Rent Like A Champion – Vacation Rentals
DEAL
EPISODE SUMMARY
🕓 Air Date: October 30, 2015
Asking For:
$200,000 for 10%
Investor:
Mark Cuban, Chris Sacca (50/50)
Deal:
$200,000 for 10%
PRODUCT SUMMARY
Rent Like a Champion connects fans with rental homes near stadiums for a better game-day experience during major college football events.
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Background Story
Rent Like a Champion was pitched by Mike Doyle, the CEO, and Drew Mitchell, the co-founder. The idea was born out of the frustration of having a great game-day experience ruined by the hassle of traveling back to distant hotels after the event. They aimed to solve this problem by connecting fans with rental homes located just steps away from stadiums. The founders recognized the demand during college football weekends when 70% of the 49 million attendees needed a place to stay.
Based in South Bend, Indiana, Rent Like a Champion focuses on non-traditional vacation rental markets, particularly in small towns where the concept of renting homes for events is not well-known. The founders employ digital marketing to target specific zip codes near stadiums, and they personally visit towns to educate homeowners and recruit them to list their properties on the platform.
The Product
Rent Like a Champion is an online platform that simplifies the process of finding short-term rentals for college football weekends. Users visit the website, select the town and event they’re attending, and browse through available weekend rentals that match their criteria. The platform operates in non-traditional vacation-rental markets, offering a unique inventory that may not be found on mainstream platforms like Airbnb.
The founders emphasize the personalized approach in recruiting homeowners, addressing concerns about potential issues with renting out homes. They claim to have a thorough vetting process, with an incident rate of 1.9% over nearly 4,000 rentals. The average charge to the security deposit for incidents is $98.
Rent Like a Champion charges a 15% fee to homeowners and an 8% fee to renters. The business model aims to benefit both sides of the transaction, providing homeowners with extra income and renters with a more convenient and enjoyable game-day experience.
The platform boasts a significant presence in South Bend, its biggest market, with 350 homes available and plans for expansion into additional college towns. The growth in listings and positive experiences shared by homeowners have fueled referrals, contributing to the company’s success. As of the pitch, the company has not raised any external funds, operating on a bootstrapped model.
How It Went
The company’s position before Shark Tank
Rent Like a Champion has processed $6.1 million worth of rentals, earning $1.4 million in fees. In 2014, the platform’s sales were $2.3 million, and in 2015, they projected $4.13 million in transactions, with a net of $950,000 in fees. The company claims to have experienced steady growth and impressive sales figures, given its focused niche in the market.
The founders emphasized their unique selling proposition of catering to families and groups attending college football events, providing a better alternative to traditional hotel accommodations. The focus on smaller towns where the sharing economy concept is not well-known contributes to the platform’s success in attracting homeowners and renters.
The Negotiations:
During the negotiation, the founders emphasized the growth potential and scalability of Rent Like a Champion, aiming to expand into the remaining 20 college towns they had identified. The Sharks were intrigued by the company’s unique approach to a specific market niche and its potential for acquisition by larger players like Airbnb.
The negotiation process involved offers from Kevin O’Leary, Mark Cuban, and Chris Sacca. Kevin offered $200,000 for 15%, while Chris offered $200,000 for 10%. The founders chose to accept the combined offer from both Chris Sacca and Mark Cuban. The deal was finalized at $200,000 for a 10% stake in the company.
Mark Cuban and Chris Sacca expressed their excitement about the deal, with Mark stating that he sees it as a pickup by Airbnb rather than direct competition. The founders were elated to secure the deal, seeing it as an opportunity to leverage the expertise and networks of the Sharks, especially in the sports and technology industries. The negotiation concluded with mutual, enthusiasm and a commitment to move forward with the partnership.
