M.C. Squares – Reusable Whiteboard Tools
DEAL
EPISODE SUMMARY
🕓 Air Date: May 13, 2020
Asking For:
$300,000 for 10%
Investor:
Kevin O'Leary
Deal:
$300,000 for 25%
PRODUCT SUMMARY
M.C. Squares offers a family of collaborative dry-erase products, including reusable dry-erase stickies and dynamic dry-erase tablets, aiming to replace traditional paper sticky notes and enhance collaboration in various environments.
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Background Story
Anthony Franco, the CEO and founder of M.C. Squares, emerged from Denver, Colorado, with a background as a stereotypical computer nerd who faced teasing in high school. Despite being a wallflower, Franco ventured into entrepreneurship by starting a consulting business.
The turning point occurred during a meeting where a silent saleswoman provided valuable insights after the session ended. Inspired by this, Franco conceived M.C. Squares, creating a collaborative platform with a whiteboard. The tablet version aimed to facilitate idea-sharing in environments where people might hesitate to speak up.
The Product
M.C. Squares’ flagship product, the reusable dry-erase stickies, attaches without adhesive, replacing traditional paper sticky notes and reducing waste significantly. A six-pack of mcSquare Stickies is equivalent to over 12,000 paper sticky notes, offering a sustainable and cost-effective alternative.
Additionally, the company offers dynamic dry-erase tablets designed for metallic surfaces, suitable for brainstorming sessions, organizing thoughts, and lining up calendar events. The stickies adhere to any smooth surface, making them versatile for both home and office use.
How It Went
The company’s position before Shark Tank
In the pitch, Franco disclosed that M.C. Squares generated $214,000 in sales for the year, with a projected $1 million for the year, indicating a substantial growth trajectory. The sudden surge in sales was attributed to redesigning the product line and bringing manufacturing in-house after facing issues with overseas production.
The stickies boast an impressive 92% profit margin, and the Denver-based factory is equipped to scale to $10 million in retail revenue. However, organizational challenges were acknowledged, with Franco admitting to a lack of organization.
The Negotiations:
The Sharks expressed interest in M.C. Squares’ innovative approach but raised concerns about organization and scalability. Barbara Corcoran and Lori Greiner opted out, citing various reasons, including competition with similar products. Mark Cuban commended Franco’s journey but chose not to invest. Kevin O’Leary expressed interest, emphasizing the need for a higher equity stake due to perceived risks.
After some negotiation, a deal was struck with O’Leary for $300,000 in exchange for 25% equity, exceeding Franco’s initial willingness to give away. O’Leary’s offer was based on his expertise and connections, particularly in manufacturing, highlighting the strategic value he brings to the partnership.
