Inboard M1 Electric Skateboard
DEAL
EPISODE SUMMARY
🕓 Air Date: December 2, 2016
Asking For:
$750,000 for 4%
Investor:
Lori Greiner, Kevin O'Leary (50/50)
Deal:
$750,000 for 6%
PRODUCT SUMMARY
The M1 is an electric skateboard with in-wheel motor technology, reaching 20 mph, and providing a 7 to 10-mile range.
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Background Story
Inboard Technology, headquartered in the picturesque city of Santa Cruz, California, was founded by a trio of innovators: Ryan Evans, Dave Evans, and Chris Haley. The founders, with diverse backgrounds and a shared passion for addressing urban transportation challenges, brought a unique blend of skills to the table. Ryan Evans, Dave Evans, and Chris Haley, hailing from Santa Cruz, have a collective vision of transforming the way people navigate urban areas. Recognizing the frustrations of crowded public transportation and gridlocked drives, they set out to create a solution that would make commuting more efficient and enjoyable.
Ryan Evans, a key figure in the founding team, brought his expertise to the forefront. His understanding of market needs and trends, coupled with a knack for effective communication, positioned him as the face of Inboard’s pitch. Chris Haley contributed a valuable perspective on design and scalability, emphasizing the importance of creating a product that could cater to a broad audience. Dave Evans, likely drawing on his experience and insights, played a pivotal role in steering the company toward high-volume manufacturing and distribution.
The idea for the M1, an electric skateboard with in-wheel motor technology, germinated from the founders’ collective experiences of urban commuting hassles. They sought to provide a practical and fun solution that would redefine personal transportation. The M1, with its sleek design, integrated headlights and taillights, and in-wheel motor technology, was born out of a commitment to revolutionize commuting experiences while maintaining the essence of a real skateboard. The trio’s focus on scalability, manufacturing efficiency, and strategic distribution channels reflected in their pitch, showcasing a comprehensive approach to both product development and business strategy.
The Product
The Inboard M1 is not just an electric skateboard; it’s a pioneering solution in personal transportation. Weighing a mere 14 pounds, this sleek and innovative skateboard is equipped with cutting-edge in-wheel motor technology, distinguishing it from conventional electric skateboards. The motor, ingeniously integrated into the wheels, eliminates the need for belts and gears, ensuring a smooth and maintenance-free ride.
With a top speed of 20 miles per hour and an impressive range of 7 to 10 miles on a single charge, the M1 redefines urban commuting. Safety is paramount, and the skateboard features integrated headlights and taillights, making night rides secure. Designed to resemble a traditional skateboard, the M1 is not just a mode of transportation but a lifestyle accessory. Its portability allows easy transportation, even in crowded spaces or elevators. The simplicity of use is highlighted by its intuitive controls — push forward to accelerate, pull back to brake — ensuring a hassle-free riding experience.
Priced at $1,399, the M1 offers a direct margin of 65%, making it a competitive choice in the electric skateboard market. The product is available for purchase through a network of global distributors, with pre-orders totaling $5.6 million, a testament to the enthusiastic reception and anticipation for this innovative urban mobility solution. The M1 not only addresses the challenges of daily commuting but also adds an element of excitement and style to the journey, making it an attractive option for individuals seeking a practical and enjoyable means of transportation.
How It Went
The company’s position before Shark Tank
Inboard Technology has positioned itself as a promising player in the electric skateboard market, demonstrating robust health and strategic growth. The company’s valuation stood at an impressive $10 million after the last funding round, a testament to investor confidence and the perceived potential of their flagship product, the M1 electric skateboard. The strategic partnerships forged by Inboard have played a pivotal role in its success. The company secured the services of the largest contract manufacturer in the United States, ensuring efficient and high-quality production. Additionally, Inboard entered discussions with major retailers, notably Best Buy, indicating a concerted effort to tap into mainstream consumer markets.
These partnerships not only validate the product’s appeal but also pave the way for extensive distribution channels. Global distributors form a crucial part of Inboard’s sales strategy, with $5.6 million in pre-orders showcasing a strong demand for the M1. The anticipation from these distributors, who are positioned to fulfill orders by the end of the year, reflects positively on the company’s market presence and future revenue potential. In terms of financial health, Inboard has raised a substantial $2.7 million to date, showcasing investor confidence in the company’s vision and growth trajectory.
The founders revealed a direct margin of 65%, indicating a healthy profit margin for the M1 electric skateboard, a crucial factor in sustaining the company’s financial viability. Inboard’s focus on these elements suggests a forward-thinking approach to growth and sustainability. Inboard’s availability of capital, backed by investor funding and pre-orders, positions the company well for continued growth. The negotiation success on Shark Tank, resulting in a deal with Kevin and Lori, further solidifies their financial position and provides access to the Sharks’ expertise and networks.
The Negotiations:
The negotiations for Inboard Technology on Shark Tank showcased a dynamic interplay of strategic maneuvering and successful deal-making. Seeking a $750,000 investment for a 4% equity stake, the founders initially presented an offer that captured the attention of Kevin O’Leary. He extended an offer of a $750,000 loan at an 8% balloon payment in 36 months in exchange for a 2.5% equity stake. However, the negotiation took an unexpected turn when Lori Greiner expressed interest in joining the deal with the same terms, effectively doubling the equity ask to 5%.
As the negotiation evolved, the founders countered, proposing a compromise at 3% equity. This led to a unique situation dubbed the “Loan Shark Tank,” where Kevin and Lori jointly offered the $750,000 loan with an 8% interest rate for 3% equity each, resulting in a combined 6% equity deal. Amidst the negotiations, the founders strategically highlighted the company’s achievements, including securing the largest contract manufacturer in the U.S. and talks with major retailers like Best Buy. This played a pivotal role in justifying their valuation and influencing the Sharks.
A pivotal moment in the negotiation was the founders’ revelation of de-risking the company considerably since the last funding round. They emphasized securing key partnerships and becoming cash-flow positive, contributing to a strengthened valuation. The negotiation process showcased the founders’ adeptness at navigating the Sharks’ concerns while highlighting the company’s value proposition. Ultimately, the founders agreed to the unique joint deal offered by Kevin and Lori, securing a $750,000 loan at a 9% interest rate for a combined 6% equity stake.
