First Defense Nasal Gold! (Episode 2.1)
Fourth Guest: Joe Moore, First Defense Nasal Screens
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Watch the episode for yourself to see the fireworks, but here’s a summary of what happened next:- Kevin offered $500,000 but wanted a 15% royalty on every unit sold until he recouped his $500,000, and 20% equity. He tried to push the deal saying that the other sharks were out.
- Mark said “not necessarily true” and offered to work with Kevin. OK
- Daymond offered $800,000 for 30% and a 10% royalty
- Kevin changed his offer to $1,000,000 for the whole company right now (which was the lowest offer of the day).
- Daymond countered with $1,000,000 for 30% and a 10% royalty until he recouped his investment.
- Robert offered $2,000,000 for the whole business, with Joe keeping a 10% royalty. Joe said he was interested, but not for $2,000,000. Robert countered with $4,000,000, the largest sum offered in Shark Tank history!
- Joe, God Bless Him, had the courage to counter with $5,000,000 and 15%. Robert said no, and was out. That left Mark, Daymond, and Kevin.
- Presentation: Joe was rough, but very passionate and very strong. Come to find out, he was a cancer survivor and a Marine Corps veteran – and it showed.
- Business Strengths: The passion of the owner, and the patents and orders. Intellectual property rights and market traction are key to attracting investors.
- Business Weaknesses:. The product probably won’t appeal to people focused on their self-image.
- The Deal: the original offer was $500,000 for 10% of the company. Kevin wanted $500,000 for 15% of revenues, then 20% of the company. Robert
- Sharks: The offers and counteroffers were outstanding! Kevin was his usual “sharky” self, insulting Barbara, Robert, and Daymond by saying the Mark and he were the only ones who had sold a company for a Billion, inferring that they were by definition much better partner candidates.
- Fullfill those orders and make a run at the other mid-eastern countries.
- Find a way to make a similar product that is inserted into the nose (at least a little bit) so it appeals to those who are concerned with their looks.
- Investors love a company that has a lot of pending orders, patents, and has already made a significant investment.
- Be prepared – having the $8 million contract in his hands for review was a very smart move.
- Be very careful of royalty agreements – they suck up cash needed for growth, artificially increase the price of the product, and can take up an enormous part of the profits. (Contact us for a more detailed explanation if you are considering a royalty agreement as a part of your capital strategy.)
- You can learn more about First Defense Medical Systems at www.filteryourlife.com and 877.MyAir.09. You can buy them online for as low as $10.
(If you are interested in raising capital for your business, visit us at www.AngelNetwork.com)
I watched the First Defense Nasal screen segment on Shark Tank last year and purchased several packages. Since then, I have been using them when I mow the grass and they exceeded my expectations. I live in Georgia where the pollen count is excrutiating and now I don’t know what I would do without them. And not only do they keep the allergens out of my sinus cavity, the screens are actually comfortable to wear. I’d like to thank Shark Tank for airing this product and I’d like to thank Joe for inventing them.