PostureNOW Posture Corrector
DEAL
EPISODE SUMMARY
🕓 Air Date: September 28, 2012
Asking For:
$100,000 for 15%
Investor:
Mark Cuban
Deal:
$100,000 for 30% + $5 royalty until initial investment is paid
PRODUCT SUMMARY
PostureNOW is a simple device worn to improve posture, addressing the worldwide epidemic of poor posture caused by modern lifestyle habits.
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Background Story
PostureNOW founders Mike Lane and Matt Franklin introduced their product on “Shark Tank” seeking a $100,000 investment for a 15% equity stake in their company. The duo came up with the idea after noticing the widespread issue of poor posture resulting from prolonged computer and mobile device usage.
Inspired by their personal experiences and the importance of good posture in ballroom dancing, they developed a wearable device to encourage proper posture. With the endorsement of “Dancing with the Stars” dancers Anna Trebunskaya and Jonathan Roberts, they showcased the relevance of posture in everyday life, extending beyond the dance floor.
The Product
PostureNOW is a wearable device designed to combat poor posture. It consists of two neoprene armbands worn either inside or outside clothing. The device gently reminds wearers to keep their shoulders back and their back straight when their shoulders slouch forward.
Priced at $39.95 retail and $19.95 wholesale, the product targets consumers searching for posture-related solutions online, with over 1 million monthly Google searches on the topic. The founders initially conceived the idea to address personal concerns, aiming to improve posture without sacrificing comfort or lifestyle habits.
The product has gained traction not only among individuals seeking posture improvement but also within the dance community, recognizing the importance of posture in dance performance.
How It Went
The company’s position before Shark Tank
PostureNOW has demonstrated promising sales, accumulating approximately $330,000 in revenue to date. With a net margin of 40%, the company has generated profits of around $132,000. The founders, Mike and Matt, have balanced their entrepreneurial pursuits with other professional endeavors, with Mike working as a sales director for an art handling company and Matt owning a videography business specializing in corporate training films.
Despite an initial investment of $5,000, primarily financed through a credit card, the company has seen significant valuation growth, currently valued at $650,000. They have secured a utility patent for their product, pending approval, and garnered support from chiropractors and HR departments of Fortune 500 companies.
The Negotiations:
The negotiations saw varied offers from the Sharks, with Kevin O’Leary proposing $100,000 for 50% equity and a 10% royalty on every unit sold, which the founders declined. Mark Cuban eventually struck a deal offering $100,000 for a 30% equity stake and a $5 per unit royalty until repayment. This deal required one of the founders, Mike, to quit his job, signaling a commitment to the business full-time.
Despite initial reluctance from Daymond John and Barbara Corcoran, Mark’s offer prevailed, securing a partnership that propelled PostureNOW forward. The negotiation process showcased the challenges of balancing equity, valuation, and investor expectations, ultimately leading to a mutually beneficial agreement that aligned with the founders’ vision for their company.
