When business school classmates Ryan Fant and Nayeem Hussain submitted their product idea to New York University's Entrepreneurs Challenge in 2012, they never imagined that just two years later they'd be pitching the hosts of ABC's Shark Tank.
Fant and Hussain's company, Keen Home--one of Inc.'s 2014 Coolest College Startups--makes a product called the Smart Vent, a wirelessly connected air vent that automatically opens and closes to intelligently redirect airflow through homes. By controlling temperatures in individual rooms using a smart phone, customers can save on their monthly energy bill.
Keen Home's founders came to the tank seeking $750,000 for 10 percent of their company, equating to one of the largest valuations in Shark Tank history.
"There was certainly some initial eyebrow raising around that level of an ask," Hussain says. "We were able to overcome that initial skepticism fairly quickly, and then the conversation became more nuanced around how we were looking to market our product and what the vision was for future products."
While the founders were able to attract multiple offers, not every shark was willing to bite.
"This is a feature, not a product," said Mark Cuban. "You have an opportunity, [but] you're a long way from it."
So how did the young founders win over the other sharks?
While Keen Home has yet to generate revenue, the company has already pre-sold 35,000 Smart Vent units to Lowe's Home Improvement, translating to more than $2 million in future sales.
Sharks Daymond John and Kevin O'Leary offered $750,000 for 25 percent of the company, but ultimately lost out to co-host Robert Herjavec, who had enough confidence in the business to ask for just 13 percent equity.
"What I'm really fascinated by is the compliance that's going to happen in this industry," Herjavec said. "It's going to be driven by the insurance companies for smarter homes, and I think that's going to take all of this to a higher level."
With that, the NYU business school grads shook Herjavec's hand and sealed the seventh-largest company valuation in Shark Tank history.
"The thing we really liked about Robert was his alignment about the vision for the company," Hussain says.
Stay tuned for more recaps every week.