next into the tank are entrepreneurs with a business profiting from competitive Thrill [Music] Seekers greetings sharks my name is Brad Scutter and I'm Rob Dickens we're from Boston Massachusetts our company is rugged races and we're seeking 1 million for 10% of our company so what is rugged racis we operate a popular 5K obstacle course race series in 20 cities across the country called Rugged Maniac at our events participants of all ages all genders all shapes and sizes will complete a challenging running course featuring 25 epic obstacles but these aren't the popup Kitty obstacles you'll see at our competitor's events at rugg and Maniac participants will climb over towers of shipping containers rock it down 100ft water slides crawl through tunnels of mud and even jump over fire all while running through a combination of forest Fields ski slopes and even Motocross tracks in short Rugged Maniac strikes the perfect balance between fun and physicality with our award-winning courses and our dayong Festival so which one of you sharks is ready to get rugged with us and just to show you what we're all about we've got this video clip right here wow I didn't even know you existed but I know about your competitor mean like tough mutter how are you different than that we're we're different in this sense basically tough mutter is a 12m course right with about 20 obstacles we have 25 obstacles over 3 miles so it's more about the obstacles and less about the running and being a 3M course it's much more accessible to the general public than something like a 12m are you saying this is a Tamer version of that something that Barbara would do oh I could handle the 12 miles it's this little short guy over here that wouldn't have a shot at we get people of all shapes and sizes at our events truly from 77y old guys to uh you know mother daughter teams 14y old and up is it more workout or more party we think we strike an excellent balance between the workout and the party because it's a shorter race it takes you know an average an hour a little bit more to finish people are are exhausted but they're still exhilarated do people bring alcohol would you sell yes we sell alcohol it's a bigo alol big outdoor Festival pump pound puke right exactly it's I mean it's fun it's a fun event so what are sales going to be this year this year 4. 2 million wow how many 20 cities Nationwide how much out of the 4. 2 did you profit a million dollar but next year without investment we're projecting 6.
5 million in Revenue 2. 2 million in profits talk about the industry there's some monsters out there you know what's the difference so basically you've got you got two kind of at the top the war- 5K tough motor 12 M and why have they gotten so much bigger than you guys first movers in the market and how big are they rob how big are they they have like 40 events events are Revenue take a guess how big would they be I think they're about 30 million so would you guys say this industry is about 100 million a year much larger more than that Rob what what are you going to do with the 1 million we've uh We've we've taken that money and invested it in other brands that we own um what so wait wait wait wa no no what are we going to do with a $1 million that we would get from you what million were you talking about BR I thought you want to know what we did with our profits yeah well we want know right great what did you do with the one million in profit let me show you exactly what we've done with that other money okay let's see let's see here it [Music] is oh you guys are doing these things it's so stupid that's a great idea Rob explain to me what I saw you saw running with the bulls okay here in the US anybody get hurt we had some minor injuries couple concussions of broken arm the injury rate people paid for this oh yeah about the same prices as Rugged Maniac about $50 but is that part of this deal a separate company have you never seen the show grey greedy pigs I give you a million dollars I don't I don't get to wet my beak on the bull deal no of course we get the B you guys kidding not going to work you can't be serious full of B I give you a chance to change your mind okay well we would want more money if you get involved in the so the Bull Run is is a separate entity all right why don't we entertain it how much more would it be to be $2 million for 10% of the Bull Run 2 million for the bull and 1 million for the rugg yeah so 3 million bucks gets 10% of both Brad what are the sales in the second company 280,000 at the first event but do you realize that your expertise is not Rugged Maniac your expertise is in putting on Advent events the bull run is just another variant of this same thing that's exactly right and so the growth potential with this company is not just within Rugged Maniac guys what's the cash flow going to be next year under your optimistic scenario for both companies we think there could be a $20 million event this year guys I like the business but if I come in and give you money and all of a sudden it's like where's Brian and Rob oh they're chasing the Bulls right what am I going to say to you as an investor when I'm not getting your full attention I want a piece of the Bulls no kidding no that's not what I'm going to say I'm going to say they can die right I want a return on my investments or I'm suing your ass because you have a conflict of interest no investor says oh the existing business is dying sell me a piece of the new one well you don't do that to investors you align your interests with them 100% when you start talking about a million dollars you don't screw around right that's a real investment the other the element for me I love the idea I also really love the fact that you're building a customer base for the other events that you can hold later on for me they're together here's an offer for you sure both businesses combined I'll give you 1. 5 million for 25% of the entire thing okay is that the only offer that we have Mark you said you were interested no I'm very I I love the one bu business if if I didn't know about this other business I'd probably make an offer right now sure right but I want to hear what you say to Rob I think I'm giving you a fair offer I think the business is worth what six times eida 1.
5 times Revenue roughly and I'm pricing in I think that's generous I'm pricing it in because I see the upside in the other business okay asking for $1 million for this business was already challenging having another agenda and another business on the other side my gut feeling is my instinct is that no matter what I would be screwed working with you I wouldn't trust you I'm out okay thank you for your consideration you know a funny thing happened to me watching here today uh you came out here I thought what goodlooking guys man they looked apart what a great video but then somewhere along the way this Sur prise of the bulls and oh yeah we'll wrap that into the deal and I don't think maybe you intended it that way but for some reason you lost my trust but either way I'm not sorry to hear that but we thank you for your consideration well guys you have you have uh you have an offer on the table yes we do uh what are you going to do an offer that's lower than what we had wanted but no let me make you an offer higher than what you want oh no of course I anyone else want to throw an offer in the ring I'm still listening well Mark your concern is that you you want us to focus all our energies on no no no it's not that you came in and you tried to sell us one business and you separated the two you're overvaluing the other business in my opinion and if you have such an a high opinion of that business that's probably where a lot of your attention is going to be and as an investor I don't think it's worth the the value that you're signed into it because you've had one event for $200,000 Mark are you saying my value is too high yes wow now Mark's making me nervous about am I overpaying 1. 5 million 25% that gives you about a $6 million value for the combined businesses the longer we wait the the less comfortable I'm starting to feel let me cloudy the waters a a bit here and maybe give you a hang on Robert you may want to hear this I think your offer should be for 33 a third you become third partner with these guys and then I'd go in 50/50 with you H I'm good with that I like going up to one3 1. 5 million for 1/3 of the combined businesses I'm with you Uncle Kevin yeah I thought you might be because I think you did overpay Rob isn't that interesting what's happened you had an offer at here now we're here sure the longer we stay [Music] here so what I would be willing to do is 1.
5 million but it's for 25% of the two companies combined okay we're going to go discuss this consider both offers and come [Music] back I think there's a lot of benefit here to partner with these guys I'm not sure what there is to discuss Mark you made a better offer than we did yeah Mark made the same as your initial the challenge is when they come back do you drop this dead weight right here and go back to your initial offer then you're overpaying I don't think they're going to take either offer oh I think they [Music] will okay Gentlemen let's summarize what's happened here you have two distinct offers the first for Mrcubin is for 1. 5 million for 25% of your company which by the way was the exact same offer I made and then he spent half an hour telling you how bad your business is I know I know the other offer is for the same amount of money the 33 and a third of your business what are you going to do we went out there and discussed it we we'd like to eventually strike a deal with you we wanted to come back in and say listen we do 2 million for for the 25% instead of doing that we'd like to split it in the middle and go 1. 75 deal deal all right going to work baby looking forward to it for looking forward to it absolutely we'll make some money you lose out but Robert why do you do that thank you for your consideration thanks guys thank you all right we are very excited we took that offer from Mark because we realized that Mark offers more than just money Mark offers his experience he offers his connection you know only great things can come from well done 1.
75 for 25% I'm actually surprised that they came down in the [Music] valuation next up is a stylish way to [Music] relax hi I'm Rachel and I'm the chief enthusiasm officer and I'm Joe and I'm the chief relaxation officer we're seeking $400,000 in exchange for 7% of our company wow between the emails popping up in your inbox 24-hour news blaring from every screen and constant pinging interruptions from your smartphone we're all feeling more overwhelmed and stressed out than ever we're all sick of feeling busy hectic and rushed and our solution to this frustration is not another app or Gadget our solution is the world's most ridiculously comfy hammock introducing Yellow Leaf hammocks at Yellow Leaf hammocks we've perfected the hammock for the modern consumer we've conquered every obstacle from creating a cocoon-like no wobble design to a shocking soft yard so you won't get a rope earn when you're trying to relax and they're completely weather safe now we're breaking the boundaries of relaxation with our new invention the hammock Throne the hammock Throne is an indooroutdoor hammock chair that makes it possible to relax absolutely anywhere with the hammock Throne you have a gorgeous piece of furniture that you can put out in your living room on your tiny balcony or even in your office it extends back to create a ful length hammock large enough for a 7t person all with in a diameter of just 3 and 1/2 ft wow and it swivels 360° so you can angle it to gaze out the window or relax while you watch Shark Tank first we perfected the hammock now we brought it into your living room so sharks who wants to make the world a better place and join us in our quest to build a relaxation Empire so on the tables in front of you are specially selected hammocks uh if you open these up and first thing you want to look at the label they're all signed by the woman who made it um we're social Enterprise I like that yeah they're all where do you make them we work with moms in rural Thailand to create high wage jobs what do they cost what do you sell them for the ones that we just gave you guys are a classic double it's our top selling size they retail for $1. 99 ooh that's not bad our current line ranges between $149 and $299 the 1999 hammock how much do you pay for it $44 is our landed cost so what is an average hammock made out of something like this what does that cost you can find a hammock for $30 on Amazon to be perfectly honest it's not going to feel like this it's not going to look like this Rachel how much is the contraption so this is the brand new hammock Throne this is our high-end hanging solution that we've just introduced it's the first your product you made this yeah we did um so this one is somewhere in the neighborhood of 2200 yeah w wow but it's an indoor piece of furniture see that seems like a lot that the story of how you get style here our inspiration to start this was to literally end poverty in really vulnerable communities in the developing world the idea for the company started when I initially went on a backpacking trip across southeast Asia without me a I know we were living together in Boston at the time and I stumbled across a hammock on a remote island and I was immediately struck by how soft it was I was really impressed with the quality and I started asking some questions and learned that it was woven by this hill tribe Community it was part of an economic development program to help this hill tribe group out of poverty and I was really struck by that in Thailand so I went to this community and I got to meet the actual Weavers and hear their stories and I learned that this community that started making the hammocks with the help of an aid worker had been previously in debt slavery and the thing that really struck me was a lot of people kept coming to this community asking to join the program but they were being turned away because there weren't enough sales and I thought well we can start a little hammock company and you know provide enough jobs in this region so it came home with a backpack full of hammocks and I came home to Rachel I was thrilled that my boyfriend wanted to put his Finance job and start a hammock company as you can imagine yeah I was literally a great idea what are your sales this year we're going to hit 1. 3 million wow last year we did 860,000 your sales are primarily online it's about 50/50 between a combination of director consumer sales through our website as well as strategic Partnerships a big part of our early wholesale was kind of scattershot patio store we took a step back from that to focus on strategic Partnerships who uh it's Virgin uh voyages which is virgin's new Cruise Line business so virgin voyages will be putting Yellow Leaf hammocks in every single balcony of every single cabin what price do you get from them for these they they pay our wholesale price but they'll also be um retailing them so they we'll be on the room service menus in the on in the cabin and on the stores the retail store is projected to more than double our current business so you've got to be profitable then right last last year on uh 860,000 in Revenue our uh net income was 110,000 that's great after paying yourself after paying ourselves yeah Joan Rachel yes here's my offer bam L of the five sharks here I probably have the most credentials about building social impactful businesses so I understand the challenges you're facing I really love a lot of what you stand for but you have $100,000 profit with a crazy $5.
7 million valuation so my offer is as follows and it's an explosive offer I want 33% of the company I'll give you $1 million say yes or no and then it's done W1 million 3% you you mentioned our profitability on last year I want to mention our profitability on this year and what we're do and I think you the order so on the 1. 3 million that we're doing uh this year we're doing 360,000 in profit one of the biggest things that we're looking to do with this money is we have a huge product road map of solutions talking and take the deal he's paying you over eight times there might be another deal that's an amazing offer we also recognize that we might not need all of that money right now we also might not what are you doing we might all right well hey if you don't need all the money right now I'm going to make you an off we don't we're not prepared to give away that much [Applause] that I mean I sit here I listen I it's a hammock company not well listen he just said maybe he doesn't need all that much money so I will give you an offer I'll go 400,000 for 20% now granted his might be better offer for you a million doll for the 25% and both of you I don't want to go to the million how about 500,000 for 25% no that that what's your counter for 25% 600,000 for 14% oh wow wow I love the idea and I think you guys are the real deal I will give you the 400,000 for 15% if you take the million dollars from me you won't need to dilute yourselves again you know how much money K has raised in its entire lifetime for the business the total we ever raised in our entire history was $5. 2 million and we we sell over a billion dollar in sales I'll teach you and I'll help you run the business in an efficient way are you okay with 33% or is that too much for you I think it's too much because what's the maximum that you're willing to do for someone that's going to really roll their sleeves and help you we're looking at the future if you took 33% now I worry that we would it would hurt us at a subsequent round when we grow what subsequent round when I started my business started with one product I took out a bank loan was about $325,000 I paid it back within a year and I never had to take a loan or bring in an investor again so listen I don't think you need to just sit there and take on all the investors and taking a whole ton of money you just need to be strategically smart and taking the right investor but you need some Mone that's the bottom line so I'm going to change my offer my offer is this I'm going to go $200,000 flat then I'm going to give you a loan of $200,000 at 7% I'm going to fund purchase orders if you need them and I'm going to ask for 177% you may like the one thing that I can offer is is I can offer somebody who will hold your hand take you down the road do everything that you need I care about helping women I care about helping environment I care about helping the world and I really like the two of you so I care about helping I love the two of you thank you so much we love you guys we're making it hard on them what's the minimum percentage and what dollar do you want Focus Joe what you do okay what do you do $1 million for [Music] 25% just because I love you yeah not make we're going to change some life I never thought he'd go down it's never happened before in Shark Tank history when someone came in here for 400,000 and walked out with a million I'm really excited to work with you we make a huge difference I'm so thrilled thank you congrats next into the tank is an entrepreneur who believes there's big money to be made from Big [Music] scares every where I go there's zombies hi sharks I'm Melissa Carbone from Los Angeles my company is 10 31 Productions and I'm seeking $2 million in exchange for 10% of my [Music] company wow 1031 Productions is an entertainment company that creates owns and produces live attractions in the horror space our most popular attraction is the Los Angeles haunted hay ride and it is not for the faint of heart sharks when you take our hay ride you are entering the pitch black woods demonic forces lost souls Psychopathic fun are waiting around every [Music] turn bites and just when you think terror is over think again oh god oh oh my God he likes you don't eyeball me I will kick your tush back to Texas Mark get him okay Melissa you know what's really scaring the crap out of me is your valuation so$ million for 10% imputes a $20 million value on this scary hair ride business tell us why you're worth $20 million we do attractions all year long we have the Los Angeles haunted hay ride which is our seasonal attraction here in La 17 nights we sell out every single night we do about $1.
8 million right now per October 1. 8 was really good in 17 days 1 days we have another attraction called the Great Horror camp out that we just launched which is a summer attraction the Great Horror camp out is our way of not being a seasonal company that is an overnight completely immersive camping experience horror theme oh no so it's 12 hours we B we we take 2,000 campers we put them in tents and we have an incredibly interactive experience that includes everything from a hell it's basically summer camp from hell yeah 1. 8 million in at the end of the 17 days what's left it cost us .
2 million to produce the Los Angeles haunted hay ride so so I'm left with 600,000 free cash afterwards yeah I mean it varies year to year because right now we're in a launching new attractions mode we're launching a New York haunted hay ride which is what we're seeking some of this money for the Great Horror camp out we're launching it next year in 10 cities up the west coast and there in lies the rub right because they're very very very expensive to to produce and create right well C the campouts are cheap to produce how much advertising or promotion do you do we spent about $300,000 we do a ton of radio my background is I I ran Clear Channel Los Angeles for 10 years so my um advertising marketing and one of and my other business partner is actually still with Clear Channel so we know how to make a dollar go really far from a market how many Unique Individuals come through the hay ride we have we have 50,000 people we sell out every single night so this year's our first year we increase our Max Capacity to 1,800 we actually are doubling our Max Capacity this year you sell out every night for 17 days every night that's amazing so can I extrapolate and say that the it's going to be 3.
