Haven Door Lock
NO DEAL
EPISODE SUMMARY
🕓 Air Date: April 7, 2019
Asking For:
$500,000 for 6%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
HAVEN is the world's strongest smart lock, providing enhanced security by reinforcing doors with a wedge-based barrier.
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Background Story
HAVEN, the brainchild of CEO Alex Bertelli and COO Clay Banks, originated from a shared concern for home security following a series of break-ins in their Nashville, Tennessee neighborhoods. The founders, both with distinctive backgrounds, brought a unique blend of skills to the table. Alex Bertelli, a former Army special operations helicopter pilot, demonstrated strategic thinking and discipline honed during his military service. This background instilled in him a keen understanding of security needs, prompting him to address the shortcomings of traditional deadbolts.
Clay Banks, as the Chief Operating Officer, complemented Bertelli’s military background with a hands-on approach to problem-solving. Their collaboration began when they realized that, despite efforts to secure their homes, the prevalent break-in statistics in the United States indicated a fundamental flaw in existing security measures. Motivated by a shared vision, Bertelli and Banks conceptualized HAVEN, aiming to revolutionize home security with a focus on strength and innovation. The product’s inception arose from a deep-seated desire to create a solution that went beyond the limitations of conventional deadbolts.
This drive led to the development of a smart lock that not only strengthened doors but also incorporated technology for enhanced control and security. Located in Nashville, the founders leveraged their unique skill sets and experiences to bring HAVEN to fruition. The pitch on “Shark Tank” showcased not just a product but a mission inspired by personal experiences and a commitment to safeguarding homes through cutting-edge security solutions.
The Product
HAVEN, the world’s strongest smart lock, is designed to fortify doors and provide advanced security measures against break-ins. The product boasts a wedge-based barrier that, when activated, makes the entire door 10 times stronger. The key operational feature involves situating HAVEN at the bottom of the door, right next to the existing threshold. When the smart lock is activated, the wedge-based barrier lifts, offering a formidable defense mechanism against intrusion attempts.
Users can effortlessly open the door by stepping on the gate, and to close it, they simply lock it with the foot pedal. This straightforward yet effective design leverages simple physics to enhance home security significantly. HAVEN is available in two versions: a mechanical one and an electronic-controlled version. The latter includes a key fob, similar to those used in cars, and a smartphone app for convenient access control.
Pricing for HAVEN starts at $182 for the mechanical version and $349 for the Bluetooth-enabled model. The mechanical version provides a cost-effective solution with a 55% profit margin. The electronic version offers additional features such as smartphone connectivity, access sharing, and notifications. HAVEN can be purchased online through the company’s website, allowing customers to access this innovative security solution with ease.
How It Went
The company’s position before Shark Tank
HAVEN has shown promising performance with total sales exceeding $250,000. The company’s focus on online sales through its website has allowed it to reach a wide audience, addressing residential security concerns. The mechanical version, priced at $182, yields a 55% profit margin, showcasing the company’s ability to provide a cost-effective solution. The higher-end Bluetooth-enabled version, retailing at $349, offers advanced features, though the cost of goods sold stands at $175, prompting consideration for cost optimization.
The founders revealed that HAVEN has raised $1.5 million in funding, with $500,000 in convertible note debt from two investors. This funding has contributed to the development and initial production of 2,000 locks. Despite this progress, concerns were raised during the “Shark Tank” pitch regarding the company’s economic viability and scalability challenges. HAVEN’s notable achievement is securing a significant purchase order from a school in Arkansas, indicating potential expansion into the education sector. This move aligns with recent events, as schools have approached the company to enhance security in individual classrooms.
The founders emphasized that their patented solution is not limited to residential use but can also safeguard educational institutions. While HAVEN has demonstrated innovation in product design and functionality, the Sharks expressed reservations about the company’s ability to navigate economic challenges, particularly the need for increased pricing to support scalability. The founders cited inventory issues as a primary concern and proposed using investments to scale inventory with their suppliers. The company’s structure involves Bertelli and Banks as the primary owners, each holding a 25% stake. Additional equity has been allocated to investors, contributing to the $1.5 million funding.
The Negotiations:
The negotiations for HAVEN in the “Shark Tank” were marked by a mix of interest, skepticism, and ultimately, a lack of agreement. The pitch began with the founders, Alex Bertelli and Clay Banks, seeking a $500,000 investment in exchange for a 6% equity stake in their innovative smart lock company based in Nashville, Tennessee. While the Sharks, especially Mark Cuban, expressed interest in the product’s potential, concerns were raised about the company’s economic feasibility and scalability. Mark Cuban acknowledged the brilliance of HAVEN but pointed out the challenging economics, particularly in terms of profit margins to support the company’s growth.
Other Sharks, including Barbara Corcoran and Lori Greiner, shared similar concerns about the steep climb ahead for the company and opted not to invest. Daymond John, despite expressing interest, raised the issue of potential dilution for the founders due to the need for additional capital. In the end, he decided not to make an offer. The negotiation reached a pivotal moment when Mark Cuban made an offer but highlighted the economic challenges, and HAVEN declined, expressing a desire for a mentor to guide them rather than compromising on ownership.
The negotiations concluded without a deal, leaving HAVEN without a Shark investor. While the founders left the tank without securing funding, they remained committed to addressing inventory issues and scaling their business to meet the demand for their innovative security solution. Despite the challenges faced in the negotiation room, HAVEN’s founders expressed gratitude for the opportunity and determination to continue pursuing their mission of enhancing home security.
