Bedano, Jeremy

Cruz, Leo
Lacar, Sean
Macawile, Mark
 (ACCEPTED) Offer A: 1.25M for 100% of
the company, $100k compensation to run
the company for 3 years, 7.5% of royalties
for everything sold.
Offer B: $ 500k for 100% of the garden
hose piece for 5% of perpetuity

Positive:

Jeff has an existing patent for his product

$1.25M for
100% of not easily copied
the
company, The potential market size for his
etc. technology is huge: oil & gas companies,
garden hoses.

Negative

Jeff focus on his background and

passion not seeing other market
opportunities for his invention.
 Offer A: $500k shared by two investors, for 50%
of the company
Offer B: $500k for 51% of the company with the
plan of selling the company.
Offer C: $500k for 35% of the
company
Positive
Favorable window of opportunity money
stuck on house)
$500k for Proven/clear customer need has track
35% of the
company
record
Favorable competitive dynamics Design
and Functional Patents
Personal Passion I love shoes
Ability to implement Company is
operational and is expanding
Negative
Mark Cuban, Daymond John Available Suppliers and partners current
Kevin O'Leary, Barbara Corcoran, Robert Herjavec manufacturer is not profitable with her new designs
Appendix:

HYCONN

1 Stop the video at 2:09 (Whos ready to make millions with me?). What questions would you ask? Try to ask questions that help clarify
what drives revenue and cost.

How much is a Hycon per unit?

How many times do you need to replace the standard hose?
33,000 Fire Departments, and millions to be made. Do you have other target markets in mind?
How much do you earn per unit?
How would you sell it to fire departments?
What is your revenue model?
Do you have other income streams aside from selling the hose?

2 Stop the video at 4:22 ($500,000). Are there other questions you would like to ask? Would you invest?

How will you use the $500,000?

Have you considered other distributors?
Would you like pursue Hycon to be the standard fire hose accesorry? How will you do it?
When will you recover the $500,000?
Have you considered licesing out your IP?
5 Stop the video at 6:04 (Jeff, do you have anything else in your pockets? No, sir.). Why are the Sharks getting interested now? What
changed when the entrepreneur showed a consumer product version of his innovation? Would you invest? If so, what would you offer in
terms of both cash and equity stake? What does your offer imply about the valuation you are making with regard to the business?

Because the potential, the large market potential, low barrier entry for him, better distribution channel.
Larger market compared to fire department, easy to market. possibility of different variants.
Yes.

300k 30% equity.

Valuation is $1 Million.

6 Stop the video at 6:33 (Wait a second. Before you consider that madness...). What is Mark Cuban offering? Why did he offer an
employment contract and a percentage of profits plus cash and equity? What would you offer if you were Kevin OLeary?

$1.25 Million for the company,

Mark Cuban wants control over the company and he wanted who understands the company and has the drive.

Kevin will get 40%, inventor will get 60%, @ $500k.

Buy company for 1.25M, not an employee, gets royalty @ 5%.

7 Stop the video at 7:20 (Ill pay you a royalty in perpetuity.). What is the difference between the two
offers? What incentives do they provide to the entrepreneur?

first offer: 1.25M, 100k annual salary, certain percentage of the profit after hurdles are met.
second offer: 100% ownership of the garden hose piece only @ 500k, 3% perpetuity pay back.
With the first offer, he's still involved with the company.
With the second offer, he can do other things aside from the hose, stable income, but he loses control of the company.

8 Stop the video at 7:45 (Youre sucking the life out of him.). As the entrepreneur, what questions would you have for Mark and Kevin?
Would you want to counter with a different offer?

For Mark (1.25M)

Discuss the details of the employment and the terms.
What is your basis for $1.25M?

For Kevin (500K)

What is your basis of the $500k?
What are the terms of the 3% perpetuity, does it apply to other products derived from the small garden hose piece.

Yes we will counter the offer.

9 Stop the video at 9:21 (between the two offers.). What offer would you accept?

Will get the 1.25M, will run the company, @7.5% royalty.

10 Play the video to the end. Take a moment to fill in your worksheet. What insights did you get about pitching opportunities from watching
this video clip?

See Presentation
ONESOLE

1 Stop the video at 0:23 (I am seeking $500,000 for 20% equity in my company.). What does this imply about Dominiques thoughts about

the value of her company today? Do you think it is worth this amount?

Dominique thinks that her company is valued at $2.5 Million. No, we still need more information.

2 Stop the video at 1:38 ( Cause you dont have Onesoles on.). As investors, what questions would you want to ask?

How much would sole and the strap cost?

What is your financial status? Do you have positive cash flow? How ould you compete with other shoe brands that are already

established? Who are your closest competitors? Have you patented that?

3 Stop the video at 4:59 (Ive never had a business class, never had a shoe design class.). How would you respond to the entrepreneur?

You do not need a business degree to make a profitable business. Have you tried employing an person with a business degree?

4 Stop the video at 5:47 (What a fascinating story!). What have you learned from the questions that the investors asked? As one of the

Sharks, would you make an offer? If so, what offer would you make?
 Where would you use $500,000? Confidence is important. Why are you not confident, even with sales like that?

5 Stop the video at 6:06 (And you get the $500,000.). Why did Robert Herjavec want to involve the other four Sharks? When do you want

to syndicate a deal and bring others in? Will the other Sharks want to share the deal with Herjavec?

Do distribute the risk. If the business is too risky and you do not want to take the risk alone or you do not have enough spare money

to fund the business. Based on their gestures, no they do not want to share.

6 Stop the video at 7:59 (The buyer will fire you after you are filthy rich.). Should Dominique take the offer?

Nope. Specially when historically the business is doing well, you can make a consistent recurring income from the business that

could earn more compared to a single buy out.

7 Stop the video at 8:19 (What are you going to do?). Review the offers on the table. What does each deal imply in terms of pre-money

and post-money valuation of the company? What does each Shark bring in terms of connections and experience? Which offer should

Dominique accept?

The offers are:

Offer 1: $500k shared by two investors, for 50% of the company

Offer 2: $500k for 35% of the company

Offer 3: $500k for 51% of the company with the plan of selling the company.

He should accept Daymonds offer, which is Offer 2.

8 Play the video to the end. Take a moment to fill in your worksheet. What new insights about analyzing and pitching opportunities did you
get from watching this video clip?

See Presentation