Calm Strips
DEAL
EPISODE SUMMARY
🕓 Air Date: January 28, 2022
Asking For:
$250,000 for 10%
Investor:
Robert Herjavec
Deal:
$250,000 for $2.50/unit royalty until $250,000 is repaid, then $1.50/unit until $750,000 is repaid
PRODUCT SUMMARY
Calm Strips are textured sensory adhesives designed to help reduce anxiety and increase focus for users.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Based in Newport News, Virginia, Michael Malkin and Luce Fuller, the founders of Calm Strips, bring diverse experiences to their venture. Michael’s 13-year stint at an Apple retail store exposed him to a high-stress environment that frequently triggered his anxiety. Seeking relief, he resorted to wrapping carpenter’s tape around his finger, finding solace in the tactile sensation.
Their shared vision for a product that could help manage anxiety led them to conceptualize Calm Strips. With a deep understanding of the impact of sensory touch on emotional well-being, Michael and Luce embarked on a journey to create a practical solution for individuals grappling with anxiety and restlessness. Fueled by their personal experiences and the growing awareness of the significance of mental well-being, they channeled their passion into developing a product that could provide comfort and support in various settings.
Motivated by a desire to assist others, they channeled their efforts into the development and promotion of Calm Strips, aiming to offer a simple yet effective solution to address the challenges posed by heightened stress levels in modern lifestyles. Drawing from their personal struggles and a genuine commitment to helping others manage their anxiety, Michael and Luce’s journey with Calm Strips reflects a blend of empathy, innovation, and a strong sense of purpose.
The Product
Calm Strips, the brainchild of Michael Malkin and Luce Fuller from Newport News, Virginia, are innovative textured sensory adhesives crafted to aid in anxiety reduction and focus enhancement. Available in two variants, Soft Sand and River Rocks, these discreet adhesive strips offer a practical solution for individuals seeking to manage their stress levels effectively.
The user-friendly design allows individuals to apply the strips to various surfaces, such as phones, laptops, or desks, enabling easy access to the calming benefits wherever they go. Users can engage with the textured surface by rubbing, scratching, or picking at it, providing a sensory experience that aids in reducing fidgeting and promoting a sense of calm.
Calm Strips have gained popularity among both students and professionals, with teachers and special education professionals also embracing their utility in managing restless energy without disrupting the learning environment. The reusable and residue-free nature of the product adds to its appeal, ensuring ease of use and minimal maintenance. Sold in convenient five-packs, these strips are available for purchase at an affordable price point of $12.49, providing an accessible and practical tool for individuals striving to achieve a calmer state of mind.
How It Went
The company’s position before Shark Tank
Calm Strips, headquartered in Newport News, Virginia, has showcased remarkable performance and robust market positioning since its inception. With an impressive sales record surpassing $2.5 million, the company has solidified its presence in the e-commerce sector. Leveraging their innovative product and effective marketing strategies, Calm Strips has secured a strong foothold in the anxiety management market, catering to a diverse customer base that includes students, professionals, and individuals seeking effective stress management solutions.
The company has established partnerships with various educational institutions, including over 3,000 schools, where the product has been well-received by educators and students alike. Special education professionals and doctors have also acknowledged the benefits of Calm Strips in managing anxiety and excess energy, further enhancing the company’s reputation in the field.
Calm Strips operates primarily in the direct-to-consumer market through its online platform, catering to a broad customer base seeking accessible and effective anxiety management tools. The company has maintained a sound financial position, with a notable profit of $193,000 in the previous fiscal year, reflecting its strong revenue generation capabilities and efficient cost management practices. In terms of the company’s structure, Calm Strips has sustained its operations with a focused team dedicated to product development, marketing, and customer support. The company’s effective utilization of available resources and strategic partnerships has contributed to its overall success in the market.
The Negotiations:
During the intense negotiation phase, the founders of Calm Strips, Michael Malkin and Luce Fuller, faced a range of compelling offers from the Sharks. Robert Herjavec was the first to make an offer of $250,000 for a 35% equity stake, emphasizing his belief in the product’s potential. Kevin O’Leary followed with an offer that included a $2.50 royalty per unit until the initial investment was recouped, then dropping to $1, but without the concept of perpetual royalties. However, the term “perpetuity” remained a sticking point for Kevin, leading him to retract his offer during the process.
Lori Greiner expressed her interest, proposing a deal similar to Kevin’s, but with an 8% equity share. Mark and Luce countered with a suggestion of $250,000 for 20% equity, but Lori did not find the terms agreeable for her investment strategy, eventually opting out of the deal. Amidst the negotiations, Daymond John and Mark Cuban appreciated the product’s potential but emphasized the need for further product diversification and expansion to create a scalable business model. Both Sharks acknowledged the promising concept but decided not to invest in the single product at that early stage of development.
Ultimately, after being momentarily left without an offer due to a negotiation misstep, Robert Herjavec was persuaded to re-enter the deal, accepting the initial terms proposed by him. The negotiation process was a rollercoaster, reflecting the challenges of securing a deal that could meet the founders’ expectations while aligning with the Sharks’ investment criteria. Despite some setbacks, the founders successfully secured the necessary investment, ensuring the continuation of their journey to bring Calm Strips to a broader market.
