MAXPRO Fitness
DEAL
EPISODE SUMMARY
🕓 Air Date: December 17, 2021
Asking For:
$500,000 for 2,50%
Investor:
Mark Cuban
Deal:
$500,000 for 3% + 5% advisory shares over 5 years
PRODUCT SUMMARY
MAXPRO SmartConnect is a compact 10-pound portable cable machine that offers resistance levels from 5 to 300 pounds, making it a versatile fitness solution for on-the-go workouts.
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Background Story
Nezar’s journey to founding MAXPRO is a testament to his adaptability and innovation in response to a glaring problem. With a rich background in the automotive industry spanning 25 years, he was intimately familiar with the demands of a fast-paced, on-the-go lifestyle. His extensive experience in this field shaped his perspective on efficiency and practicality. During his frequent travels, Nezar faced a dilemma that countless individuals encounter: the lack of accessible and convenient fitness equipment while on the road.
This challenge served as the spark for his entrepreneurial venture. Nezar envisioned a solution that would not only meet his personal fitness needs but also offer a versatile fitness option for people from all walks of life. Drawing upon his engineering expertise, Nezar set out to create MAXPRO, a portable cable fitness machine that defied the limitations of conventional workout equipment. His profound understanding of product development and supply chain management, gained from his years in the automotive industry, provided a solid foundation for turning his innovative concept into a reality.
MAXPRO’s inception was a direct response to the escalating demand for fitness solutions tailored to the modern, fast-paced world. Nezar’s determination to bridge the gap between fitness and travel led to the development of a game-changing product, one that would ultimately captivate the attention of investors on “Shark Tank.” His journey exemplifies the power of innovation in addressing real-world challenges and creating solutions with broad-reaching appeal.
The Product
MAXPRO SmartConnect represents a groundbreaking fitness solution. At its core, it features 10-foot cables constructed from Dyneema, a high-molecular polyethylene known for its incredible strength and durability. These cables provide a remarkable range of resistance, spanning from a mere 5 pounds to an impressive 300 pounds. Such versatility allows users to tailor their workouts to their fitness levels and goals, making it suitable for beginners and seasoned fitness enthusiasts alike.
What truly sets MAXPRO apart is its portability. Weighing in at a mere 10 pounds, this compact fitness machine can be effortlessly transported, making it an ideal companion for travelers, fitness enthusiasts, and anyone with a busy lifestyle. The absence of heavy, bulky equipment and gimmicky gadgets makes it a convenient option for those looking to maintain their fitness regimen no matter where they are.
To enhance the fitness experience, MAXPRO offers an accompanying coaching app. This app not only guides users through their workouts but also provides detailed workout analytics, enabling users to track their progress and make data-driven fitness decisions.
Despite the premium quality and advanced technology embedded in MAXPRO SmartConnect, it is available to consumers for $849. Impressively, 97% of their sales occur through direct-to-consumer channels, underscoring its popularity and accessibility in the fitness market. MAXPRO SmartConnect’s exceptional features and affordability make it a standout fitness product with vast potential for growth.
How It Went
The company’s position before Shark Tank
MAXPRO’s performance in the market has been nothing short of remarkable. In the span of just one year, the company achieved noteworthy sales figures. From July to December of the previous year, they managed to generate an impressive $4 million in revenue. Building on this success, their performance in the current year has been even more outstanding, with sales surpassing the $8 million mark. This meteoric rise in revenue showcases the strong demand for their innovative fitness solution.
One of the key indicators of MAXPRO’s success is their exceptionally low return rate, which stands at less than 5%. This statistic reflects the high level of customer satisfaction and the product’s ability to meet the fitness needs of its users effectively. Their coaching app, which provides detailed workout analytics, further enhances the customer experience, offering a unique and engaging workout experience.
Despite their burgeoning sales and positive customer feedback, MAXPRO faces a financial challenge. The company is currently incurring a monthly burn rate of approximately $100,000, indicating that their expenses are outpacing their revenue. This situation, while not uncommon for businesses in the growth phase, underscores the need for additional investment and financial management. It’s important to note that despite these costs, MAXPRO remains profitable on each product sold, which positions them for potential future success and scalability.
The Negotiations:
During the negotiations on “Shark Tank,” the presentation of MAXPRO by Nezar sparked a competitive bidding war among the Sharks. Notably, Mark Cuban and Daymond John emerged as the primary contenders, each offering unique deals. Mark Cuban, renowned for his tech investments and entrepreneurial expertise, extended an offer of $500,000 in exchange for a 3% equity stake in MAXPRO. Additionally, he proposed an intriguing aspect—an advisory shares deal that mirrored the terms given to basketball legend Shaquille O’Neal, who had endorsed the product. This would entail a further 5% in advisory shares, vested similarly to Shaq, facilitating collaboration between the two well-known figures.
Daymond John, famed for his fashion and lifestyle investments, presented a competitive proposition. He offered the same $500,000 but for a slightly higher equity stake, 2.5%. However, Daymond’s unique twist was the inclusion of a royalty arrangement—$25 per unit until the initial investment was recouped, after which the equity would convert to 4%. While Daymond’s royalty structure was a significant point of interest, Mark Cuban’s deal ultimately aligned more closely with Nezar’s vision for MAXPRO.
The endorsement from an influential tech-oriented investor like Mark, along with the potential synergy with Shaquille O’Neal, made it an enticing prospect. Nezar recognized the value of Mark’s offer and, after seeking clarification on the potential to replace the line of credit and inventory issues, enthusiastically accepted Mark’s offer. The negotiations showcased the strategic thinking and diverse investment styles of the Sharks, highlighting the appeal of Mark Cuban’s deal and the potential for MAXPRO’s future growth as a global lifestyle brand.
