A Shark Tank pitch by Patrick, founder of Vanta, presenting underwear featuring 'Kanga Pouch' technology that separates and supports male anatomy to reduce chafing and increase airflow. Patrick requests $500,000 for 5% equity (implying a $10M valuation) and reports $2.5M revenue last year, projected $8M this year, ~15% margins, and spending ~40% of revenue on advertising. Sharks question patent protection and market position; Jane Lu offers $500K for 20% (with terms to reduce to 10% after return of capital) and Robert Herjavec offers $500K for 15%; Patrick declines and exits without a deal.
Questions this video answers
$500,000 for 5% equity.
$10 million valuation.
$2.5 million.
$8 million (on track).
About 15% margins.
Chapters
$10 million valuation.
Yes. This year we're on track to do $8 million in turnover.
Wow.
Hello, Sharks. My name is Patrick and I'm the founder of Vanta. Now, what makes our underwear so unique and special is what we call Kanga Pouch technology. Kanga Pouch separates your nuts from your legs. This increases airflow, decreases temperature and eliminate chafing. And it keeps your joeys front and center. We have over 8,000 five star reviews. I'd like to bring out three models that I think you guys might recognize.
Here we are.
Here you are, Rob.
Oh, that is so inaccurate.
And look at this one. Yes. So I'm asking today for $500,000 for a 5% stake in the company.
Walk us through the previous years of revenue as well.
So last year we did 2.5 million. If we follow our current growth trajectory in the next four to six years, we could doing 80 million plus in revenue.
If we can go back for a sec. You did two and a half million last year?
Yes.
What was your profit if you had a profit on that?
So we're sitting at about 15% margins on that. That number could have been higher, but we are right now spending 40% of our revenue on advertising.
You spent 800,000 last year, roughly on advertising. You're projecting a massive increase to 8 million.
Yes.
Is the ad spend growing at the same linear rate?
Yes.
So you'll have to spend $3.5 million this year to generate 8, which is a lot.
Do you have a patent on the product?
We don't have a patent on the product, but what I would say is, did you have a patent on the oodi?
No, I don't think it's necessary, but trust me, it'll help. But Davey was also in quite a different position. You were first to market. First to market is important.
I'll be transparent. There have been companies that have tried to replicate the Kanga Pouch. I've had customers that have bought from this company and said, yeah, it's all right, but it's not what yours is.
You're not first to market. So for that reason, I'm out.
I think I will make you an offer. I'll give you the 500,000 you're asking for, but I want 20% equity. But when I get my investment back, I'll come down to 10%.
Patrick, I will give you the 500,000 for 15%. That's how I fix the valuation.
My question would be to Robert. What would you be able to bring to the business that would help me sort of continue my growth trajectory.
Hang on a sec. Patrick. If you're asking me to take a bet on you, you need to take a bet on me.
I'm not comfortable giving away 15% of my business, so I'm going to have to say no.
What are you going to say to Jane?
You got one more offer on the table?
Unfortunately, what I need to do moving forward in order to grow this business is to have someone. Come on. Who has done exactly what I want to do. Worked in E Commerce before.
