Draft Top Beer Can Opener
DEAL
EPISODE SUMMARY
🕓 Air Date: February 12, 2021
Asking For:
$300,000 for 10%
Investor:
Daymond John
Deal:
$300,000 for 20%
PRODUCT SUMMARY
Draft Top is a patented bar tool designed to remove the top of canned beverages and turn them into cups, enhancing the drinking experience.
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Background Story
Pat and Armand, the founders of Draft Top, recognized a common problem: the desire for the superior taste of draft beer, even when cans are the only option. They wanted to find a way to enhance the canned beverage experience.
They created Draft Top, a unique tool, which removes the top of canned drinks, offering an aluminum lid-free drinking experience. It solves the wasteful and impractical issue of pouring drinks into cups during camping and fishing.This dilemma inspired them to create a better solution.
The Product
Draft Top is a simple yet innovative tool designed to transform canned beverages into a draft beer-like experience. To use it, you open the handle, place it on the can, squeeze and rotate.
The tool removes the top of the can from the inside rim, leaving no sharp edges, ensuring a safe drinking experience. It’s a practical solution for those who prefer the taste and aroma of draft beer but often find themselves with canned beverages.
Draft Top is sold for $24.99 directly from their website, and it’s made with 100% American craftsmanship. It boasts impressive gross margins of 83% and net margins of 50%, making it a profitable venture.
How It Went
The company’s position before Shark Tank
Draft Top has had a successful start, with sales of $1.6 million in just eight months, selling over 70,000 units. They also conducted a crowdfunding campaign that generated $835,000 in sales. Their lifetime sales have surpassed $2 million, a notable achievement for a product with a fun twist.
The company is in a healthy financial position with approximately half a million dollars in cash. However, they face challenges with inventory as they struggle to keep up with demand. Draft Top’s product is made entirely in the USA, and they have a utility patent protecting their unique design.
The Negotiations:
The Sharks expressed initial skepticism about the product’s usability, with Mark Cuban even struggling to use it during the pitch. Kevin O’Leary and Robert Herjavec both dropped out early, citing concerns about usability and valuation.
Daymond John, however, recognized the potential of Draft Top and made an offer of $300,000 for 20% equity. The founders accepted this offer, valuing their company at $1.5 million, a significant reduction from their initial valuation. They emphasized their need for guidance and a mentor to help them navigate the challenges they were facing, including inventory management.
In the end, the deal with Daymond John was accepted, and the founders celebrated their partnership with enthusiasm. Despite initial doubts about the product’s usability, the Sharks recognized the company’s impressive sales and margins, leading to a successful negotiation that could help Draft Top reach even greater heights in the market.
