first in the tank is a Cosmetic Company for an underserved Market [Music] hey sharks I'm John and I'm the viewer we're from New York and we're seeking six hundred thousand dollars in exchange for five percent of our company do you know what everybody in this room has in common right now besides being on television we're all wearing makeup the chances are the women are fine applying and wearing makeup but most men aren't nearly comfortable enough to admit or use it sharks this happened to me on the day of my wedding the greatest day of my life and I woke up with is it and not just any zit as you can see I mean this thing was the mother of all zits okay it was a volcano it was just waiting to erupt yuck and while there were makeup artists there at the wedding I was too embarrassed to do anything about it and so my blemishes were there to stay for the thousands of photos that were taken that day every guy has an experience like this whether it's a first date an important pitch like here on Shark Tank or just coffee with a friend when you look your best you feel your best which is why she strix is changing the way that men can instantly fix their appearance with you guessed it it's makeup for men strix is the first company ever to engineer cosmetic and skin care products with completely custom formulations and packaging geared towards men we launched with a Sleek discreet and very sexy concealer tool and a tinted moisturizer and since then we've launched seven products at the intersection of cosmetics and skin care so that you can instantly fix your appearance including our energizing eye tool and our beard and brow gel comb so sharks who's ready to join us and show the world there's nothing wrong with handsome so we don't have pens in front of you it's actually our concealer tool so if you take a look there so we have it designed as a pen so that it's sleek and discreet so this is just a concealer correct right so let me start at the beginning what does concealer do and what are you supposed to do with it so the formulation is made so if you want to cover up a pimple if you want to cover up dark under eye circles you just dab it on and you're done so you don't need a primer a foundation a sponge a brush a setting powder it's made to be as easy as possible for guys to cover up any problems and with the concealer tool we found out one of the best uses for it the guys were using it for is for dark under eye circles like under eye bags and so that's what led us to launch the energizing eye tool which is also in front of you it tightens the skin underneath the eye so it's meant to reduce Fine Lines wrinkles and it's it's really an anti-aging type but how are you supposed to even know how to do it like to me it's like war paint you know you just like see a streak I mean now what really so that's a huge that's a huge thing that we need to work on as part of this brand is education around these people I actually used a product like this all the time of course I do I don't sleep enough so I get really bad guys there's lots of products eye creams everything that are made for men correct you're saying you're a brand new category what's the brand new category nobody's approached the Cosmetic category from this angle like for me when I was younger I was bullied out of my middle school because I put gel in my hair and that hit my confidence for years people bullied you because you put gel in your hair yeah oh yeah this was also I mean seriously I would love to hear though why this I mean were you guys chemists were you guys in this industry at all so no so when we first started I partnered with two professional makeup artists they helped us really be able to formulate the first ever really cosmetic products for men's skin as opposed to women so what had happened was is I raised half a million dollars to start before I raised wow a million dollars to launch the company who did you raise it from friends family and then connections especially the company did you give away for the 500 000. so at the time we raised at about you know a 1. 5 million valuation how long ago was that that was back in 2018.
okay and now you're at a 12 million valuation because you have amazing sales what are they so this year we're at about 130 000 per month that's it per month per month per month I knew it what's lifetime sales about 2 million 2 million okay how are you selling 130 000 a month well a big one is is d2c Ecom retail our own site so we're about 95 d2c and then last year we launched in CVS Nationwide we're the first men's cosmetic brand I'm amazed you got to see it yeah it was good for you for us like retail is really a validation point in CVS we actually sit in the shave aisle we're not in a cosmetic aisle we're not in the women's aisle so we wanted to show these products yeah it can be normalized what you sell them for what's your average selling price it's around 30 85 gross margins so why though why the value I mean because you do understand that the is probably a family that risks it all and they just need a shot and you know you took that space from them that's not fair to do that right every entrepreneur wants a shot right so another million dollar evaluation that doesn't matter look if it's going to be worth 200 million dollars in three days then it's cheap right but let me ask the difference it may be worth crap in two days yeah well so is every company facing that so let me ask you a question what is that much money at and give away basically a 30-year company at that point sorry I didn't hear that Mark are you saying when you raised a half a million you gave up one-third it was a little bit less than that we have raised more since then actually oh yes that's what I was getting to right now so how much do you guys own right now we between the two of us we own a little bit more than a third of the company okay so that's why you need such a high valuation because if you're asking for that much money well that's the only way you're going to retain any accidents so the total raise from beginning was how much historical right around one and a half million total raised wow if you do this run rate right now at 130 a month that's about 1. 5 million in sales for this calendar a year how much you're going to make off we are not net profitable everything we're making is going right back into marketing are you losing money yeah how much uh depending on the month somewhere between 40 and 50K so let's find out why right because the margins are huge yes so if you're burning that much cash you are spending it somewhere yeah advertising or yep it's marketing primarily but we're expecting to see five to six x return on the acquisition cost now for sure why did you guys decide to go to retail because that takes a lot more capital in order to drive sell through whereas direct to Consumer you can get a return on ad spend and see it directly so why do you like the retail strategy mark because I wouldn't know about the product but if I go to a CVS in the Shaving aisle I'm going to see the product yeah but that's so extremely validating our number one competitor is the stigma here so for guys to see these products right next to other brands that they know and love interviews yeah but I'm not saying that's wrong right but one of the biggest things I try to teach my entrepreneurs is conserve your cash yeah because stuff happens and so you're gonna have to raise more than this six hundred thousand dollars too so now you guys are going to have to give away 10 15 20 of your 33 percent and then you guys are going to end up with nothing for me there's a huge elephant in the room and that is that this packaging tells me nothing about your product whatsoever and strix the name I have no idea it's makeup for men at all so you could probably be selling so much better if those things were clear on here and for those Reasons I'm out thank you the valuation is a little high I really rather work with people who needed a little bit more not second raisin and all that kind of money there's just not a business for me I'm out thank you thank you I love the category I mean I think it's been due for a long long time um but I don't like your approach you try to hide the fact that it's it's makeup a little bit I think you got to own it more because that's the only way you're going to change hearts and Minds if you can convince bro culture to do it you change everything I would take a completely different approach you know you guys have made your choices so for those Reasons I'm out thank you thanks I'm not going to tell you how to run your business I expect you to do that on your own I'm just an investor and I see a good idea I like it I don't like your valuation I don't think you're worth 12 million bucks okay sorry I just don't or I think there's a royalty coming yeah I think so it's because I understand your issue around your Capital needs if you're getting into retail with CVS and others you're going to get POS and it's tying up the capital the more you grow the more capital is tied up so the way I'm going to structure my offer is I'm going to give you 300 000 as a factoring loan 36 months 11.
