MistoBox Artisan Coffee
DEAL
EPISODE SUMMARY
🕓 Air Date: May 3, 2013
Asking For:
$75,000 for 15%
Investor:
Mark Cuban
Deal:
$75,000 for 30%
PRODUCT SUMMARY
MistoBox revolutionizes the coffee experience by delivering carefully selected, fresh-roasted artisan coffees from around the world to subscribers' doorsteps each month.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Founders Samantha Meis and Connor Riley, both graduates of the University of Arizona’s entrepreneurship program, conceived MistoBox to address the challenge of discovering and enjoying high-quality, artisanal coffee from small roasters worldwide. They recognized the growing trend of consumers seeking unique coffee experiences and decided to bridge the gap between these artisanal roasters and coffee enthusiasts.
The idea stemmed from their own passion for coffee and their belief in the potential of a subscription-based model to introduce customers to a variety of premium coffees. Operating out of Samantha’s 1,200-square-foot apartment, they launched MistoBox with funds raised from a successful Kickstarter campaign and personal investments. Â
The Product
MistoBox curates four freshly roasted coffee samples from different artisanal roasters worldwide and delivers them monthly to subscribers’ doorsteps. Subscribers can brew and sample the coffees, choose their favorite, and then purchase full-sized bags online.
The subscription service offers three tiers: $15 monthly, $84 for 6-month, and $150 for annual subscriptions. Customers can manage their subscriptions and select their preferred coffee delivery schedule through the MistoBox website. The company’s profit margins range from 30% to 45%, as they source coffee from roasters at discounted rates or for free. Â
How It Went
The company’s position before Shark Tank
MistoBox has experienced rapid growth, acquiring over 700 customers within four months of operation. Their customer acquisition cost is $4.60, indicating an efficient online marketing strategy. The founders have invested their own funds and raised capital through a successful Kickstarter campaign. With a focus on grassroots marketing targeting coffee and foodie communities, MistoBox aims to expand its customer base and increase recurring online sales.
The Negotiations:
After pitching to the Sharks, MistoBox received an offer from Kevin O’Leary of $75,000 for 25%. However, they ultimately accepted Mark Cuban’s offer of $75,000 for 30% equity, doubling O’Leary’s equity stake. Despite some hesitation from Cuban, who initially declined due to concerns about the long-term vision of the market, he ultimately saw potential in the business and struck a deal with MistoBox. The negotiation highlighted the founders’ determination and willingness to adapt to investors’ demands to secure funding for growth.
