STEM Center USA – STEM Education Programs
DEAL
EPISODE SUMMARY
🕓 Air Date: October 30, 2015
Asking For:
$150,000 for 15%
Investor:
Lori Greiner
Deal:
$200,000 for 20%
PRODUCT SUMMARY
STEM Center USA is a supplemental education program focused on Science, Technology, Engineering, and Math (STEM), providing a creativity center for students to learn how to design, build, and program.
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Background Story
Founded by sisters Melissa Jawaharlal and Lavanya, both with backgrounds in mechanical engineering, the business aims to address the lack of basic understanding of technology despite its increasing influence in daily life. Melissa, 21, is a senior in mechanical engineering at UC Berkeley, while Lavanya, 23, graduated with a full scholarship in mechanical engineering from USC, with experience working on orbiting satellites and at a major defense contractor.
The Product
STEM Center USA offers a creativity center for students aged 5 to college level. They also identified a market gap and created a robotic product for upper middle school and high school students, which successfully raised $170,000 through Kickstarter.
The annual memberships for the Creativity Center range from $1,400 to $1,800, with additional after-school programs for local schools. The sisters envision expanding their STEM Centers to multiple locations.
How It Went
The company’s position before Shark Tank
In the previous year, STEM Center USA generated $300,000 in revenue, with $130,000 coming from the creativity center and $170,000 from the sale of the robotic product. They have 85 students, with 75 being yearly members, paying an average of $135 per month. The business aims to achieve $450,000 in revenue in the current year, projecting $3.2 million in sales for 2016. They have a vision of having a STEM Center in every city.
The Negotiations:
The negotiation saw Kevin O’Leary and Robert Herjavec bowing out early due to concerns about the company’s readiness for investment. Lori Greiner and Chris Sacca both made offers. Chris offered $150,000 for 25%. Lori offered $150,000 for 20%, emphasizing her belief in the mission and its impact on young women in the technology industry.
The sisters countered, proposing $200,000 for 20%, and Lori accepted the counteroffer. They chose to work with Lori Greiner, valuing her belief in their mission and her expertise in retail. In summary, STEM Center USA secured a deal with Lori Greiner, receiving $150,000 for 20% equity, as they aim to expand their educational program and product offerings.
