Bravo – Tipping App
DEAL
EPISODE SUMMARY
🕓 Air Date: November 5, 2017
Asking For:
$150,000 for 5%
Investor:
Mark Cuban, Lori Greiner (50/50)
Deal:
$150,000 for 10% + 4% advisory shares
PRODUCT SUMMARY
Bravo is a seamless payment solution that enables users to easily find and pay service professionals, musicians, or others in need of tips, eliminating the reliance on cash transactions.
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Background Story
Hector and Maria, both born and raised in Puerto Rico and currently residing in Phoenix, Arizona, developed Bravo to address the challenges faced by service professionals who rely on cash tips. Inspired by Maria’s childhood, where her mother, despite financial hardships, refused government support, instilling the value of earning money, Maria and Hector aimed to empower those dependent on tips.
With Hector’s background as a medical doctor and gastroenterologist, and Maria’s experience in marketing and business development at Nabisco, they combined their skills to create Bravo. The idea emerged from their realization that the shift towards digital payments left many service workers without access to tips, impacting their livelihoods.
The Product
Bravo offers a mobile payment solution that allows users to find and pay service professionals, musicians, or other individuals requiring tips. Users can locate recipients through proximity or search by name on the app.
The process involves entering the tip amount, and at the end of the transaction, users can provide a rating or comment. The app aims to make tipping or paying convenient and secure, without exchanging personal information.
Notably, Bravo caters to individuals who may not have the app, as it’s free to download and takes seconds to set up. The company has penetrated 25% of the service industry in Arizona and processes almost $1 million in tips monthly.
Bravo charges a 2% convenience fee from the tipper, ensuring the recipient receives the full tip amount. The founders emphasize the uniqueness of Bravo compared to other payment solutions, citing security concerns in connecting strangers through platforms like Venmo.
How It Went
The company’s position before Shark Tank
Bravo’s success in Arizona is evident, with a monthly tip processing volume nearing $1 million. The founders claim to have dominated the Arizona market, penetrating 25% of the service industry. The business model relies on a 2% convenience fee from the tipper, generating revenue from each transaction. Additionally, Bravo explores monetization through data aggregation and machine learning, offering insights into user behavior and preferences.
The company tested a subscription model with restaurants, charging a $5 premium per month, resulting in $15,000 in income during the first quarter. While the revenue appears promising, some sharks express concerns about the scalability and the challenging landscape of payment processing. The founders, however, are confident in their strategic plan and emphasize the potential for growth through partnerships with service professionals.
The Negotiations:
The negotiations started with a $150,000 investment for 5% equity, seeking support to scale Bravo. Lori Greiner and Mark Cuban joined forces, offering $150,000 for 15%. The founders countered with $150,000 for 10%, sweetening the deal with 2% advisory shares each, totaling 12%. After a brief discussion and a minor adjustment to the advisory shares (2% each), a deal was struck.
Lori Greiner and Mark Cuban agreed to invest $150,000 for 10% equity and 2% advisory shares each. The founders expressed their joy, considering having two sharks on board as a dream come true, and appreciating the support and mentorship that come with the deal.
