Coatchex Coat Checking Technology
NO DEAL
EPISODE SUMMARY
🕓 Air Date: September 14, 2012
Asking For:
$200,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
CoatChex offers a ticketless coat check system utilizing facial recognition technology to match patrons with their coats, providing convenience and security in venues.
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Background Story
Derek Pacque, a recent graduate from the Kelley School of Business at Indiana University, conceived the idea for CoatChex while attending university. Frustrated with the lack of coat check services at venues, Derek recognized an opportunity to innovate in this space. With the support of his college professor turned investor, Derek embarked on the journey to turn CoatChex into a viable business venture.
The Product
CoatChex presents a ticketless coat check system, eliminating the need for physical tickets by using facial recognition technology. Patrons simply hand over their coats, type their names into the system, and a picture is taken automatically, ensuring a secure match between patrons and their belongings.
The system is designed to be franchised, with agreements in place to deploy the technology in various venues, such as bars, restaurants, and event spaces. The cost for franchisees to acquire the equipment is $1,500, with revenue split arrangements in place.
How It Went
The company’s position before Shark Tank
At the time of the pitch, CoatChex was in the early stages of commercialization, with no sales yet made. The company’s business model focused on franchising the technology to venues, with agreements underway to deploy the system in various locations. CoatChex had a patent on its ticketless bailment system, providing a competitive advantage in the market. However, some sharks expressed concerns about the lack of sales and the seasonal nature of the business.
The Negotiations:
Derek initially sought $200,000 for a 10% equity stake but faced skepticism from the sharks due to the early stage of the business and the lack of sales. Despite offers from Mark Cuban and others, Derek ultimately turned down all offers, including a $200,000 offer for 33% equity from Mark Cuban, citing a desire to further develop the company and prove its value before seeking investment. This decision surprised and disappointed the Sharks, especially given the opportunity to work with Mark Cuban.
