Chris Crawford and Eric Fagan are two surfers who created the RinseKit, a portable shower system which allows you to shower anywhere! They have set the proposal at $250,000 for a 5% stake in the company. Will the sharks take the bait?
Two surfers from San Diego, Chris Crawford and Eric Fagan have created the ultimate portable shower system: The RinseKit. Every RinseKit comes with a small adapter that can be attached to a tap, all you have to do next is attach the nozzle and connect it to the RinseKit! Now you have 65 psi trapped inside the RinseKit, ready to use at any time.
The full process takes about two minutes and it uses about two gallons of water. Once you are ready to use the RinseKit, you hook up the nozzle and you get the same water pressure that you would get out of your garden hose. There are two settings, one that allows you to shower for 5 minutes and another that works for 30-45 minutes.
Whether you want to go camping, fishing, hunting, or surfing, the RinseKit is the best companion you can bring with you.
It was later on revealed that the ultimate goal with the RinseKit is to create a brand new market based on this first product. They have been developing new lids that make it possible to do the dishes using the RinseKit, they have got heaters, shower poles, etc.
Chris used to own a pool business, which helped him understand hydraulics, plumbing, electrical, and engineering. On the other hand, Eric helps with the sales and operations of the business, since his background is running global sales in operations for companies, so his company is investing in the RinseKit.
Chris and Eric aren’t the only investors with equity in the business, with Chris owning 60% of the company and Eric’s company owning 10%.
What about sales? Each product being sold for $89.99 retail and $45 wholesale. Although the company is actually $550,000 in debt, the RinseKit is also expected to make between $2.1 million to $2.3 million this year, with just 5% of that value being profit (around $100,000).
The reason why the profit margin is so low at the moment is because of marketing expenses, where they are spending about 10% of their revenue. It was later revealed that Eric’s company earns some sales commission, which varies from 5% to 10%.
After the sharks analyze the evaluation, they reach the conclusion that the two entrepreneurs evaluated the company at $5,000,000, which is a gross over-estimation the company’s actual net worth.
Mark Cuban was the first shark to back out of the deal after claiming that there are certain shops and outlets that would be the core customers, and these do not really intersect with Mark’s usual customer base.
Kevin was the second shark to share his expertise with the two entrepreneurs. He claimed that, although it’s quite feasible that the company will eventually reach the evaluation set, the 5% stake in the company for $250,000 means it would take years before the shark would get his or her money back.
Robert took the time to say he really liked the product and saw the need for it, although he did note that if the product ends up not being as successful as expected, Eric would still make money off of sales Commission, and Robert would just end up losing money. And for that reason, he offered $250,000 for 20% of the company.
After Robert made his offer, Kevin decided to offer $250,000 as a loan for 5% equity.
Lori was the third shark to make an offer, asking for $250,000 as a loan for 5% equity + sales commission. Keeping in mind she is known as “The Queen of QVC” and can, therefore, sell large amounts of product within a short period of time, a lot of the sharks praised her offer.
Seeing a lot of the sharks are trying to get a deal, Robert changed his offer to $350,000 for 20% equity.
After a heated argument about whose offer to take, Daymond decides to make an offer: $250,000 for 7.5% equity plus commissions on the retailers where this product is sold into. Daymond has several relationships with retailers, he is on the board of the Petco foundation, he would also sell to home depot, tractor supply company, HSN (Home Shopping Network), Walmart, Target, and more.
The two entrepreneurs ended up quickly picking Daymond after being persuaded by the low-equity offer.
Although it’s still too soon to receive more news about the RinseKit, you can find out more about the company on their website www.rinsekit.com or buy the products online.
Original Air Date: February 3, 2017
Entrepreneurs: Chris Crawford and Eric Fagan
Proposal: $250,000 for a 5% stake in the company
Investor: Daymond John
Final Deal: $250,000 for 7.5% equity plus commissions
RinseKit is a portable pressurized shower system that helps you clean up wherever you go. Think about it like having a hose to go! There is no pumping or no batteries needed. The pressure inside the tank is 65 psi (standard home pressure) and can be filled within in 20 seconds time.
Each tank can hold up to 2 gallons (7.5 liters) of water and deliver pressurized spray for up to 3-4 minutes. There are 7 spray settings for you to choose and there are no moving parts. You can fill hot or cold water for an infinite number of times.
Watch this video to learn how to use this product:
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