full-time now, and that's kind of what spawned the idea.
17:06When we had that legitimate light bulb moment on the beach, I needed a project for school, and I was like, well, let's just, you know, see if I can brand this.
17:13That's great.
17:14And by the end, we actually had a business.
17:16And you did it.
17:17What's your background?
17:18So I'm actually a financial background, and now I'm more in tech and marketing sales.
17:22It is a fantastic idea.
17:25What I'm struggling with is, can you sell enough just shorts to make a sustainable business?
17:32That's part of where we have this patent that we're hopefully going to get in the next couple months here, but really what we're building is not just for surfing.
17:40We're also expanding into water sports that need specific iterations on the actual product, specifically for that sport.
17:47Give me an example of that.
17:48For instance, kayaking is different from surfing, and you can add additional lengths to the neoprene and things like that, so you can iterate under the umbrella of the patent specifically for different water sports.
17:58How much money will you guys make this year?
18:00We're pretty much break even at this point because we're putting everything back into R&D, and honestly, right now we have that funnel of people that want to buy our product.
18:08We just need to place bigger purchase orders to drive down the cost and increase the margins.
18:13Do you have the orders, or do you think you'll get orders if you drive down the cost?
18:18So we've already sold out of SKUs and styles for this upcoming season, and the problem is now people want them.
18:24So you cannot keep up with the orders at the moment?
18:26No.
18:27It's very good innovation.
18:29You know, I look at million valuation.
18:31I don't think that's that crazy, but I just don't know how big this market is.
18:35That's the only reason I'm out.
18:36I just don't feel the scaling of it.
18:40This is not for me.
18:41I'm out.
18:42This is a really phenomenal job you've done in the creativity, putting the two things together.
18:49But, you know, I like to hit, like, a broad mass audience.
18:53Love it.
18:54Love you.
18:55But because it's niche, I'm out.
18:58I'm not sure about the expansion, like you were saying, how easy that's gonna be.
19:02But I do believe that if you're in that world, you buy a pair, you're never gonna go back to a regular board short again, right?
19:09But there's two other sharks here that are in the space.
19:12Mark, he's had rock star numbers with the paddle board company.
19:15And Robert, you have?
19:16Ham boards, Sand Cloud.
19:17I think you need a collab.
19:18And tipsy also, San Diego.
19:19You need a collaboration with somebody who can bring you other people's members and other people's marketing collectively.
19:25You don't compete.
19:26You complement each other.
19:27So I don't think I can add any value here.
19:28I'm out.
19:29I appreciate it.
19:30Thanks, Andy.
19:31Hey, guys, congrats on what you've accomplished.
19:32It's super smart.
19:33My problem is I don't know if it can be big enough.
19:35You know, you can be a two, three million dollar company, but it's really not a fit for me.
19:40So for those reasons, I'm out.
19:42Yeah, you know, I'm definitely in this space.
19:45But it's gotta be enough that it's worth my time.
19:50We know this space well.
19:52We can really help you with all that.
19:54I just can't do it for 10%.
19:56What can you do it for, Robert?
19:58I'll actually give you a little more money.
20:01There's a term I love, which is accelerate to fail.
20:04Meaning, I think you gotta go faster to find that breaking point in the business.
20:08Yeah.
20:09Let's not do this for 10 years.
20:10Let's accelerate.
20:12I sense an offer coming that's going to be very painful.
20:15I'll give you $150,000, but I want one third.
20:19Ouch!
20:20I'm chafing.
20:21I'm chafing.
20:22Whoa.
20:25I mean, we very much appreciate that.
20:28Would you bump that down to 15%?
20:31No.
20:32Okay.
20:33Yeah.
20:34Yeah.
20:35There is only one shark that's in, because I think I understand the complexity and how
20:39hard this is.
20:40Yeah.
20:41If you get the patent, if we get the patent, we're gonna need more than $150,000.
20:44It's a whole nother scale.
20:46Like at this point though, a little more money, let's go faster.
20:51Um, well, Greg and I...
20:52You know, Wes, I can't read lips so you don't have to cover your mask.
21:01That's fair.
21:02That's fair.
21:03Um, I mean, we definitely, you know, love the work that you've done, the space.
21:05I mean, would you do something down to 20%?
21:07I mean, could we get you to that number?
21:09No.
21:10No.
21:11I just...
21:12I know how much work it is.
21:13I mean, the...
21:14I think the highest we could probably go is 25%.
21:17Robert, that's reasonable.
21:19It is reasonable.
21:20I'm offering you more money.
21:21Let's not forget that.
21:22And, you know, honestly, if I'm worth 25, I'm worth 33.
21:24That's a steal for you, Robert.
21:26And that's what I felt comfortable with.
21:28That's my gut feel.
21:29I'll give you $100,000 for 20%.
21:33Wow.
21:34Well, you gotta take it right now.
21:37Say yes.
21:38I think the highest we can go for that is 15%.
21:41Yeah, guys, I mean, think about what's on the table right now.
21:44I offered you $100,000 for 20%.
21:47You only had 5% flexibility, and you said you needed us.
21:49I mean, I guess you're indecisive, so I'm out again.
21:54What are you gonna do, Robert?
21:55I think if you're comfortable at 25, you're comfortable at 28.
21:59I'll come down from 33 to 28.
22:05What a head squeezer.
22:09Yeah.
22:10I mean, we came here kind of with numbers in mind,
22:12so unfortunately we're gonna have to pass that number.
22:15You gotta do what you gotta do.
22:16Thank you, though.
22:17Thank you so much.
22:18Thank you so much, Sharks.
22:19Good luck, guys.
22:20Way to stick to your guns.
22:22We just weren't willing to give up a third
22:24of what we've worked so hard at.
22:25But at the end of the day,
22:26we didn't feel like his heart was in it,
22:28and that's what we're in it for.
22:29So, you know, for that reason, we were out.
22:39Next in the tank is a functional accessory
22:41for your furry pals.
22:43Hi, Sharks.
22:44I'm Shannon from Austin, Texas, and this is my dog, Rishi.
22:57And I'm Griffin from Oxnard, California,
22:59and we're seeking $400,000 for 6% equity in our company.
23:03Wow.
23:04More and more, our dogs are going everywhere with us.
23:07In the car, on a hike, to brunch, even on our stand-up paddle boards.
23:12While our relationship with dogs has completely modernized,
23:15most dog products are still clunky, inconvenient,
23:17or something even your dog would be embarrassed by.
23:20The most important thing that your dog needs,
23:22besides pets and cuddles, is water.
23:24But who here has tried the make-your-hand-into-a-bowl method?
23:28It's messy, wastes water, and doesn't work well.
23:31Or you can pour the contents of your water bottle
23:34into a portable bowl.
23:36And when your dog doesn't drink at all,
23:38you're left having to throw it out.
23:40And public water bowls can infect your pup
23:42with creepy bacteria.
23:44And let's be honest, we know you kiss that mouth daily.
23:48So we invented the Springer Travel Bottle,
23:53the best way to give your dog water anywhere, at any time.
23:56Oh, can you bet?
23:58Simply squeeze the bottle, the bowl will fill up with water.
24:01When your dog is done drinking,
24:03release the bottle, and the water goes back into the bottle.
24:06No mess, no fuss, and no wasting water.
24:09This is just the first of many innovative products
24:12in the pipeline that solve problems
24:13that pet owners face every day.
24:15So, Sharps, who's ready to join our pack
24:18and make Springer top dog of the pet industry?
24:22Cool.
24:23It's really a good idea.
24:24If it falls sideways, does it leak?
24:25So there is a leak-tight shut-off.
24:27So you have to tighten it?
24:28So you twist it in the middle.
24:29Then it doesn't leak.
24:30Yes.
24:31And then it's completely leak-tight.
24:32Wow.
24:33All right.
24:34So listen, tell us about you.
24:35How did you come up with this?
24:36Our dad is an inventor.
24:38He invented the first travel mug 35 years ago.
24:40Are you guys a brother and sister?
24:41Yes.
24:42My brother.
24:43So Griffin and I actually started our careers as models for the company.
24:47As you can see.
24:48Oh, my God.
24:49You're so cute.
24:50Oh, my gosh.
24:51That's great.
24:52So a few years ago, I adopted Rishi.
24:54I became part of the demographic of crazy dog parents
24:57that would do anything for their dog, but whose problems weren't being addressed.
25:01And that's when Springer was born.
25:03So what am I investing in?
25:04Springer.
25:05So we created a new pet brand, Springer, that sells this bottle.
25:08So this is your first product, right?
25:10Yes.
25:11Do you have any patents?
25:12Yes.
25:13We have eight patents covering these products.
25:14Eight?
25:15Eight.
25:16Wow.
25:17Utility design in the U.S. and internationally.
25:19So when did you start going to market, and how were you selling it?
25:22Our first year of sales was in 2016, and we did about $711,000 in revenue the first year.
25:28Wow.
25:29Wow.
25:30For the next couple years, we sold between about $650,000 and $750,000 per year.
25:35And in 2020, we got $1.7 million in sales.
25:38Wow.
25:39And how much money did you make?
25:40Because there's got to be great margins.
25:41Yeah.
25:42They are great margins.
25:43Yeah.
25:44We made $100,000.
25:45That's not great.
25:46That's it?
25:47$100,000?
25:48Yeah.
25:49So last year, we decided it was going to be a growth year for us.
25:51So we reinvested a lot of our profit into more IP, branding, building out new innovations
25:57that are coming later this year.
25:58So tell us your margins.
25:59What's the cost to make one of these?
26:01It's about $3 on average to make one of these products.
26:04Our margins on retail at 88%.
26:07The mini sells for $22,000.
26:09The medium size sells for $25,000.
26:12And the growler sells for $28,000.
26:14That was a great margin, but where did the money go?
26:16The $6.4 million valuation is a bit of a stretch for a single product company.
26:20But actually, you're just breaking even.
26:23You're making $100,000 on 1.7.
26:25I'm calling that breaking even.
26:26I'm looking for $500,000 worth of costs that I don't understand where they are.
26:31Something is eating up $500,000.
26:34You've got 88% gross margins.
26:35Yeah, and something else doesn't add up.
26:37We had a lot of investment in IP and brand protection because...
26:40What was the total expense of that?
26:41For branding, it was about $150,000.
26:43Yeah, but you see how all this doesn't add up?
26:45Because those expenses are accrued over five years.
26:47You know, so...
26:48Well, a lot of it went invested in the last year.
26:51And those are one-time expenses.
26:53And then we have a team, so it's us, our parents.
26:56We have two other employees in-house.
26:59What do you guys make?
27:01We make about $70,000.
27:02Look, I think the products are really cool, right?
27:04They're ingenious in a lot of respects.
27:06But what concerns me is that you've been selling it for five years.
27:10I'm surprised it hasn't done a lot more for those reasons I'm out.
27:14Who was the person that came up with the brilliant idea of only offering us 6%?
27:19So, to justify that, we're on track this year to sell $2 million.
27:24Yep.
27:25And next year, we're projected at $3.2 million.
27:28We can give you the money.
27:29Is that all you want?
27:30We want your expertise.
27:31We've got to work, too, for the money, right?
27:33We need to blitz the market.
27:34What expertise do you need?
27:35Really?
27:36You want me to pay and get a small return and then work for you?
27:41It doesn't make any sense to me.
27:43We primarily...
27:44It's not worth my time.
27:45I'm out.
27:47I think it's a very good product, but I can't get past one thing.
27:52And it might be my own bias, and it might be my age, but the thing I was taught is when you start a business, the first thing that gets paid is the business, and the last thing that gets paid is the owner.
28:08Yes.
28:09And that's why the...
28:10And you're doing it the opposite.
28:11You're paying yourself $70,000 a year.
28:14I mean, you're starving the business for cash to make a living.
28:18I don't want to be part of that.
28:20I'm out.
28:21Okay, so let me take a stab at this, all right?
28:24What I like about this deal is sales.
28:27I love cash flow.
28:29This is a family business.
28:31The only way I would do this deal is I want to stay out of that soup, all right?
28:35Okay.
28:36With a 6% ownership, I have no say anyways.
28:38This is a royalty deal.
28:39It keeps everything aligned.
28:41My interest to sell more is very high, so I'll give you the $400,000.
28:46I want 3% equity as Schmuck Insurance in case the product gets sold while I'm in my royalty agreement with you.
28:53And I want $3 a unit until I get my $400,000 back.
28:58And then I want half of that, $1.50 in perpetuity.
29:01I have lots of people can blow this up digitally, and I would do that because my interests are aligned.
29:06And that's my offer.
29:07Okay.
29:08Okay, thank you.
29:09Yeah, thank you for your offer.
29:10I really appreciate your offer.
29:12I love this.
29:13This is so smart and so innovative.
29:16And just, like, why would you use anything else?
29:19Yeah.
29:20I'm gonna make you an offer.
29:21I'm gonna give you the $400,000 for 10%, but I want preferred stock.
29:28Which means I would get distributions first whenever there's profits that are paid out.
29:34Awesome.
29:35Okay.
29:36Thank you for your offer.
29:38Thank you for eight percent.
29:39No, I gotta stick at 10, you guys.
29:41Come on.
29:42It's risky, and I gotta be excited to get out of bed.
29:54Lori, we'd be happy to do that deal with you.
29:55Yay!
29:56We gotta do it!
29:57Woo!
29:58Yeah!
29:59Yeah, Rishi!
30:00Fluffy, fight her.
30:01First and better family.
30:03Woo!
30:04I'm so excited.
30:05I'm so happy to be part of the family.
30:10Bye, you.
30:11See you guys.
30:12Congratulations.
30:13Well done.
30:14One of those products, too.
30:17Now that we have Lori on our team, we're ready to blitz the market.
30:20She was the ideal shark for us.
30:22We feel like she's already part of our Springer family.
30:24Woo!
30:25Yes!
30:26Woo!
30:27We made a deal!
30:28Woo!
30:29Woo!
30:30Woo!
30:31Woo!
30:32Woo!
30:33Woo!
30:34Woo!
30:35Woo!
30:36Woo!
30:37Woo!
30:38Woo!
30:39Woo!
30:40Woo!
30:41Woo!
30:42Woo!
30:43Woo!
30:44Woo!
30:45Woo!
30:46Woo!
30:47Woo!
30:48Woo!
30:49Woo!
30:50Woo!
30:51Woo!
30:52Woo!
30:53Woo!
30:54Woo!
30:55Woo!
30:56Woo!
30:57and I'm from Sand Springs, Oklahoma.
30:58My name's Chris Deedy, and I live in Austin, Texas.
31:01This is my son and my brother-in-law,
31:03and I'm Jake Rutledge, the inventor of...
31:05The Chillin' Reel!
31:08Today, we're fishing for $300,000
31:11for a 10% stake in our company.
31:13Wow.
31:14My dad has solved one of the world's biggest problems.
31:21Hey, hold my beer!
31:22Don't create some matches!
31:23I've got a fish!
31:24Hold your own diaper!
31:25I got one out, too!
31:26Chase, hold my beer!
31:27I can't, man.
31:28My hands are full over here, too!
31:30How am I supposed to reel in this fish
31:32and hold my beer at the same time?
31:36There's got to be a better way!
31:39That's why I invented the Chillin' Reel,
31:42the only drink insulator you can fish with
31:44and the only drink insulator
31:46with a hand-line reel on the side.
31:48If you enjoy fishing,
31:50you know how much of a hassle it is to pack all your gear
31:53just to casually pitch out of line.
31:55Obviously, the Chillin' Reel was not made to reel in a marlin.
32:03However, what it was made for is nothing short of a real good time.
32:08We have the Chillin' Reel designed to be easily castable, reelable, and, of course, drinkable.
32:13Just pitch it out, grab your slack, and tip it back, and start reeling them in cold.
32:18We've caught bass, crappie, and catfish on the Chillin' Reel, but today we're fishing for sharks.
32:23Who's gonna take a bite?
32:25Nice, nice.
32:27Where's the rod?
32:28Like, how is the rod?
32:29This is the rod.
32:30There is no rod.
32:31That's the rod?
32:31This is it!
32:33This is the rod.
32:33With the fish you're catching, this is good enough.
32:35So, this just is basically for a smaller fish.
32:38You're not taking it that serious, right?
32:39So, how much pound test line is on here?
32:41Eight pound test is on there.
32:43Eight pounds?
32:43Actually, I have thrown 50-pound braid on there, and I've caught a 16-pound blue cat.
32:50I caught a three-and-a-half-foot hammerhead shark.
32:52Really?
32:53Yes.
32:54If you hold the line and try to reel it, it'll cut your hand, but if you sit here and use this as your crank.
32:59Is that in Florida?
33:00Yes.
33:01Tell us what's happening there.
33:02Well, I'm reeling a fish in right now.
33:04Where's the fish?
33:05He's coming.
33:06He's coming.
33:07That's not a fish.
33:08Boy, that's a big boy.
33:09That's a big boy.
33:10Come on!
33:11That's a big boy.
33:12Where's the shark?
33:13I don't have my phone, or I can pull it out and show you.
33:16You can load it.
33:17I hope you send it back, right?
33:19Oh, yeah.
33:19Let's be clear, though.
33:20This is not made for the big guys.
33:22It's for those days when you just want it to chill and reel.
33:25It's fascinating.
33:26I got to know, what happened to you guys to invent this?
33:29Okay, here's the story.
33:31My family, we're on a family vacation down in Florida, and we're all out in the water drinking a beer,
33:36and I look down, and there's fish everywhere.
33:38Well, I got to catch those fish.
33:40And my buddies looked at me, and they said,
33:42man, you bring a rod out here, you are going to upset everybody out here.
33:45I said, hey, watch this.
33:47I didn't even have to say hold my beer.
33:48I just went in, tied some line onto the bottom of my koozie, wrapped it around, would come out,
33:54pull all the string out, throw it out, catch a fish, reel it in.
33:57I just kept spilling my beer everywhere.
33:59Did you catch anything?
34:01Oh, yeah.
34:01We were always catching fish.
34:03Jake, what's your background?
34:04I've been a Tulsa firefighter for 21 years.
34:07Good for you.
34:09So, I have always wanted to come up with something.
34:13And never did you ever dream you'd be fishing and drinking and ending up on Shark Tank.
34:19That's it.
34:19Why don't we start with last year's sales, and now what you're going to do this year?
34:23Well, I'll tell you, the last 12 months, we've done $1.34 million in sales.
34:27What?
34:28A lot of this crap and this little thing.
34:31A lot of chill anglers out there.
34:33Was not expecting that answer.
34:36$1.3 million in a year?
34:38That's right.
34:38In the last 12 months.
34:39So, last year, up until June, there had been $50,000 in sales, and then from then on,
34:44we finished the year at $680,000.
34:46What about this year?
34:47This year, we're at about $760,000 so far.
34:49So far.
34:50And what do you think you'll make this year?
34:51About $1.65.
34:53Damn!
34:54So, guys, this thing is a total little piece of crap selling a ton.
34:58That's what I thought.
34:59I thought the exact same thing until I saw that there was this response that happened
35:04from people who just want to be out, hang out on the water, float the river.
35:07What does it cost to make, and what do you sell one for?
35:10They sell for $12.95 for the solid colors, $15 for the camos.
35:16They cost us $2.06, and we manufacture in Tulsa, Oklahoma.
35:20All-man Oklahoma.
35:22Did you throw a lot of money at marketing?
35:23We did.
35:24Okay.
35:25Yes.
35:25How much have you spent in the last 12 months?
35:27About 40%.
35:28So $400,000?
35:30Yes.
35:31A little over.
35:31A little over.
35:32A little over.
35:33So, wow.
35:34So take out the advertising cost.
35:36Yeah.
35:37What's your net margin?
35:39Last year, we made a little over $70,000.
35:42Total.
35:43How much have you made this year?
35:44This year, we are negative $25,000.
35:48We just placed an order for $54,000.
35:50So that's where your cash went.
35:51Right.
35:51We've got $350,000 worth of inventory in our warehouse right now.
35:55Look, the thing is so ridiculous, but I can't help but respect the sales.
36:01$1.65 million.
36:03I mean, it's just, that's, that's just, but it's such a piece of crap.
36:07Look, I wish you the best, but I can't invest in this.
36:11I'm out.
36:12Oh, well, we hope you'll reconsider.
36:14This is fun for you guys.
36:18It's not investable for me.
36:19It's not really a company for me, you know?
36:21But I wish you good luck.
36:23I love what you've done.
36:24I'm out.
36:26Thank you, Laurie.
36:27One thing I'd like to add, though, just so you're all aware, we all think there's some opportunities
36:31to license the technology as well, which happens to be patented.
36:35Reeling in on a, on a koozie.
36:37A drink-in slayer that you can fish with.
36:39I wanted to be the patent officer that saw that one.
36:42Yeah.
36:43Damon.
36:44What?
36:45What are you going to do?
36:46It's a great, fun business.
36:49We're selling good times.
36:50And people are buying.
36:51I know, I don't want to ruin you a good time.
36:53But as an investor, I'm not going to have as much fun, right?
36:55I didn't, I didn't come up with it.
36:57I'm not with you guys every day running it.
36:59I just don't think it's for me, so I'm out.
37:01Thank you, Harry.
37:02Sorry to hear that.
37:03Mark?
37:04Look, guys, I've got two fundamental problems.
37:07One, there's just not enough net margin to it, right?
37:10You're spending 40% on your advertising, and so that's really where you've got to kind of
37:15make it better.
37:15Right.
37:16But even if you did a lot better, there's not enough margin left there for an investor.
37:20So that's the first problem.
37:21But the bigger problem is, as somebody who lives in Texas, if you can't hold your beer no matter
37:27what, you're doing it wrong, so I'm out.
37:31Look, I've been really thinking, because first I was completely out, then I was completely in.
37:37And one of you said it, you're selling fun.
37:40And people want fun.
37:42We just had a year of COVID.
37:44We were all locked up at home.
37:46People want excitement and fun, and you're really selling them for a very small price point.
37:52You're selling them fun.
37:54My issue is, you know, there isn't enough room in this deal.
38:01Like, you guys are in a boat, and the boat is staying afloat.
38:06But if I come in, it's going to sink.
38:08Or we're going to get a lot bigger of a boat.
38:10You're going to need a bigger boat.
38:12Where I think we can really optimize on that margin with the marketing and advertising
38:17is we've seen this year as a branding year.
38:20That's what's been expensive, I think, especially this first year.
38:22That will crunch in as we get awareness.
38:24Chris, I've made crazier investments and done really well.
38:28I just don't know.
38:29I mean, I love the fun.
38:32I love the beer.
38:34This deal's all about royalties.
38:36Oh.
38:50Four sharks are out, and Robert is on the fence about investing in chillin' reel,
38:55a fishing reel and beverage koozie.
38:57This deal's all about royalties.
38:59Oh.
39:02What are you going to do, Robert?
39:05I will give you the $300,000.
39:08I'll keep 10% as equity, and I'll take $2 per reel.
39:16I like it.
39:16My first royalty deal.
39:18This is exciting.
39:19Learn, Grasshopper, learn.
39:21What do you think?
39:23You have the margin to do it.
39:24How long is the royalty in place, Robert?
39:27As long as we're having a good time, David.
39:29Oh.
39:31Oh, man.
39:33So that's the difference between Robert and Kevin.
39:36He said it very nicely, but that means perpetuity.
39:39Cut the throat, man.
39:41You guys can counter.
39:43Uh, I don't think we're in for royalties.
39:49Smart man.
39:49If you wanted to go 15% for $300,000, we could do that.
39:56You don't like the royalty, but you don't mind the equity.
39:59Right, right.
40:00I mean, the money, money's great, but we're here for a partner.
40:05All right, $300,000, 35%.
40:08It's not a hard negotiation.
40:12I'm taking a flyer on you guys.
40:14I think you've really figured out something.
40:16It may go somewhere.
40:17I'm willing to risk the $300,000, and I've worked really hard for $300,000.
40:23You know, people always sit up here and they think, oh, it's just money to you guys.
40:26I remember the days where I worked my ass off for, you know, $10.
40:31So it's a lot of money.
40:33I believe in you guys.
40:34That's my offer.
40:35$300,000, 35%.
40:37You want to take it.
40:38I'm happy to go along for the boat ride.
40:40If not, we'll have a beer together.
40:42Would you go to 20%?
40:46No.
40:47No.
40:47It's okay.
40:49I appreciate the offer, but we're going to have to decline.
40:53Way to stick to your guns, guys.
40:54That's right.
40:55Good job.
40:55Cheers.
40:56Thank you all.
40:56Cheers, guys.
40:57One, two, three.
40:59Give me a kiss.
41:01No idea what we're saying, but drink.
41:03No idea.
41:04Thank you, guys.
41:05Guys, keep having fun and making money.
41:06Appreciate it.
41:07Good luck, guys.
41:10What were they thinking?
41:11I don't know.
41:12That's surprising.
41:15Everybody thought it was fun.
41:16Everybody in the U.S. is going to think it was fun.
41:19We didn't catch a shark today, but hey, there's lots of sharks out there.
41:22We'll go out and catch one tomorrow with a chillin' reel.
41:27What a total piece of and 1.6 million.
41:31Well, they were spending all that money on advertising.
41:33That was the problem.
41:33There was not enough market.
41:34That was a lot of money.
41:35A lot.
41:35It was converting, but it's a lot of money.
41:37Kevin, I was so excited there.
41:38I thought I had a royalty deal for a second.
41:40I wanted to know what it felt like.
41:41If he'd gone to a Buck-A-Reel, he would have done the deal.
41:44Buck-A-Reel gets the deal.
41:46Go!
41:46Ha-ha-ha.
41:48Ha-ha-ha.
41:49Ha-ha-ha.