Neuro – Energy Caffeine Gum
NO DEAL
EPISODE SUMMARY
🕓 Air Date: April 10, 2020
Asking For:
$750,000 for 5%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Neuro offers NeuroGum and NeuroMints, providing clean and balanced energy through a blend of natural caffeine, L-theanine, and vitamins, with each piece containing as much caffeine as half a cup of coffee.
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Background Story
Kent and Ryan, the founders of Neuro, met in college where Kent was studying neuroscience and training with the Japanese Olympic judo team, while Ryan studied chemistry and was a second-degree black belt in karate. Their diverse backgrounds in athletics and science inspired them to create a product that could provide a clean and convenient energy boost.
The idea for NeuroGum originated when Kent, facing the challenges of balancing intense training with academics, began mixing his own supplements. The journey to Neuro’s creation took a significant turn when Ryan, a close friend of Kent, experienced a severe snowboarding accident resulting in multiple surgeries and a challenging recovery. This adversity became the catalyst for Kent and Ryan to seek a more fulfilling and energetic life, leading to the birth of Neuro.
The Product
NeuroGum and NeuroMints utilize a patented cold-compressed method, blending natural caffeine, L-theanine, and B6/B12 vitamins in each piece. The product delivers as much caffeine as half a cup of coffee and is designed for quick absorption through the mouth.
It offers clean, balanced energy without the drawbacks of sugar or GMOs and is vegan-friendly. The founders highlight its effectiveness within 5 to 10 minutes, making it a convenient alternative to coffee and energy drinks. NeuroGum retails for $3.95 to $3.99, with production costs at 67 cents per unit.
How It Went
The company’s position before Shark Tank
After approximately four years in the market, Neuro has achieved around $3.5 million in sales for the current year, with a significant sales increase compared to the previous year’s $1.5 million. The company initially focused on online and Amazon sales, with a notable repeat customer rate (33% on the website and 21% on Amazon). Neuro recently entered retail and is available in 5,500 locations, becoming the second-best-selling product in memory focus at CVS.
The founders emphasize their high gross margins due to the low production costs of NeuroGum and NeuroMints. They are expanding their retail presence, with significant partnerships secured, including deals with Delta and JetBlue. However, they express challenges and risks associated with retail, such as marketing and listing fees, and seek additional expertise to navigate this terrain.
The Negotiations:
The Sharks express admiration for the founders’ story and the product’s success so far. Lori expresses admiration but is out. Robert offers $1,000,000 for 20%. Kevin proposes a unique deal with 50 cents royalty until $1 million is paid and $750,000 for a 5% equity. The founders counteroffer Robert at a $10 million valuation, but he declines, leading to Robert’s exit.
Mark and Daniel also express their admiration but decline to invest due to various reasons, leaving the founders with no deal. The negotiation highlights the challenges of valuation and the founders’ vision of transitioning from a product to a lifestyle brand. Despite Kevin’s warning, the founders decided not to accept his offer, emphasizing their commitment to building a national brand.
