Gunnar Optiks – Gaming & Computer Glasses
DEAL
EPISODE SUMMARY
🕓 Air Date: February 11, 2018
Asking For:
$750,000 for 5%
Investor:
Lori Greiner
Deal:
$750,000 for 5%
PRODUCT SUMMARY
Gunnar Optiks offers eyewear designed for the digital age, with patented optical technology proven to relieve computer eye strain by addressing dry eyes, muscular fatigue, glare, and harmful blue light emitted from screens.
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Background Story
The brainchild of founder Joe Croft, Gunnar Optiks was born out of Croft’s extensive experience at Oakley, a prominent player in the performance eyewear category. Recognizing the escalating problem of computer eye strain due to prolonged screen exposure, Croft decided to create a solution. This led to the establishment of Gunnar Optiks, which aimed to revolutionize eyewear for the tech-savvy generation.
The Product
Gunnar Optiks’ eyewear stands out for its ability to block 65% of harmful blue light, a significant contributor to eye strain and sleep disruption.
Priced between $60 and $80, the glasses cater to a broad user base, with a particular focus on gamers. The company boasts battle-tested intellectual property and has solidified its presence in the gaming industry by sponsoring esports athletes.
How It Went
The company’s position before Shark Tank
In the financial realm, Gunnar Optiks reported $6.5 million in sales for the previous year, projecting an increase to $7.5 million for the current year, with a healthy 60% gross margin. The average price point for their eyewear falls within the $60 to $80 range. The company has successfully reached profitability, demonstrating an EBITDA of $500,000 in the previous year. However, Gunnar Optiks also acknowledged having a debt load of $1.2 million.
The Negotiations:
Following the pitch, Joe Croft received offers exclusively from Lori Greiner. Her proposal involved a $375,000 investment and a $375,000 loan at 8% interest, in exchange for 8% equity. Notably, Mark Cuban and Robert Herjavec expressed reservations about the equity and debt levels within the company. Despite the concerns, Lori persisted and made a revised offer of 5% equity for $750,000 as a loan at 8%. After a bit of negotiation, Joe agreed to the deal, securing an investment from Lori Greiner.
This negotiation highlighted the delicate balance that entrepreneurs must strike between securing necessary capital and managing equity dilution. Ultimately, Gunnar Optiks found a strategic partner in Lori Greiner, who not only provided the required funding but also brought valuable industry insights and a robust network to fuel the company’s growth.
