Electra Healthy Sports Drink
DEAL
EPISODE SUMMARY
🕓 Air Date: January 8, 2021
Asking For:
$350,000 for 20%
Investor:
Barbara Corcoran
Deal:
$350,000 for 30%
PRODUCT SUMMARY
Electra is a better-for-you functional beverage hydration company aiming to disrupt the sports drink market with healthier alternatives.
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Background Story
Fran Harris, a former Division I women’s basketball player and WNBA champion, founded Electra in Dallas, Texas. Her extensive background in athletics and her experience with various sports drinks led her to recognize the need for a healthier alternative in the sports drink market. She believed that many sports drinks over-promised and under-delivered, often containing excessive sugar, artificial ingredients, and salt.
Fran’s passion for creating a better sports drink drove her to develop Electra, a product designed to meet the needs of everyday athletes and active individuals. She leveraged her sales experience gained from working at Procter & Gamble to enter the consumer packaged goods (CPG) market and introduce Electra to consumers.
The Product
Electra offers a range of functional hydration beverages with flavors like Litty Lemonade, Passion Punch, and “Oh, Yeah!” Orange. What sets Electra apart is its use of monk fruit as a sweetener, avoiding excessive sugar content commonly found in other sports drinks.
The product is designed to provide a convenient and healthier alternative to traditional sports drinks. It is packed with essential electrolytes, including potassium, to help replenish vital nutrients lost during physical activity.
Electra’s formulation aims to keep individuals feeling energized and hydrated without the downsides of excessive sugar and artificial ingredients. Customers can purchase Electra online through the company’s website or in retail stores.
How It Went
The company’s position before Shark Tank
As of Fran Harris’s pitch, Electra had just launched its product line, with sales yet to be realized. Fran mentioned a plan to go direct to consumers online and eventually enter the retail market. She also highlighted interest from one of the largest distributors. However, the company was seeking $350,000 in funding to support production, R&D, logistics, sales, and marketing.
Fran stated that she had some initial capital for the first production run, but she aimed to secure additional funding from the Sharks. The company’s profitability and financial performance were not discussed during the pitch, as Electra had just launched its products and was in the early stages of its business development. Fran’s confidence and background in sales and athletics were key aspects of her pitch to the Sharks.
The Negotiations:
Fran Harris entered the Shark Tank seeking $350,000 in exchange for 20% equity in her company, Electra. After presenting her pitch and answering questions, Fran received offers from two Sharks: Barbara Corcoran and Kevin O’Leary. Barbara Corcoran made the first offer, proposing $100,000 in cash upfront and a $250,000 line of credit for 40% equity in the company. She emphasized the high-risk nature of the deal due to the competitive beverage market.
Kevin O’Leary, who initially expressed concerns about the beverage industry, ultimately made a counteroffer. He offered the same $100,000 in cash and $250,000 line of credit but for 30% equity, provided Fran could secure commitments from two high-profile individuals in the sports industry. Fran countered Barbara’s offer, suggesting a 25% equity stake for the same terms. However, Barbara insisted on her initial offer of 40% equity.
Fran then revealed that she had commitments from two Hall of Fame athletes willing to invest cash in the company. Barbara agreed to Fran’s 30% equity offer under the condition that both Hall of Fame athletes came on board as investors. Ultimately, Fran accepted Barbara Corcoran’s offer of $100,000 in cash upfront, a $250,000 line of credit, and 30% equity, provided she secured investments from the two high-profile athletes.
