Brush Hero – Water-Powered Brush
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 21, 2018
Asking For:
$500,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Brush Hero is a water-powered brush designed for cleaning vehicles and various surfaces with high torque, eliminating the need for batteries and providing an innovative cleaning solution.
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Background Story
Kevin Williams and Glenn Archer, hailing from Alexandria, Virginia, introduced Brush Hero on Shark Tank. As avid mountain bikers, adventurers, and an F-16 pilot (Kevin), they faced the challenge of keeping their vehicles clean without the hassle of traditional methods.
Frustrated with the inefficiency of brushes, sponges, and chemicals, they developed Brush Hero, a water-powered brush that utilizes water pressure alone for effective cleaning. The idea originated from their personal need for a solution to clean their bikes and vehicles easily, leading to the creation of a versatile cleaning tool.
The Product
Brush Hero is an innovative water-powered brush that harnesses the force of water pressure, eliminating the need for batteries. The founders demonstrated its effectiveness in cleaning various surfaces, from vehicles to rain gutters and patio furniture.
To use Brush Hero, one simply connects it to a low-pressure water source, like a garden hose, and it generates impressive torque for thorough scrubbing. The brush is designed for car, motorcycle, and bike detailing but can be applied to a wide range of cleaning tasks.
The basic configuration of Brush Hero is priced at $34.99, offering a competitive margin. The packaging cost is currently $6.50, with plans to reduce it further. The founders projected sales of about $3 million for the year, with a profit margin of $300,000 to $400,000.
They primarily advertised through direct-response campaigns on Facebook, investing $460,000 in advertising, resulting in $1.5 million in digital sales. Despite concerns from the Sharks about the high valuation, Kevin and Glenn remained optimistic, predicting $10 million in sales for the following year.
How It Went
The company’s position before Shark Tank
Brush Hero has shown promising performance with a strong emphasis on direct-response advertising through Facebook. With a significant investment of $460,000 in advertising, they managed to generate $1.5 million in digital sales. The founders aimed for $3 million in total sales for the year, with expected profits ranging from $300,000 to $400,000. The product was priced at $34.99 for the basic configuration, allowing for a healthy margin.
While the packaging cost was $6.50, Kevin and Glenn expressed confidence in reducing it further with additional support. They highlighted their current focus on direct-response advertising, indicating a successful strategy for driving sales. However, the Sharks raised concerns about the company’s valuation, questioning the feasibility of a 20x multiple for a cleaning brush. Despite the founders projecting $10 million in sales for the following year, the Sharks were skeptical, suggesting a lower valuation based on industry standards.
The Negotiations:
The negotiation process faced challenges as the Sharks expressed reservations about the company’s valuation. While Kevin and Glenn sought $500,000 for 10%, the Sharks, particularly Kevin O’Leary, questioned the high multiple and suggested a lower valuation. All Sharks remained interested in the product, but they challenged the founders on their valuation. Kevin O’Leary proposed a valuation of around $1.7 million, requiring a 33% equity stake for the desired $500,000 investment.
Despite the offer, Kevin and Glenn refused to concede to the 33% equity stake, leading to O’Leary’s exit. Despite objections from some Sharks, Lori Greiner, Daymond John, and Robert Herjavec continued to express interest. Lori and Daymond offered $500,000 for 25% equity, emphasizing their expertise in retail and marketing. However, the founders hesitated and requested a moment to discuss. During the deliberation, the Sharks continued to emphasize their value and expertise.
Ultimately, Brush Hero decided to decline the offers, expressing gratitude for the opportunity but opting to pursue their business independently. The decision surprised the Sharks, and Lori, in particular, expressed disappointment, stating that she wanted a Brush Hero on every hose in America. The negotiation showcased the challenges of valuation and the founders’ determination to retain a lower equity stake. Despite the Sharks’ interest and offers, Brush Hero decided to pass on the deals and continue their entrepreneurial journey without a Shark investor.
