Flated – Inflatable Automobile Accessories
DEAL
EPISODE SUMMARY
🕓 Air Date: March 10, 2023
Asking For:
$350,000 for 5%
Investor:
Daymond John
Deal:
$350,000 for 8% royalty until paid back, then 5% in perpetuity
PRODUCT SUMMARY
Flated offers a line of innovative inflatable automotive accessories, including a topper for vehicles, to maximize usable space during road trips and adventures.
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Background Story
Flated was founded by Ken Hoeve, Monique Keefer, and Ryan Guay. Their background involved working with inflatable paddleboards, and they witnessed the success of inflatables in that market. In 2009, they were working with a paddleboard company, and despite initial skepticism from competitors about inflatable paddleboards, the inflatable paddleboard market eventually boomed and became 90% inflatable. They saw an opportunity to apply inflatable technology for usable space in automobiles.
The Product
Flated’s products use a patent-pending technology called “drop stitch inflatable” to create versatile, lightweight, and easy-to-install automotive accessories. These accessories can be quickly inflated and installed in vehicles to provide additional storage space, and they are equally easy to deflate and store in a backpack when not in use.
The products include Air-Carriers, Air-Toppers, and Air-Decks, catering to road trip enthusiasts who want to maximize their vehicle’s recreational potential. The products are competitively priced, costing significantly less than traditional options like fiberglass toppers. They’ve seen strong sales, with the toppers accounting for approximately 80% of their sales.
How It Went
The company’s position before Shark Tank
Flated had a year-to-date sales figure of $277,000, with a goal of reaching $600,000 for the year. They secured a purchase order from a national retailer worth over $100,000, and they had raised $500,000 in funding, with a minimal personal investment of $200 each. The founders had other commitments, but one of them had left a VP of sales position to work on the business full-time.
The Negotiations:
The negotiations on “Shark Tank” did not go as expected for Flated. Several Sharks dropped out, expressing concerns about the company’s valuation and the founders’ ability to take the business to the next level. Daymond John ultimately offered a deal of $350,000 for an 8% royalty on each unit sold, which would drop to 5% in perpetuity.
After some consideration, the founders accepted Daymond’s offer. The negotiation was primarily centered around finding a funding solution that allowed Flated to continue without giving up equity while also addressing their cash flow issues and production needs.
