[0:10]Next up is a quick boost of a life essential.
[0:23]Hello, Sharks. My name is Rob Neuner. I'm the CEO and founder of Boost Oxygen. Hi, Sharks. My name is Mike Grice, I'm the chief operating officer of Boost Oxygen. Oxygen is the most essential element for the heart, for the brain and for the muscles to function. We've all seen supplemental oxygen being utilized by professional football players on the sidelines, by aviators, by mountaineers and by many other people for many different purposes. Boost Oxygen is 95% pure aviator's breathing oxygen compressed into affordable and portable aluminum cannister. It's an all-natural product for health and wellness, but it's not a medical device. Our mission at Boost Oxygen is to make compressed oxygen as available as bottled water. And Kevin, if we sucked all the oxygen out of this room, we'd all be literally dead to you right now. Uh. So sometimes you want more. We believe that by partnering with one of you, we'll be able to reach millions of people who want to improve their quality of life and their performance. So what we're going to do, we're all going to try the oxygen at the same time. So you take the mask, you put it under the nose and over the mouth. Then you press the trigger. Inhale it for a couple seconds, we're going to all do the same time. So you ready? One, two, three. So what we're asking for is a $1 million capital investment for a 5% equity stake in Boost Oxygen. Oh. Wait, wait, wait. Repeat that again. A million dollar. I'm out. What are your sales? This year will be $6.4 million. Oh, my God. And are you profitable? We are profitable. In 2018, we had $705,000 in net income. And how much would you make this year you think? This year we're going to make about 1.5. Okay, really. Who's using this? We really started it at altitude because it's an intuitive product. When you go up from Florida to Vail and you go skiing and you're breathing hard, you see oxygen, like, I'm going to try that. You try it, and you like it. You use it when you're there. When you go back to Florida and you're breathing hard, you're exercising. Anytime that you're breathing hard is your body telling you you need more oxygen. Okay, so talk about competition, because I know the Mavs use a different type of cannister than this. Yeah. We do have competitors, but what we're trying to do is we're trying to create a new a new space, a new market, a new vertical, because there is no oxygen vertical right now. That's very nice to hear, but where do you rank with your competitors? We have roughly 95% market share in the United States. Whoa. So what's the cost of this to the consumer? $14.99, $9.99, $7.99 for the 2 liter. The cost is $2.5 to manufacture and aggregate for all of our different skills. All of it? How many hits do you get? 200 inhalations. Is this FDA approved? It's not. FDA is not regulating it. Someone here gives you a million bucks, great. Now, what are you going to do with that? First thing we're going to do is we need to expand our staff. We would like to have greater control over our sales force. Right now we work with brokers, we work with distributors, we work with retailers. It's all retail. You really want to go to retail. Yes. Why not just stay the course online? Because when I'm worried about is there'll be a lot of de-listings in stores that don't turn this stuff. It's an impulse purchase. So the problem with moment is the impulse purchase means I'm in the mountain, I feel like I need oxygen, or I'm out of breath, I'm going to impulse buy. That's a decent market. The great market, a brand you have to use on a routine basis. My concern is you're trying to educate people on a problem they don't really know they have. And so, unfortunately for that reason, I'm out. Okay. Yeah, appreciate it. I had an experience with your particular brand when I was in Utah with my husband Bill, has breathing issues. I wholeheartedly agree with you that you need to do retail because I don't think people take the time to think, let me order a supply online, but as you've already learned, it's a very expensive proposition. More importantly, I saw a beach house last week that was exactly $1 million and it was beautiful. What beach? Oh, it was cheap, and I'm not telling you, because you'll probably try to overbid me. But here's the skinny: I'd much rather have that beach house for the $1 million, so I'm out. Okay. Thank you. Even when I love people, I don't always feel like it's the right deal for me. Love you. I'm sorry, I'm out. Okay. Thank you. I appreciate it. Guys, it's rare that we have a company come on that has 95% market share. Just doesn't happen, so congratulations. But in looking at the five of us, none of us took it and said, wow, this is a no-brainer. We all had to, like, wait, do I feel anything? That's not good. Normally, I can come up with an angle for anything, to get it on a ubiquitous path. I just, I don't see that. And so, for those reasons, I'm out.
[5:03]I'm going to make you an offer, but before I do, I want you to take a big breath because you're going to need it, okay? You're not going to like the number and it's not going to be equity, that's for sure. I feel better about this offer than I even felt a few seconds ago. So here's what it is: You have good cash flow in this company, so you can support some debt. I'm going to give you the million bucks in a loan. 36 months, three years, okay, 9% interest, and I want 7.5% equity. The great thing about being a Shark is every buyer calls you back, always. So, that's an offer that I think is a very good one for you, because there's only one Mr. Wonderful. I don't know why you wouldn't accept that. I think it's a great offer. Uh, well, I'm still concerned about taking on debt when we don't need to take on debt, especially 9%. So, You ask for a million dollars. I have no choice. So we're buying it though. Wasn't really it's it's like we don't need the cash. We need someone just to buy in. No Shark up here is going to give you a million bucks for 5%. Because they never get their money back until there's an exit, we don't know when that's going to happen. You're allowed to counter. Yeah. Or he'll pull it. Okay. What do you think?
[6:11]Right. So we'll do a million for uh, 6% of the uh, not 6% 6% 6% as the um, sorry, the interest rate. For 6% So the deal the deal now is you're you're countering me instead of giving me 9% interest you want to give me 6% but I keep my 7.5%, right? 5%. For 5%. Also. All right. Because we're all reasonable, we meet in the middle. Okay. That's how we get this deal done. So I'm at nine, you're at six, 7.5% interest, no problem. About ten. And 6% equity. Six and a quarter. Well, you're pretty sharp in the numeronies there when we're cutting it in half. I think the deal's reasonable. Let's go. Good. We'll take the deal. Love it. Thank you, guys. I like it. I like it. I appreciate it.
[7:03]Clip and coupon. Clip and coupon. Good luck. Gonna need it. No, I'm kidding.
[7:13]Quite honestly, I was very surprised to be shaking hands with Mr. Wonderful, talking about a $1 million deal. And the input that we received from the entire tank of sharks, it's going to do nothing but take us from good to great.
[7:29]Next into the tank are young entrepreneurs with a beverage for a new generation.
[7:39]Hey, Sharks, my name's Justin Fenchel. I'm Brad Schultz. And I'm Amy Steadman, and we're from Austin, Texas. Our company is BeatBox Beverages, and we're seeking $200,000 for 10% of our company. Now, Kevin, you know wine, so picture this: A delightful Cabernet from the Bordeau region of France. It's been aged in oak barrels for 15 years. It's perfect. You could almost taste it, right? That's true, bring it over. Well, there's just one problem. Why? Boring. Exactly. Now we're getting down. Oh. This is BeatBox Beverages, and we are not boring. We're changing box wine forever with flavors like Cranberry Limeaid and Blue Raspberry Lemonade, all in one sweet-looking BeatBox. But it's not just a box, it's an experience. Take BeatBox to your next party, and you're instantly a legend. Box wine is incredibly popular. It's affordable, it's convenient. It's got a large size where you can share with everyone at the party. But the wine you find inside leaves much to be desired. We're using a unique orange wine that drinks more like a spirit than a wine, and allows us to create mixed drinks that our customers absolutely love. BeatBox is a party in a box. Almost seven bottles of wine packed into every box. We've created an innovative fun brand that's really speaking to our generation, and we're ready to take this company to the next level. The only question is, will the Sharks be joining the BeatBox party? Let's try some. Yeah. What is orange wine? I've never heard of that. Yeah. So orange wine is a is a unique wine. It's actually, uh, clear, much more like a white spirit. The blue one is the blue raspberry lemonade. The pink is a cranberry limeaid. The yellowish color is our Margarita flavor, and the tea is a sweet tea. This tastes like Oh, are you kidding? This is good. He loves it. This is delicious. He's crazy. It's a party. I love this one. Reminds me of those like blue raspberry snow cones. Wait, how much alcohol is in here? 11.1%. What? Yeah. Cheers. Only $120 per sip. And only 7 grams of sugar per serving. You know what? I love the wine. Kevin, give him the money. Tell us more about the business. You need a manufacturer? What are your margins? Who's actually distributing it? So we self-distribute it. We actually, um, became a winery ourselves. The Texas winery, you can self-distribute it. But when we got, you know, to the point where we were spending more time in our facility, making it, gluing the boxes in and distributing it, we couldn't market it, right? We're getting too big. So we found a copacker in Dallas, and they now make it for us. So we signed with a distributor. Since then, we've grown our sales pretty dramatically. What are your sales so far, Justin? We've done $235,000 in 4 months, and $120,000 has come in just this quarter. How much money did you raise when you started? So, so we self-funded it for $55,000. We took on $100,000 in family and friends debt. So tell me how you're going to go from 235 to 5 million? So the strategy is to identify new stores where we know it's going to sell, go into that store and support it with at least six tastings. Tastings are by far the best way for us to get the product out there. Why do you need the money for? It's for the engine of growth. Opening up new stores and, you know, supporting you with tastings. Our tastings cost on average So hiring the people? $100 per tasting is on average, in Texas. That's expensive. That's expensive. Doing it in the stores sounds really, really good, but it's really hard to leverage. One store at a time, even with brand ambassadors. Your leverage points for any one store aren't great. My mind, the strategy was wrong. You know, you need to take advantage of Advance, take advantage of big, you know, places where there are thousands of people. Feel like we've eliminated a lot of the risk associated with a new consumer products company in this space. We've got outsourced manufacturing. We've got the largest distributor in the states, and we need someone to help us scale this business. The good news for you guys is there there's there's examples of beverages that have gone viral and gone national. You remember Skinny? Skinny Girl? So absolutely. Absolutely. That was the same thing, very viral for one location. Then New York, Florida, Texas, California. But she ran like hell for everywhere else. The path of least resistance is converting that person that's buying that box of wine for a party. Right. But they don't know why they're buying it. That's the easiest conversion. And so, Fronzia, an example, is the number one box wine in the world, number one by volume. A billion dollars in sales. Fronzia does a billion dollars in sales. It is 3%. But you know why? Because they've got 100% penetration and distribution. And everybody's tried to knock it off. I'm in the wine business. I sell 15,000 cases a year, 2.6 million this year. It took me three years to get there. And the thing that's holding me back, I'll tell you what's holding you back, the name. It's called O'Leary wine. That's why it sells. You got to call it Beatbox. Yeah. I'll make you an offer.
[12:44]I'd like to offer you $400,000 for 20%. Thank you so much. Thank you, Barbara. 400,000 for 20%, Barbara. Yes. Guys, your biggest challenge is breaking those states through their distribution system. I and you can certainly help with that. No, definitely, but I'll put my offer on the table with my own experience. I think I'm worth twice as much as Barbara, I'm sorry. She doesn't know what she's doing in the space. I'll give you 200,000 for 20%. So you're cutting Barbara's offer in half. Yeah.
[13:17]Now they can go Because you make us snooty wine that has nothing to do with. No, unfortunately, I've lived through distribution. Yes. We're going to do 22,000 cases, 9-liter cases, this year. Mark, what? What up? Me? I don't see this as a wine product. You guys got that down. Right? You guys don't sell wine. Right? You're in the store. You guys sell fun. You're absolute. Right? And then the biggest question is, how do you connect with enough people quickly enough to make her grow fast enough that all of a sudden you're going, what am I going to do now? Right? Because you're you're going as fast as you can. You need a lot of help. You want to create as big a splash as possible, and I think I'm best suited up here to do it. So what I want to do is make you an offer of $600,000 for 33%. You guys got to make a decision what you want to do.
[15:11]Yeah. Absolutely. We'll do the deal. Wow. Wow. Right. Well, thank you. Thank you. Thank you. Appreciate it. Yeah. That's great. We'll do work. Let's do work. Wow. That's a 3 mil valuation. All right, guys, I'll be in touch real soon. And we'll get it turned around. Wow. Thank you so much. You know what he's going to make money on it. I'm jealous of the deal. Let's party.
[15:57]Next up, entrepreneurs with a modern and affordable way to be fashionable.
[16:11]Hi, Sharks. My name is Josh Harber. And I'm Diana Harber, and we are from Athens, Georgia. Our company is The Red Dress Boutique. We are seeking $600,000 in exchange for 5% equity in our company. The Red Dress Boutique is one of the fastest-growing online women's retailers in the country. We have a personal touch that no one else can beat. I am always finding new and upcoming designers, and we update our collections daily. We cater to the woman that wants to look like a million bucks, but she doesn't have to have a million bucks. Roughly 80% of our merchandise retails for under $50. Sometimes, all a woman needs is that one fantastic new outfit to turn a bad day into a good one. To give a woman the confidence she needs going into an interview, or to give that stay-at-home mom a reason to smile after that rare moment she treats herself. And we have some treats for you. Yeah, we like treats. I love that dress. That dress is beautiful. How much is that cost? $52. What? Yes. And Abby's dress is 40. Thank you. Now, this is how we package every single order that goes out to our customers at Red Dress. It is literally a present to the customers. We put a handwritten thank-you note in every order. Thank you. Oh, my, jewelry fell out. Jewelry is in there, too, to match your outfit. Basically, that is what a Red Dress woman shops for. Is she's coming to the site, she has little to no time to shop for herself. We pair it and match it as an outfit. But you're you're recommending these collected together? And that's actually how the customer I am shredding the book. If I was to select this, would it automatically suggest that I buy the rest of the outfit? It would. Dana, what is the average buy from a woman online? $75 per order. And how often do they reorder throughout a 12-month period? We have a lot of return customers that order on average about six or seven times a year. We also have, we're getting new customers all the time. What are your sales last year? $8 million in gross sales. Good for you. We are on target to do 12 to 15 million this year. Wow. How long have you been in business? The website's only four. Four years? Four years old? Wow. What are the sales the first year? 2010, very modest, $80,000. 2011, $250,000. 2012, 1.8 million. What was 13? 113 was 7.5 million. What will sales be this year? Projecting 12 to 15 million. Wow. We're doing $1 million a month. I'm really proud of Red Dress. Congratulations. It's a really fun story because we were married for 6 months, and grow up fresh out of college, and we were working cubicle jobs at a credit card processing company. And I came up with the Red Dress in the cubicle, and I went to Josh and I said, I have this great idea for a boutique, and I know I can do this. So we both ended up quitting our cubicle jobs, age 24, sold our house, took out a six-figure loan, we had no idea if we could ever repay. And we rented an air mattress in Shacket with Brad Josh's college buddies for an entire year. How did you make this grow so big, so fast, and all online? With through social media, but more than that, it's because I invite people in. I put the question to my customers, I was like, what made y'all come to me? What makes us what makes Red Dress special? And they gave amazing answers. They said, oh, it's the colorful clothes, it's the fact that we can get a high-end look for under $50. So you learn from them. Yes. You use social media? I did. And you kept perfecting your business with their answers. I developed a program called Buy For The Boutique. And when I go to my markets, I go every three weeks. I go to Los Angeles, I go to Vegas, I go to Atlanta. And I curate. But more than that, I see items, and I will take a picture of it with my phone, and I will throw it out into social media. And say, do you love this? Yes or no. Do you want in red? Do you want in blue? And no one had ever done that before. And they loved it. It was all word of mouth, gave you a 4x close. Yes. We have 127,000 Instagram followers. We are just shy of a million followers on Facebook, organic followers. We went from 1.8 to 7.5 million. That's phenomenal. Something happened in that time period. Yes. My dad actually died in October of 2012. Sorry. My dad was the person who got me started on Red Dress, just by being a mentor. And so I took my grief and I used it as fuel to push Red Dress as far as I could get it to go. That's my motivator, and that's a motivator that would die with me, because I live every day to keep making him proud. He called me his acorn. Oh. So on that 13 million, how much free cash are you going to make? Uh, probably $2 million in net profit. What do you reckon it costs you to get a new customer? We've just now started to get into really thorough analytics. And it takes time to accrue that data. You've had this phenomenal growth on on word of mouth and viral aspect.
[21:19]When you get to, uh, you know, 10 million, you want to get to 20, you're going to start to compete with some pretty heavy hitters in this space. Yes. We are. They're spending a lot of money trying to figure out the incremental cost of every new customer and the lifetime value. We've just now started rolling out retargeting ads. That was something that was has been really great for us, and we're just now getting back the data on that. I'd like to draw an analogy. There's a great story in fashion around Vidal Sassoon, who was the first to curate hair for women. But when they tried to expand, they found out that they couldn't clone them. And he tried to train people in every city to do this, and they had horrific problems. I'm very worried here.
[21:59]To me, the road ahead is is one where you're going to face the same issues Sassoon faced. You're going to have to clone yourself, and it's not easy to do. It's not easy to do, but I have started the process. To me, that's a risk that I don't want to take. I'm out. Kevin, thank you very much for your time. Thank you. I'm extremely impressed by you. You called yourself an acorn. And I see you've grown into like a mountain full of trees. You're amazing, and what you did with social media to me just is mind-boggling and incredibly impressive. I actually could learn from you in the social media realm of how you have grown your business. But I think that I'm not the right shark for you to drive this business. So for that reason, I'm out.
[22:47]You know, this reminds me of of the way I started with Fubu, where I was just talking directly to the customer, and nobody else knew how to do it. And that's how I got here. You guys are the Fubu of your category. I'm probably like Lori. I'd be learning from you. You're here for a strategic partner. I wish I could help you, but I can't. So I'm out.
[23:12]Why do you need $600,000? Why are you here? Mark, you've said in interviews that you you really want to be needed, but not necessary. That's what we're looking for. We're looking for someone who can help us walk through the heights and some high-level decisions to get us to that next level. Because every one of you is here right now because at some point you took a small company, and you scaled it to a massive company. We have figured out how to grow a company from nothing to over $1 million a month in sales. But getting to nine figures a year, it's a whole different thing. It takes a mentor who's walked the path before us, and the $600,000 we need $300,000 of it for a new website, um, because we have actually maxed out the capacity of the out-of-the-box system that we have. And a back-end system for our website. There's really is giving us not very good business data at all. That's my world. Analytics, enterprise type of information, that's where I live every day. Honestly, that's where I'm weak. Well, that that's where I'm very, very strong. I think I can add a lot of value on the back end, which is what I think you need right now. I'll give you the $600,000 for 15%. First of all, thank you very much. That's a huge gesture of faith in what we're doing. Um, right now, I think the 15% is a little more equity than we were planning on giving up for that valuation. Respectfully, we'd have to decline that. Respectfully, I'm going to stay there. Thank you. What about 1.2 million for 20%? Mark can take the ten, I'll take the ten.
[24:58]That way we have the same amount of equity. I'll do that. The two of you together? 1.2, 20%. 1.2 million for 20%.
[25:19]Yes. Yes. No. Right. Deal. Congratulations. Yes. And I want to do it in Red Dress.
[26:22]Congratulations. Thank you very much. Thank you, sir. You're not shaking me with that. No, this means that the sky's the limit. Mark and Robert are angel investors. That's what they are. And angels can give you wings, and with wings you can fly.
