Offering beer to the investors of Shark Tank is one way to help seal a deal.
On Sunday's episode of ABC's Shark Tank, Kanga co-founders Logan LaMance, Austin Maxwell, and Teddy "Hops" Giard brought beer to demonstrate how their beverage cooler Kase Mate works and left with a deal from Mark Cuban. The Kase Mate is an insulated sleeve that wraps around a pack of beer or soda cans and keeps it cold for up to seven hours. The co-founders had generated $103,000 in sales, about 30 percent of which came from a Kickstarter campaign that raised more than $34,000. The remaining 70 percent came from corporate clients that ordered custom versions of the sleeves with their company logos on them. LaMance and Maxwell recently graduated from Clemson University, while Giard is still a student. The co-founders came to the Tank seeking $100,000 for 10 percent equity in their company.
"Think about it, Sharks. If the case of beer is already cold when you get it, why not just keep it cold the entire time you're actually going to drink it?" LaMance said during the pitch.
The patent-pending Kase Mate serves the same purpose as a conventional cooler but doesn't require ice, which can add a lot of weight, and isn't as expensive as other coolers on the market, some of which sell for more than $200. LaMance got the idea after a college class assignment asked him to come up with a solution to a problem he faced.
One of the most impressive parts of the pitch came when the co-founders explained they'd invested only $833 to start the company. Their margins also weren't bad: It costs Kanga about $9.60 to make a Kase Mate, which the company sells on its website for $29.99 for a 12-pack size. A 24- or 30-pack size sells for $34.99, while the company charges $20 per unit for custom Kase Mates. Shortly before appearing on Shark Tank, the co-founders received a $16,000 purchase order from Anheuser-Busch, the largest brewer in the world, which also expressed interest in purchasing another 10,000 units.
One of the most compelling aspects of Kanga's pitch was Maxwell's personal story. He explained that after watching entrepreneur Justin Fenchel and his co-founders land an investment on Shark Tank in 2014 for their alcoholic punch business BeatBox Beverages, he contacted Fenchel and asked if he could work for him. Five years later, still inspired by Shark Tank to pursue entrepreneurship, Maxwell appeared on the show himself.
"Now I'm up here and have the opportunity to present to you guys with my own company," Maxwell says. "This has already been a dream come true for me."
Before the other Sharks had a chance to weigh in, Cuban made the co-founders a take-it-or-leave-it offer: $100,000 for 20 percent of the business. They immediately accepted, and Giard did a backflip in his kangaroo costume as they left the room.
"Anybody watching this: We were in your shoes a year and a half ago and now we're here," LaMance said at the end of the show. "Anything can happen. Just believe in it, go for it, be crazy enough to do something about it."