Combat Flip Flops
DEAL
EPISODE SUMMARY
🕓 Air Date: February 5, 2016
Asking For:
$150,000 for 10%
Investor:
Daymond John, Lori Greiner, Mark Cuban (33.3)
Deal:
$300,000 for 30%
PRODUCT SUMMARY
Combat Flip Flops creates products, including footwear, belts, sarongs, scarves, and cashmere, in conflict zones to support skilled entrepreneurs and provide peaceful, sustainable change in areas that need hope.
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Background Story
Combat Flip Flops was founded by Matt Griffin (“Griff”) and Donald Lee (“Lee”), both former Army Rangers with the 2nd Ranger Battalion, 75th Ranger Regiment. Their mission, inspired by their military background, is to create products in conflict areas to support skilled entrepreneurs and bring positive change to communities. They started the business to give back to the countries they served in and created opportunities for local craftsmen and women. The founders highlight their commitment to creating impact through business rather than bullets.
The Product
Combat Flip Flops manufactures a variety of products in conflict zones, including footwear, belts, sarongs, scarves, and cashmere. The focus during the pitch was on their leather flip-flops, particularly the AK-47 model.
The products are made in Colombia, Afghanistan, and Laos. The leather flip-flops cost $20 to make, with a landed cost of $4.90 each. They retail for $70. The company faces challenges in keeping up with demand, leading them to air-ship products. The pitch included a showcase of their products for the Sharks.
How It Went
The company’s position before Shark Tank
In the past year, Combat Flip Flops had total sales of $134,000, and they expected to exceed $300,000 in the current year, projecting a 5% net profit. The distribution was 89% online through their website and 11% through wholesalers. They had signed a Canadian distributor and were in negotiations with military exchanges. The founders mentioned the challenges of scaling but expressed confidence in the support of experienced partners.
The Negotiations:
The negotiation involved a deal with Mark Cuban, Daymond John, and Chris Sacca. Initially seeking $150,000 for 10%, they ended up securing a deal for $300,000 for 30%, with each Shark contributing $110,000. The negotiation highlighted the challenges of diversification in their product line, with Kevin O’Leary expressing concerns about operational logistics risk.
The Sharks emphasized the need for focus, but Mark Cuban and Chris Sacca were drawn to the broader mission of supporting education and empowerment in conflict zones. Lori Greiner attempted to join the deal, but the founders declined, and they closed the deal with Mark Cuban, Daymond John, and Chris Sacca at $300,000 for 30%.
