SHARK TANK - EPISODE 402
ENTREPRENEUR: Derek Pacque
PITCH: CoatChex
ASKING FOR: $200k for a 10% stake
BEST PART OF THE PITCH: Derek is a proud Hoosier from Indiana University who saw a need for a coat check business in his college town. He developed a technology that matches a person's face to their belongings. You type in your name onto a computer screen, swipe your credit card and the person checking the coat can now see whose face goes with which coat. Derek wants to sell the franchise so that others can use his technology to open a CoatChex at many locations.
DO THE SHARKS BITE? Mark believes that Derek's plan to sell franchises to area developers who are then supposed to sell to franchisees is a horrible one. In fact, he screams the word "horrible" over and over once this info is verified. Daymond believes that Derek is a thief because he's valuing his company at $2 million. Derek seems to be sinking in the tank until he lets the sharks know about the patent he has that service other areas like valets, dry cleaners, baggage holding businesses, etc. Daymond believes there are other similar products out there, so he bails. Kevin hates seasonal businesses, so he's out. Barbara follows his lead. Only two sharks remain.
THE RESULT Robert and Mark both like the product even though they aren't crazy about the business plan. Robert wants to hear another offer. Derek goes up to 15% equity, but that's not enough. Robert's out. Mark offers $200,000 for 33% equity. Derek makes a quick call to his business partner, who advises him to pass on the offer. He counters with a 20% offer, but Mark can't go for that. Derek checks out of the tank without a partner.
Update: Tower Paddle Boards
Last season, Stephan Aarstol, the maker of Tower Paddle Boards, made a deal with Mark Cuban for 30% of his company. Since then, the company has gone from 100,000 in lifetime sales to 800,000 in just a few months. The company is on pace to do $1.5 million in sales through their website alone. Stephan feels his experience in the tank has truly jump-started his career and this is just the beginning.
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