Revolights dives into the Shark Tank!

Watch the show and see how we fared with the sharks.

   Text transcript from Shark Tank Season 5: Episode 19

Shark Tank Season 5 Episode 19 Transcript
7 speakers: Narrator, Kent Frankovich, Mark Cuban, Kevin O'Leary, Lori Greiner, Robert Herjavec, Daymond John

Narrator: In the tank, hopeful entrepreneurs get a once in a lifetime chance to pitch the sharks, in hopes of getting an investment to start, grow, or save their businesses. The entrepreneurs must convince a shark to invest the full amount they are asking for, or they will walk away with nothing. If a shark hears a great idea, they’re ready to invest using their own money, and they are willing to fight each other for a piece of the action.

Who are the sharks? They’re self-made millionaire and billionaire investors, who are entrepreneurs themselves. Kevin O'Leary is a venture capitalist, who turned a 10,000 loan into a software business worth 4.2 billion. Daymond John is a fashion and branding expert, who grew his home made clothing line into the globally recognized fashion brand Fubu with over 6 billion in retail sales to date. Robert Herjavec, the son of an immigrant factory worker is now a technology mogul, who sold his first internet companies for over 350 million. Lori Greiner , the queen of QBC, holds over 100 patents and has launched over 300 products grossing over a half a billion dollars in retail sales. And Mark Cuban—the notorious billionaire entrepreneur, tech guru, and the outspoken owner of the NBA Dallas mavericks.

First into the tank is an entrepreneur with a revolutionary new bike accessory.

KF: “Hello Sharks, my name is Kent FranKOvich. I am a mechanical engineer from San Francisco, California, and Co-founder of revolights. I am seeking $150,000 in exchange for 10% of my company. So traditional bike lights generally consist of a small, forward facing white light that mounts to your handlebars, and a small rear facing red light that mounts to the back of your bike. Well we think this approach is incorrect, considering an estimated 70% of nighttime car on bike collisions can be attributed to inadequate side visibility. We want to eliminate that statistic and let me show you how. Revolights consist of intelligent rings of LED that mounts to your wheels and synchronized to speed to create a forward projecting headlight that stays in the right position at any speed. A rear facing functioning brake light and a dramatic increase in your side visibility.”

RH: “That is so cool.”
DJ: “Very cool.”
LG: “Really Smart”
KF: “Demand has been overwhelming for our product, but in order to make this thing really take off, we need to get to a more mainstream price, lower our cost of goods, and for that, I need your help. Who wants to come and check out the lights?”
DJ: “Ooh!” (Raises hand)
KF: “Alright, you gotta really start going.”
LG: “Kent, how did you come up with this idea?”
KF: “I originally had the idea riding home from my lab at Stanford in grad school. I finished up and I was going through a lot of dark patches. I was hitting bumps and potholes at the last minute and I finally said to myself: ‘man, I need a better headlight.’ But I started thinking, I didn’t want to just go and buy a more bright headlight, I wanted to make a more efficient headlight by putting the light where it’s needed, as far forward and close to the ground as possible.”
KO: “Before you finish, I want to look at it. I want to see how this is facing forward.”
KF: “Yeah come on, check it out. So the way it works, there’s rings of LEDs that attach to your wheel so as they go at low speeds, there’s an accelerometer that’s figuring out forward at all times.”
KO: “One size fits all?”
KF: “Right now just road bikes and hybrid bikes.”
KO: “Can I retrofit it to an existing bike and existing wheel?”
LG: “Can you pass that out around to us? Is it something that you clip onto the wheel? Any wheel?”
KF: “Right now we sell a kit that allows you to install hardware onto your spokes but we also have now a wheel, with the lights permanently riveted in.”
KO: “It also looks like it could be stolen.”
KF: “So stolen is actually a big point because that is one of people’s main concern with bike lights currently. We manufacture them to be solid rings, so when you lock up your wheels, you’re actually locking up your lights.”
KO: “I’m assuming you have a patent for it?”
KF: “I have two granted utility patents.”
KO: “Have you considered licensing to one of the two giant bike manufacturers?”
KF: “Absolutely. We wanted to get to the point where we are proven in the market, and we started building them into wheels and we’re using that as an example to land those.”
RH: “Great strategy.”
LG:” What are your sales so far?”
KF: “So we haven’t been selling for more than 12 months, and in those 12 months, we have sold over $600,000 worth of our products—online, almost exclusively.”
DJ: “Woah!”
KO: “How much does it cost to make, how much do you sell it for?”
KF: “Currently, we are selling each individual set front or back for $139. The full set you can buy for $229.”
DJ: “you made $600,000 in what period of time?”
KF: “So that’s in about 10 months of sales.”
DJ: “How much of that is profit?”
KF: “So we have not become profitable yet.”
LG: “So it costs you $100, and you sell it for $229.”
DJ: “And why don’t you make profit is it because of the margin or is it because you are putting money back in?”
KF: “Money back in.”
LG: “I’ve seen strips that you can put around that are just for color and for fun, but this is much stronger.”
KO: “It costs 10 times more though.”
LG: “Well yeah, I mean those cost like 20 bucks, but do you have any competition in this space for doing something that’s very bright light that’s screaming, a bike is right here—watch out. “
KF: “So there is nothing that provides the visibility patch that we do. My background is mechanical engineering. I was actually at the lab which is NASA’s unmanned space flight wing, I was on the Mars science lab mission.”
RH: “Wow we’ve never had someone come in here and pitch they’ve worked for NASA. You’re a real rocket scientist!”
KF: “Rocket engineer! There’s a big difference.”
DJ: “So, I’m gonna get the party started here. $300,000 for 30%. Just think about it for a second.”
KO: “I’ll make you an offer that’s probably more attractive…I don’t want any of your equity…”
DJ: “I know where this is going and perpetuity is the new broke!”
KO: “I may craft it in a different way. I would give you the $150,000—exactly what you asked for, and I’d take a 7% royalty until I get my $150,000 back, and then I’d drop it down to 1% perpetuity.”
RH: “It’s like the wheel; it always spins exactly in the same spot.”
KO: “you keep your equity because the truth is, the equity in this company could be very, very valuable one day.”
KF: “Well first off, thank you very much both of you for making an offer. Kevin to speak to your point real quick on the royalty, we’re at an early stage in our company and that cash flow out can stifle our growth.”
KO: “Would you rather I lend you the money, if I were a lender?”
KF: “Right now what we want is an equity investment.”
RH: “Kent, I’ll make you an offer. Incredibly clever and smart idea, and you must be Croatian with a name like FranKOvich.”
KF: “Yup, I am.”
KO: “So you’re asking for $150,000 for 10%. I’ll give you $300,000 for 10%.”
DJ: “Woah! Wait a minute!”
RH: “I think your value is too low. I do think you undervalue that.”
DJ: “Robert you’re trying to undercut me.”
KO: “No kidding Bozo!”
DJ: “You better put in your mouthpiece because this is about to get ugly.”

Narrator: Kent has 3 offers on the table, but Robert has generously offered double the money that Kent was seeking.

KF: “That is an incredibly generous offer Robert.”
DJ: “I have to put the ego aside and I don’t want to get into a bidding war, I’m going to have to say that Robert did give you a very generous offer—I’ll step out.”
KF: “Thank you again for the offer Daymond.”
KO: “I’m still here!”
KF: “Robert you have an incredible offer, I’d like to see if any of the Sharks are still in to make an offer as well, before I decide.”
RH: “Such a nice way to say no…”
MC: “Robert’s right, it’s worth a lot more and you know that. You have your background and your experience, and 600,000 in sales—people are probably throwing money at you, and you don’t come in and ask for a $1.5 million valuation. Unless you’re screwing with us, it makes no sense whatsoever. I think there’s no chance on God’s green earth that this deal could ever possibly close because you’d be an idiot among your friends to value this company at $1.5 million or even $3 million. It doesn’t add up.”
KO: “Did you just insult him?”
MC: “Yes because he’s insulting us!”
KO: “Mark Cuban just crapped on you, what do you say?”
KF: “So here’s the response, I think that we have absolutely been looking to find investment. The fact is, coming and talking to you guys, and the connections that you have, and the networks that you have, and the experience that you have…”
MC: “You are so full of shit! Excuse my French. Connections is the least of your worries—I’m being brutally honest. Robert offered you twice of what you were asking for at the same valuation. You didn’t even put up a little bit of a smile.”
KO: “So what are you doing Mark?”
MC: “I’m out.”
KO: “Wow.”
KF: “I feel like Mark has brought up something that I really need to defend.”
RH: “You have the guts, don’t let people talk down to you like that.”
MC: “You are so smart, capital is not a problem, you were smart even to come on here, push down the valuation…”
KF: “The first thing that you’re bringing up is that capital is not a problem, which is not accurate. I’ve been working for a year and a half and so has all the other people in our office without being paid. So no, capital is actually an issue, and frankly, the way I see this show is that we are able to partner with somebody who has amazing connections, who has the ability to get us to the point where we need to be to start really moving product.”
MC: “So why wouldn’t you just say yes to Robert?! $300,000 for 10%, bam you got the capital, you got connections. Say yes.”
RH: “Because he’s a nice guy, you know not everybody is super aggressive, full of themselves, like you.”
DJ: “How do you feel making a great offer and he’s not answering you right now?”
RH: “You know what, you might be right. Kent might never close with me, but I’m not getting that vibe from the guy.”
DJ: “You’re also not getting an answer from him, he knows that we’re out over here.”
MC: “Do your own deal Robert.”
KF: “Kevin, I greatly appreciate your offer, but I’m going to have to say I need to go with Robert.
RH: “You better not be wasting my time man.”
KF: “I am absolutely not wasting your time. Thank you very much.”
KO: “So basically what Mr. Cuban accused him of was being here only for exposure.”
RH: “I offered the guy and offer, he didn’t say no to me. What he said was, in a nice way, I’d like to hear what other people say.”
MC: “If I’m standing right there, and I say I want $150,000 for 10% and then somebody while I’m standing there says I’ll give you $300,000 for 10%, the normal response is wow(gasps and smiles)! He didn’t flinch!”
RH: “You’re a pushy guy and you pushed the guy and you rattled.”
MC: “I just sat back and listened.”
RH: “You know what Mark, I only have the faith in the people that come in here…”
MC: “No look, we’ll find out.”
FH: ” …But I’m not going to be rude to people when they come out here.”
MC: “That’s why they play the games.”
RH: “We’ll see.”



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