0:00 [Music]
0:10 [Applause]
0:13 My name is Stefan Arsel. I'm 39 years
0:15 old and I live in San Diego, California.
0:18 I've always been what you might call a
0:20 geek. You know, I got good grades. I was
0:22 on the math team. I've kind of always
0:23 played things by the book. coming out of
0:25 graduate school with an MBA, uh, you're
0:27 sort of groomed to go in a in a certain
0:29 direction towards really corporate jobs,
0:31 management, consulting type jobs and and
0:33 I did, but that just really sucked the
0:36 life out of me. With the set of skills
0:39 that I have, I wanted to do something
0:40 different, you know? I guess I just
0:42 didn't know how
0:47 different. I fell in love with standup
0:49 paddle boarding the first time I tried
0:50 it. The more I looked at the sport, the
0:53 more I I just realized that there was a
0:54 there was a tremendous opportunity
0:57 here. Today is a huge day for me. I
1:00 mean, this is the launch of the brand
1:01 that I created, Tower Paddle
1:04 boards. The sport of paddle boarding is
1:06 a lot of fun to just be involved with in
1:08 general, but being in this industry,
1:11 there's a lot of for fringe benefits,
1:12 especially for some of us, you know,
1:14 internet
1:15 geeks. I hope the sharks really can see
1:18 what a huge opportunity this is. And if
1:20 I can get them to invest the money in
1:21 this, uh, you know, I I never have to go
1:24 back to the corporate world again. Long
1:25 live Tower
1:26 [Applause]
1:29 [Music]
1:41 [Music]
1:43 Cowboy. My name is Stefan Arstall. My
1:47 company is Tower Paddle Boards. I'm
1:50 seeking
1:52 $150,000 in exchange for 10% of my
1:56 company. What if I told you the fastest
1:59 growing water sport in the world was
2:02 something that each of you could master
2:03 in about 20
2:05 minutes? It's called standup paddle
2:09 boarding. Standup paddle boarding is
2:12 absolutely exploding. It's coming to
2:14 every beach, every river, and every lake
2:18 in the world. It's got the cool, soulful
2:21 appeal of surfing. Yet, it's so easy to
2:23 do that all of you can do it.
2:26 [Music]
2:34 My
2:37 uh my company is uh
2:42 Don't worry, it's only your biggest
2:43 moment in your life.
2:45 It's so easy. Uh you you can do it with
2:47 your friends, you can do it with your
2:50 child, you can even do it with your
2:53 dog. It's uh
2:57 [Music]
3:00 Can you tell us more about it? Sure.
3:02 Yeah. Um, stand up paddle boarding is
3:04 the fastest growing water sport in the
3:06 world. We know that.
3:13 What is What is your product? Um, we we
3:16 develop a brand of standup paddle
3:18 boards. The Tower brand uh exudes sort
3:21 of an active social beach vibe. You
3:23 know, we produce and sell boards,
3:26 paddles, and accessories, and we sell
3:28 them direct to consumers through our
3:30 website. How much have you sold? We've
3:32 sold $100,000. Over what period of time?
3:34 Uh, in about 4 months. What does the
3:36 board sell for, and what does a paddle
3:38 sell for? Okay. Our boards sell for uh
3:40 $600. Basically, in this industry right
3:42 now, um, paddle boards cost $1,200 to
3:46 $1,600. They're th sold through a
3:48 traditional retail channel. Has
3:50 everybody heard of this board before
3:51 today? I I do it all the time. The
3:53 paddle board business is is going boom.
3:56 Some people on the panel may not
3:58 understand all of the cardio benefits of
3:59 this. Would you mind if your lovely
4:01 assistant demonstrates exactly how this
4:04 works? Where do you stand? How does the
4:06 paddle work? If you don't
4:07 mind, you you paddle like this. And
4:11 there's a health benefit to this. I
4:13 noticed they say that 1 hour of stand up
4:16 paddle boarding is equivalent in terms
4:17 of exercise to 8 hours of surfing.
4:20 convince me why your business is going
4:23 to be participating in this market and
4:25 why it's worth 1.5 million today. Sure.
4:28 It's it's it's on uh and those sales are
4:31 over the past four months. So 4 months
4:32 ago we did 3,000 in sale for that month.
4:35 Last month we did $35,000. We're
4:37 basically selling a $1,200 board in a
4:39 $600 dress. So is the advantage I have
4:41 as an investor I can get on the ground
4:43 floor of the lowcost provider to the
4:45 paddle board industry? It it is the
4:47 lowcost provider in a sense. It's not
4:49 the cheapest board on the market.
4:50 There's cheaper boards in this Well,
4:52 there's there's boards that are about in
4:53 that price range. They're sold through
4:55 the traditional retail channels. So,
4:57 we're skipping all of that. Now, the
4:58 direct sales are coming from your
5:00 website. Coming from the the website.
5:02 And how are you building traffic? This
5:04 is basically the the expertise that we
5:05 bring to the table. I mean, sort of the
5:07 pixie dust that we have is I'm an
5:09 internet marketing expert. So, what does
5:10 it cost you to acquire a customer that
5:12 buys a board? Do you have any idea? Uh,
5:14 yeah. It doesn't cost us anything. Uh,
5:16 we've just started this business. I've
5:18 I've developed it myself. I've developed
5:20 the website. Um, like I was saying, I'm
5:22 I'm an internet marketing expert with
5:23 about 12 years in experience. Well, then
5:25 you know that answer is crap. You know,
5:26 it cost you something to get get a
5:28 customer to come to your site.
5:31 And you you would be shocked. You you
5:33 I'm going to be if you tell me it's zero
5:34 cuz I don't believe you.
5:38 If you Google best, you know, paddle
5:40 boards, we're not number one in Google.
5:43 We're three of the top four. Let's talk
5:45 about money for a second. You're telling
5:47 me for 150,000 I get 10%. That means the
5:51 value of the company that you want me to
5:52 buy into is 1.5 million. I have 1.5
5:56 million. Okay. Now, why don't I take
5:58 some of my 1.5 million if I want to be
6:00 in this business and go to your
6:02 manufacturer and create Mr. Wonderful
6:05 Boards. Then I set up a website. I got a
6:07 couple of geeks and they write the code
6:09 for me. And I also have a website. How
6:11 are you going to sell it? Are you going
6:12 to go through I'm going to do the same
6:13 thing you do. I'm going to pay nothing
6:14 for marketing because you're telling me
6:16 I don't have to. What do I need you for
6:18 is my question. Well, um to to basically
6:21 to do that to do the zero marketing
6:23 thing, you're going to need to to hire
6:25 somebody to get to the top of Google and
6:28 guys like me. Yeah, but I can hire guys
6:30 all day long. You really think that none
6:31 of us up here have guys like I do, too.
6:34 There's nothing that I can't do myself.
6:36 I don't need
6:37 you. Time out. I can't hear another
6:39 word. Okay.
6:42 [Music]
6:43 You're probably the worst presenter I've
6:45 ever met. No, come on. Just cuz you
6:46 don't get it doesn't mean he's a bad
6:48 presenter. Come on. I've built so many
6:49 websites. I've hired guys like this. And
6:51 you know what? You talk like all of
6:53 them. You know what? They're like
6:53 leprechauns. They come in the night.
6:55 They talk it gibberish. You don't get
6:56 what they're saying. They run away with
6:58 your wallet. That's what happens, right?
6:59 Believe me, I've hired so many guys like
7:01 you, Barbara. That's ridiculous. It It's
7:02 not ridiculous. I've had very bad
7:04 experience with guys that talk like
7:06 this. I don't get it. I I definitely
7:07 fail to get my my my message across to
7:09 you. Yeah, you have failed to get your
7:10 message across and I'm listening with
7:12 both ears wide open. I really mean it.
7:14 Okay. Okay. I appreciate that. You know
7:16 what I think you should do? I think you
7:18 should stick with being a nerd.
7:20 [Music]
7:22 I'm out.
7:24 Don't listen to a word she said.
7:28 [Music]
7:29 I get your presentation, but when I'm an
7:32 investor in something, I want there to
7:33 be something proprietary about it that
7:35 at least I have a chance when a
7:37 competitor comes up that I can pour some
7:39 boiling oil on them. But I can't do that
7:42 here because anybody can do what you do.
7:45 I got to tell you, I love the sport. I
7:47 really do because it makes old guys like
7:49 me think we're
7:51 cool. But your valuation is not cool.
7:54 Not 1.5 million today. I'm out.
8:02 Basically, the bicycle for water was
8:04 invented about the same time that the
8:07 the biggest social network in the world
8:09 was invented. And in that time, they've
8:12 they've amassed, you know, 500 million
8:14 users.
8:16 Correct. The number of bicycles in the
8:19 world is 1 billion. Twice the amount of
8:22 the number of cars. This is basically a
8:26 bicycle for the water. Oh my god, I have
8:28 a headache.
8:31 Okay, I don't think you understand what
8:32 we can't get over. We can't get over.
8:33 You've been in this business three
8:34 months. There's nothing proprietary
8:36 about it. You are valuing the business
8:38 at $1.5 million. The problem is when a
8:41 magician starts to believe his own
8:42 tricks, that becomes the problem. And
8:44 with that said, I'm out. Okay. Thanks
8:46 for the consideration. Um, so you're
8:50 still in it, Mark. I think I think you
8:51 totally understand sort of the
8:53 specialized expertise that goes into a
8:55 business like this. Is everybody else
8:57 still in? I'm still in. I'm still in.
9:00 I'm trying I'm trying to You know what
9:01 I'm trying to do because your your
9:02 presentation is so different. I'm not
9:05 saying it's bad or good. I'm just saying
9:06 it's different. I'm trying to structure
9:08 the deal that makes sense for me because
9:09 I'm interested in you. You're
9:11 interesting. Okay. So, I'm thinking to
9:13 myself, why don't I give you
9:15 $150,000 for 50% of this entity, and I'd
9:19 like to sell other stuff, and I want to
9:22 get my cash back, though. So, I want a
9:24 10% cash royalty on everything you sell.
9:28 So, I'm getting a check every
9:30 month, right off the top, and if you
9:32 need more money, I'll give you more
9:33 money. But, I want to be a 50/50
9:35 partner. Sure. And how deep does that
9:37 well go? Well, I don't know. You have to
9:38 dream with the products. You call me up,
9:40 say, "Hey, Daddy, I got a new idea." I
9:41 said, "I don't care. I want to be your
9:44 banker." That's exactly what you're
9:46 doing. I just want to give you some
9:48 cash. I I think it's interesting, but I
9:50 honestly, you guys, this business is an
9:51 $1 million business in three years. But
9:53 no, I'm not saying from that business
9:56 opportunity cost for me. Do you have any
9:58 other ideas on what to sell? I do. I
10:00 have three other business plans that are
10:01 $50 million business plans. Welcome
10:03 home, son.
10:05 I have plenty of money. That's not a
10:07 problem. I I respect that offer, but I
10:09 told you earlier in the presentation,
10:11 you can't hire guys like me. We work for
10:13 you right now. We We can We can call our
10:15 own shots. I mean, I want to buy 50% of
10:17 your company for $150,000. You want to
10:20 buy 50% of me is what you're saying.
10:23 What are you guys talking about? What
10:24 are you playing? What are you guys Give
10:26 the guy the answer? Yes, sir. So, no. I
10:29 I can't accept that offer. I'm sorry.
10:31 All right. I'm out.
10:33 Good. Don't let the people who know what
10:35 they're talking about talkative audience
10:37 here. What I see here is that you're
10:39 starting this business to get it to a
10:41 point because it's such an enormous
10:42 marketplace where you can flip it,
10:44 right? And once we flip that and get
10:46 take that cash, you'll put some in your
10:48 pocket. Then you'll go look for another
10:50 business and do the exact same thing.
10:52 So, I'm willing to give you
10:53 $150,000 for 30% of the
10:56 company, but the contingency is that any
10:59 future companies that you go into, I get
11:03 the first right of refusal so that I
11:05 don't build this for you and then you
11:07 take the money and run. Okay. Okay. And
11:09 so, you get the first right of refusal
11:11 on me raising money on other companies
11:13 on any other companies cuz if we if
11:14 we're successful on this, right, I want
11:16 to be your partner there because it's,
11:18 you know, it takes people to work
11:19 together and I'm not going to be greedy.
11:21 you can have more than half of the
11:22 company and then you know and then in in
11:24 true cander if there's a big enough hit
11:27 the amount of money we're going to
11:28 negotiate and if it takes a lot more
11:30 capital I'll get more of the company
11:31 right yeah I mean exactly I mean it's
11:34 not there's no percentage for that
11:36 difference I see no difference to what I
11:37 offered you I think the difference is uh
11:39 you know Mr. Wonderful I think I think
11:41 he he actually called you Mr. will work.
11:43 No, I get it, too. But I'm willing to go
11:45 to 25%.
11:47 Same deal. Same deal. 25%.
11:51 So, we're not We don't have a lot of
11:52 time to mess around, Stephan. So, you
11:53 just got to make your make a I'm not
11:55 going to sit here and get into the back
11:56 and forth with not so Mr. Wonderful,
11:58 right?
11:59 [Music]
12:05 I I like your attitude and I think I
12:06 think you I think you get it. And I'm
12:09 150 is way less than I should take for
12:10 30% of this company. And I you're going
12:12 to realize that in about two years. And
12:14 that could be a better deal. I'm gonna
12:15 make my money on the back end. I like
12:16 your deal, Mark. I like your deal. Let's
12:18 do it. Whoa. Did not see that coming. I
12:21 did not see that coming. I appreciate
12:24 it. This was This was a lot of fun for
12:26 me guys. Thank you. It's a pleasure.
12:31 That was a That was a rough start,
12:32 right? Did you see that coming? I didn't
12:34 see that coming. That's a generous
12:35 honor. But you know what? You didn't see
12:37 it coming because that's the way I
12:38 played it. You know, you bought his
12:40 brain. I'm a business builder. I take
12:42 small things and make them great things.
12:46 [Music]
12:49 Hi Sharks. I'm Neil Cameron. I'm Peter
12:51 Ferrer. I'm Dennis Lionady. And we're
12:54 Nuts and More. We are seeking
12:57 $250,000 for 20% equity stake in our
13:00 company. Good old PB just got a
13:02 facelift. Nuts and More are fortified
13:04 butters with added protein, added
13:07 omegas. They're high in fiber with no
13:09 sugar added. Nuts and More was born this
13:11 past year in a small corner of my
13:13 family's bakery shop. We ground lots of
13:16 nuts, mixed ingredients together, and
13:18 filled jars by hand. It wasn't long
13:21 before Nuts and More was ready for its
13:22 big debut on the shelves. We were
13:24 instantly recognized by pro fitness
13:26 athletes, celebrities, and more
13:29 importantly, nutritional stores who are
13:31 buying our products by the minute. With
13:34 your help, we'll be able to take our
13:36 nuts to the next level where it belongs.
13:40 So, shocks, are you ready for some
13:42 aggressive expansion? Can we try it?
13:45 You're going to try it right now. Here
13:47 you go.
13:50 We have four varieties right now.
13:52 They're fortified with protein and flax.
13:54 We have a peanut butter, a chocolate
13:56 peanut butter, an almond, and a
13:58 chocolate almond.
14:00 Do people like the taste? Absolutely.
14:02 Love the taste. Love it. The almond
14:03 butter is way better than the peanut
14:05 butter. I love peanut butter. I have it
14:08 every morning. So, why is it better for
14:09 me? Because you have double protein. So,
14:11 you got 14 grams of protein compared to
14:12 seven per serving. We put flax seed in
14:15 it. It's what gives you the omegas, the
14:17 369s, and you get the added fiber. So,
14:19 just um so we don't think you're
14:21 absolutely
14:22 nuts. Said you've only been open a year.
14:25 Correct. That's actually a little less
14:26 than that. All right. Um sooner or
14:28 later, we're going to get to this
14:29 valuation of uh We'll get to it now, I
14:31 guess.
14:33 $1.25 million. What? For your company.
14:36 You've been open a year. Boy, let's hear
14:39 it. Yeah. What are the sales?
14:42 So, we've actually started selling about
14:44 5 months ago. We've been open a little
14:46 less than a year. To date, we have
14:48 $100,000 in sales. Wow. The the
14:51 valuation is where it is because we've
14:52 been approached by the country's largest
14:54 national distributor. And they have got
14:56 nine warehouses across the country. And
14:59 if we were to put a pallet in each
15:00 warehouse, that would be a little over a
15:02 million in revenue. Okay. Have they
15:04 actually ordered?
15:06 They They haven't ordered because we
15:08 can't fulfill.
15:10 What is it retailing for? And what are
15:12 you making it for? So, the peanut
15:15 retails for $10.99.
15:18 Wa. And the the almond is is $12.99. And
15:22 how much do you make it for? We make the
15:24 peanut for $2.90 and the almond for $4.
15:27 With this investment, we'll be able to
15:29 secure raw materials at a much higher
15:31 volume. It would bring the price of our
15:33 peanut butter down a $150.
15:35 See if you can convince me on the $1.3
15:38 million value. It's the brand. The
15:43 brand, but who knows this brand today?
15:46 Our name is starting to become
15:48 synonymous with the health the health
15:50 nut butter. Tell me about the reorders.
15:52 Are you getting reorders? We are getting
15:54 every single week. Okay, that's how many
15:56 accounts? 32 uh retail outlets. That's
15:59 it. Out of 35,000 my So you got 32
16:01 retail outlets and we have online. We
16:03 have online. What percentage of your
16:04 business is online? It's about 50%. So
16:06 you're selling about 70 units a month
16:08 from most stores and they're reordering
16:10 and they're continuing every week.
16:12 Absolutely. Dennis, I I'll give you
16:14 this. It is a great name. You guys are
16:16 big guys. You work out obviously. It's
16:18 not like a guy like Kevin selling your
16:20 product. Was that an insult? No. No.
16:23 It's just fact. Come on the squash court
16:25 with me. kick your ass.
16:28 But I I think my challenge is this.
16:30 You're asking for a value of the company
16:32 as though you've already made it, right?
16:35 As though you've already got all those
16:36 big orders. But we cannot commit to
16:38 these to these distributors if we cannot
16:41 deliver. But that's what you need.
16:44 That's not what the business is worth. I
16:46 mean, are you saying you need the
16:47 $250,000 in cash to fulfill the orders
16:51 no matter what? Well, no. That's to to
16:54 do a few other things. That's to staff.
16:56 That's to sh up a few of our equipment
16:58 in our facility to to be able to reduce
17:01 our overall cost. Right now, we're at
17:03 290. That jar initially cost us $4.
17:05 Okay. So, you're processing and and
17:07 putting this all together yourself.
17:08 Absolutely. And you're packaging it
17:10 yourself. When we started this brand, we
17:12 had fitness pros come to us. Now, these
17:14 are these are bodybuilders. These are
17:16 bikini people. Guys, you listen listen.
17:18 I like you. We're from the same tribe.
17:20 We're exactly the same.
17:23 What tribe is that, Dave? You know,
17:26 young, handsome, and built. You know it.
17:30 But the issue here is your valuation is
17:32 so crazy, and you're you're you're
17:33 working on
17:34 assumptions. I'm a customer, but not an
17:38 investor. I'm out.
17:41 Your branding and packaging is terrific.
17:44 That's your work. That never She never
17:46 says that. She never says that. Thank
17:48 you. Everything's done in house. I feel
17:50 like I'm opening expensive women's face
17:53 cream. This is a
17:55 heartbreaker. It really is. Great
17:58 packaging, great name. What a shame that
18:01 you priced us at
18:05 $250,000. What a shame.
18:09 She's basically calling you bozos. And
18:11 we're here to negotiate, too, just with
18:12 you. For me to give you
18:14 $250,000, I would have to take 80% of
18:17 the business.
18:19 I might be willing to do it for 79.
18:22 Let me ask you a question. I just want
18:23 to finish up. Let me ask you guys a
18:24 simple I want to finish. Barbara, you're
18:26 driving me crazy. I want to finish one
18:28 paragraph. You're driving me crazy.
18:31 I just want to tell you I'm so sad, but
18:33 I'm out
18:36 now. She's dead to you. All right, let's
18:38 move on. That purchase order from the
18:40 distributor. Yeah. Mhm. There's a whole
18:43 industry of people that give you cash
18:46 for purchase orders. Why didn't you get
18:48 the purchase order?
18:50 It was unfortunately due to the
18:51 fulfillment. We need the capital to
18:54 bring the cost of the jaw down a little
18:56 bit more. What is the wholesale price
18:57 you're selling at? Uh wholesale for uh
18:59 for peanut is uh 575 and almond is uh
19:03 725. So your margins aren't big enough
19:04 cuz they don't have the capital. So um
19:07 let me take a stab at it. No, no, I
19:09 won't give you 250,000 for 20%.
19:13 There is no chance in I can't even say
19:16 what I want to say. Kevin, Kevin, we
19:18 Kevin, we know you love to to to wet
19:21 your beak and we want you to be part of
19:25 the Nuts and More team. $250,000. I'd
19:28 have to own the whole business, all your
19:31 cars, all your houses. Well, you can
19:34 adjust the equity. Okay, I need
19:38 264%. I'm out.
19:42 Give me a total dollar amount that you
19:44 need to buy in order to get your prices
19:46 down to where you want them to go. About
19:49 um $7,000. $7,000. Yep. That's it.
19:53 That's just for peanuts. For peanuts,
19:55 what I'm trying to figure out is the
19:56 least amount of cash it'll take to get
19:58 you to the the highest margins. Sure.
20:01 How much in aggregate will you have to
20:03 spend to get to your optimal cost of
20:05 goods sold? I think Mark's on to
20:07 something. All right. If I spent
20:10 $50,000, I can fulfill that one order,
20:13 make a little bit of money, and get my
20:15 volume going. Is that right? Absolutely.
20:18 Mark, I I think at 50,000 they lower
20:21 their price point, and they can take
20:23 orders.
20:25 I'm going to propose something, Robert.
20:27 Tell me if you'd like to join me. Yeah,
20:28 I'm listening. We have
20:30 $250,000 for 35%. No, Mark. Hold on. Let
20:34 me finish. Let me finish. Right. But
20:37 there's a
20:39 contingency $75,000 in cash upfront and
20:44 then the balance where and when you need
20:46 it to fund future purchase orders. So I
20:50 love that. But I was going to offer you
20:52 250,000 for
20:54 50%. I think there's a lot of value in
20:56 having two sharks. And look, let's be
20:58 honest, you haven't proven the business.
21:00 You've proven a
21:02 concept. You guys are nuts if you don't
21:05 take that. Why
21:09 don't you guys go think about it? Yeah.
21:10 Can we think about it? Yeah. So we can
21:11 talk about it, too.
21:14 All right. So, what do you guys think?
21:16 50% is way too way too much%. I actually
21:18 like when No, no. I like I like a cube
21:21 in this. I love it because we're going
21:23 to crush it. You know, we're going to
21:24 crush it. 50% is going to create more
21:26 problems than it solves simply because
21:27 there's 16% each and they're going to
21:29 get resentful. I'd love to have Robert,
21:31 too, but let's uh it's too much. It's
21:33 too much. It's too much. These guys are
21:34 tough. They're going to negotiate us up.
21:36 You start at 35. We're going to end up
21:37 at 25. Let's just see what happens. Here
21:39 they come. Cool.
21:43 All right, guys. What you guys
21:45 decide? We We would love to have both of
21:48 you. We think 50% is is too much. We've
21:53 worked unbelievably hard and we are
21:54 going to continue to work hard. would
21:57 really love to get you down maybe to 30%
21:59 with that tiered
22:01 approach because we can prove to you
22:03 with that approach you're putting little
22:05 skin in the game to see what the return
22:08 will be and to know that you've made a
22:10 solid sound
22:12 investment and you've got three guys who
22:14 are working their tails off to get that
22:16 home.
22:17 Robert, what's your feelings? Look, I'm
22:20 not in at
22:26 30. I'll go down to Mark's 35.
22:31 35. 35.
22:41 Think you guys got a deal?
22:47 All right. Will I look like you if I am?
22:50 [Music]
22:52 Nice job. Thanks, guys. Have a good one.
22:56 [Music]
22:58 You know what I loved about them? They
23:00 didn't get caught up in the big number.
23:02 They really wanted what they needed.
23:04 Yep. Did you bozos just pay4 million
23:07 dollars for peanut butter? Yes.
23:12 My name is Sean Patel and I'm from Las
23:14 Vegas, Nevada. Today, let's start out
23:16 with this simple problem. I've developed
23:17 an educational program that helps
23:19 students achieve their dreams. Whether
23:21 it's getting into the college they want
23:22 to, the scholarships they want to, and
23:24 just be the best that they can be. My
23:26 parents grew up very poor in Gujarat,
23:28 India, and they immigrated to America
23:30 with just $65 in their pockets. Through
23:32 hard work, they were able to save enough
23:34 money to open a budget motel. That's
23:36 where I grew up. Hi, Mom. Hi, Dad. My
23:38 parents instilled in me the value of
23:40 education. Because of my hard work, I
23:42 ended up getting a full ride scholarship
23:44 to the University of Southern
23:45 California, where I'm currently getting
23:47 my medical degree. At the same time, I'm
23:49 doing my MBA at Yale. All right, guys.
23:51 Welcome to class today. Now, I need a
23:53 Shark to help me take my business to the
23:55 national level. With the Shark's
23:57 investment, I believe I can help
23:58 millions of students achieve success
24:00 just like I have. It's important for me
24:02 to succeed because my parents have
24:04 invested so much in me, and I want to
24:06 make them proud. My success is their
24:09 American dream.
24:10 [Music]
24:26 Hi Sharks, my name is Sean Patel. I'm
24:29 from Las Vegas, Nevada, and I'm seeking
24:32 $250,000 in exchange for 10% of my
24:34 company, 2400 Expert SAT Prep. So, we
24:38 all know men lie, women lie, but numbers
24:42 don't. So, let me give you some numbers.
24:44 Since 2005, 14 million students have
24:48 taken the SAT, and only 3,000 have
24:51 gotten a perfect 2400. That's just
24:55 002%. And I happen to be one of those
24:59 3,000. So, I know you might be thinking,
25:01 "Oh, you're just some genius. How can
25:02 you help other students?" But I am by no
25:05 means a genius. Actually, the first time
25:07 I took the SAT exam, I only scored
25:09 around average. But after diligently
25:11 self-studying for this test, I was able
25:13 to raise my score 640 points to a
25:16 perfect 2400. Now, I'm sharing my test
25:19 prep secrets to help other students
25:21 prepare the way I did in high school.
25:24 Many of our students have been admitted
25:25 to Ivy League schools, have won millions
25:27 in college scholarships, and some have
25:29 even gotten perfect SAT scores
25:31 themselves. Now, 2400 Expert is looking
25:34 to expand across the nation. So, Sharks,
25:37 who's ready to score big off My Perfect
25:39 Score. Wow, that's impressive. Thank
25:42 you. Tell us how it works. It's a 6 week
25:44 course, and up until just about 6 months
25:47 ago, it's always been in-person
25:49 classroom style. Um, in Las Vegas, we
25:52 just started offering online courses 6
25:54 months ago. Those are actually starting
25:55 to bring in more revenue than even the
25:57 inperson. What's the revenue today? So,
26:00 we've been in business for about four
26:02 years and we've done $1.2 million in
26:04 sales. Wow. That's in the total period,
26:07 right? That's in the total period. But
26:08 what's really exciting about that is
26:10 pretty much every year we've doubled
26:12 revenue. So, about half of that 1.2
26:14 million came just last year based on Las
26:16 Vegas. Here's the good news. Um, I know
26:19 everything about the test prep market.
26:21 Okay. I was a shareholder in Kaplan in
26:23 the Princeton Review, both of them.
26:26 Tell me what does it cost you to acquire
26:28 a student? So to be honest with you, we
26:31 don't have great analytics on the
26:33 customer acquisition costs, but what I
26:35 can tell you is pretty much all of our
26:37 customers come from word of mouth. So
26:39 it's parents and students who have heard
26:41 about our score improvements. I get that
26:43 for the Las Vegas market, but you want
26:44 to scale this and compete with the big
26:46 boys in test prep, you need to figure
26:48 out the answer to that question because
26:50 that's what they spend all their time
26:51 doing. Yes. No, no, I agree with you and
26:54 and that we're definitely working on
26:55 that right now. So, what does the course
26:56 cost? So, the in-person course cost for
26:58 a 60-hour course cost
27:00 $999. So, that comes out to about $17
27:03 per hour. And what does it cost online?
27:05 Online it's $599 for those 60 hours. So,
27:08 under $10 an hour. So, on the 600,000 in
27:11 sales last year, how much money did you
27:12 make? We made about $220,000. What
27:16 percentage of that is online curriculum?
27:17 We just started 6 months ago online. So,
27:19 about 40% is now bringing online. But so
27:21 now we have students enrolling from
27:23 China, India, London. Online, live where
27:25 you still have an instructor or is
27:26 online, recorded and packaged. So I'm
27:29 pretty much the face of the company and
27:31 a lot of students want to take courses
27:32 with me. So I teach one course a week um
27:35 for online. So I'll I'll tell you a
27:37 little bit about my background. Um I'm
27:39 currently an MDMBA student at both USC
27:42 and Yale. Um and the reason that I am
27:45 where I am today is really because of my
27:47 SAT score. My SAT score changed my life.
27:50 Um, I grew up in my parents budget
27:51 motel. I went to urban public schools in
27:54 the worst school district in the nation.
27:55 Uh, but because of my SAT score, I was
27:57 admitted into prestigious universities.
27:59 I received a half a million dollars in
28:00 scholarship offers. I even got to meet
28:02 the president of the United States.
28:05 Why does 24 expert get the incremental
28:07 student that's never heard of you? Uh,
28:09 we have an average SAT score improvement
28:11 that's industryleading 376 points in 6
28:14 weeks. Uh, that's compared to our
28:15 competitors that are doing 50 to 100.
28:16 So, it the product's good is what you're
28:18 telling me. But how do I let the how do
28:21 I let the world know that you even
28:23 exist? Because the whole strategy of the
28:26 SAT market is customer acquisition. It's
28:28 the whole deal. Well, better yet, what
28:31 are you going to use the money for? Yes.
28:32 So, the money is going to be used to
28:34 open a dozen new locations. So, the
28:37 markets that I' I've selected are New
28:39 York, Los Angeles, San Francisco,
28:41 Washington DC, Philadelphia, and Boston.
28:43 But now, your online operation is you
28:45 teaching live. That's one. We could
28:47 always have other instructors teaching
28:48 live which have also enrolled. Does it
28:50 need to be live all the time or or could
28:51 it be packaged content? Oh, so that's
28:53 the great that's a great question.
28:54 Everyone So our customer is not the high
28:56 school student. It's the high school
28:57 parent and parents do not want the
29:00 pre-recorded online course for their
29:01 high school student in general. I'm
29:04 currently in the online educational
29:06 space. Now, you brought up a very good
29:08 point. the parents are buying it and
29:10 making sure that the kids themselves
29:13 take it, but they they don't believe
29:14 they're going to go and sit down in
29:16 front of the computer every day. Yeah.
29:17 But I don't see the scalability in
29:20 regards to where I can help you with my
29:22 model. I can't take this ride with you,
29:25 so I'm out. Thank you, Damon. Appreciate
29:27 that. Do you want to be a doctor? That's
29:30 a good question. Um, I've always wanted
29:31 to be a doctor or an entrepreneur.
29:35 I've So, I've always been in school.
29:36 I've always So that's I've always been
29:38 in school, but I've also always always
29:40 Sean, I think you're digging yourself a
29:41 hole here because an investor, a shark
29:44 investor wants to hear that you're
29:46 totally committed to dominating the test
29:48 prep space and it has to be oozing from
29:51 every pore. We have to believe it.
29:56 I don't believe you.
30:00 Do you want to be a doctor? That's a
30:02 good question. Um, I've always wanted to
30:04 be a doctor. Uh, entrepreneur
30:07 You can't be a part-time entrepreneur.
30:09 You got to have somebody driving the
30:11 business. And you haven't articulated a
30:13 strategy for customer acquisition. Okay?
30:16 So, I'll give you I'll give you the
30:17 exact strategy. So, yes, I'm in medical
30:19 school. I realized in medical school
30:20 that my business was taking off. We
30:22 barely had enough students for the first
30:23 course. What I'm doing is focusing on my
30:25 business to scale it. I'm taking an
30:26 extended summer just to focus on my
30:28 business. I think that the electronic
30:31 content is really important. I
30:33 understand you say that people won't sit
30:35 and do it, but I think that if you have
30:37 parents and you're a student that really
30:38 cares, even if just a certain percentage
30:41 stick and you can sell a lot of the
30:43 electronic content, then that's the way
30:45 you're really going to drive this
30:46 business. But I, you know, entrepreneur,
30:49 doctor, you're not
30:51 sure. I don't see me giving you the
30:54 money to support this. I'm not sure that
30:56 you know which direction you want to be.
30:58 I'm out. Well, thanks, Lori. Appreciate
31:01 that. Okay. Um, let me take a shot at
31:04 it. I would just like to mention that I
31:05 would be open, Kevin, to a licensing
31:07 deal with Princeton Review or Kaplan if
31:08 that's something that would be
31:09 interesting to any. Yeah, I I I don't
31:11 know if they do that. They feel pretty
31:12 confident about their content. Yeah. No,
31:14 of course. I I was just throwing it out.
31:16 I think it's a great idea. I think you
31:17 could sell a lot of it. But my challenge
31:20 with it is you're you're kind of playing
31:23 at it. You want to be a doctor and you
31:25 want to be an entrepreneur. And then
31:27 when Kevin asked you, you said, "Oh, I'd
31:29 also be interested in maybe licensing
31:31 him." You know, business isn't that. You
31:33 can't play a business because you're
31:35 gonna come across a guy who doesn't want
31:37 to be a doctor and he is going to kick
31:40 your
31:41 behind. I can't invest in a part-time
31:44 entrepreneur. I'm out.
31:51 The great thing about this market that
31:53 I've known for years, it's recession
31:55 proof. Yeah. And um it's huge. Your
31:58 biggest problem, Sean, is you are not
32:01 110% committed. The the quality of
32:03 entrepreneur that gets on that carpet
32:06 has to be so committed before they get a
32:09 check from a shark. I give my money to
32:11 people that will die for their business.
32:14 They'll give up their lives for
32:16 it. That's the kind of general I want to
32:19 back. You're not that kind of general.
32:21 I'm out.
32:26 Um, look, really, where do you want to
32:28 be in 10 years? That's the question
32:30 because you will get bored with this. I
32:33 would love to have this be a $20 million
32:36 revenue business. But my dream my dream
32:38 is also I would love to be a
32:39 dermatologist and opthalmologist who
32:40 works twice a week. That would be I
32:42 believe I'm the hardest working person I
32:44 know other than my father. My father
32:46 came to this country with like $65. He
32:48 worked from 5:00 a.m. to 11:00 p.m.
32:50 splitting his time between a pharmacy,
32:51 gas station, and motel. And I got my
32:54 work ethic from him. I've worked Look,
32:55 one of the beauties of Shark Tank and
32:57 people, these guys always give me a hard
32:58 time when I do this is you get to aqua
33:00 hire all the time. Work more often than
33:03 not, you're betting on the brains in the
33:04 company. Yeah. So I I like opportunities
33:06 like this, but I have questions. Okay.
33:08 Right. So what I want to know then is if
33:11 you pivot Yeah. that whatever you go in
33:14 exclusive of medicine. Yeah. Right. This
33:17 all becomes part of the ride. Of course.
33:19 This is always part of the ride. This is
33:20 my main thing. Okay. But my baby Yeah.
33:23 All right. But if the baby expands and
33:25 you have other children, Yeah. I want I
33:26 I want to be, you know, the godparent to
33:28 those children. You would of course be
33:29 the god. Okay. So, what I'll do is I'll
33:31 offer you the the
33:33 250k for 20%. Um I I think that
33:37 contingency is fine. I'd like to make a
33:39 counter offer. Oh, 15%. So, meet in
33:42 halfway there. 300,000. No.
33:49 Oh, not because if you're going to be
33:51 the guy, the biggest need you have is
33:53 infrastructure and taking off all the
33:55 administr.
33:58 Could we do 300,000 for 20%. Nope. Oh,
34:02 you keep dropping your pistol when you
34:03 jump for 10. Why are you doing that?
34:10 Now you're going 300. All right. I take
34:12 your offer, Mark. Which
34:14 Thanks. Appreciate it. Congratulations.
34:17 Make a lot of money. Thanks. Appreciate
34:18 it. Impressive.
34:22 Yes. Oh, yes. That was amazing. Mark
34:26 Cuban is my business partner. That's
34:29 That's pretty cool.
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