RinseKit Portable Shower & Sprayer
DEAL
EPISODE SUMMARY
🕓 Air Date: February 3, 2017
Asking For:
$250,000 for 5%
Investor:
Daymond John
Deal:
$250,000 for 7,50%
PRODUCT SUMMARY
RinseKit is the ultimate portable shower system, providing a quick and efficient way to rinse off in outdoor activities like surfing, camping, and more.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
RinseKit, a revolutionary portable shower system, was born out of the coastal experiences of its founders, Chris Crawford and Eric Fagan. Hailing from the surf haven of San Diego, California, both Chris and Eric shared a passion for outdoor activities, particularly surfing, which played a pivotal role in the genesis of RinseKit. Chris Crawford, having previously owned a pool business, brought a wealth of knowledge in hydraulics, plumbing, electrical work, and engineering to the table. This background proved instrumental in conceptualizing and developing the innovative portable shower system. His personal frustration after surfing sessions, dealing with salt and sand clinging to him, led to the invention of RinseKit.
The initial spark for the product came from a desire to provide a quick and effective solution for surfers like himself to rinse off after hitting the waves. Eric Fagan, on the other hand, contributed to the venture with expertise in sales and operations, having previously held key roles in global companies. His involvement in running successful operations complemented Chris’s technical skills, making them a well-rounded team poised for entrepreneurial success.
The RinseKit concept evolved beyond just addressing the needs of surfers. As they delved into the design process, Chris and Eric realized the broad applicability of their product. It became a versatile solution for various outdoor activities, including camping, fishing, and hunting. The founders transformed personal necessity into a product with widespread appeal, positioning RinseKit as the ultimate portable shower system that revolutionizes outdoor cleanliness.
The Product
RinseKit stands as a game-changing portable shower system, offering a swift and efficient solution for on-the-go cleanliness during outdoor adventures. The innovative design centers around simplicity and effectiveness. The operation is straightforward: each RinseKit comes equipped with a special adapter that attaches to a standard hose bib. Using a quick-connect nozzle, users connect it to the hose bib, turn on the water source, and the system’s internal chamber pressurizes, storing water at 65 PSI. This process takes a mere two minutes, providing a portable reservoir with a capacity of two gallons.
This pressurized water system allows RinseKit to deliver water at the same pressure as a garden hose. The nozzle features various settings, offering versatility for different uses. It can provide a continuous spray for over five minutes on the center setting, ideal for quick rinses, or a mist setting that extends to 30-45 minutes, perfect for cooling off during outdoor activities.
RinseKit’s design is not only practical but also versatile. The removable top allows users to stand on it, turning it into a convenient shower platform. The product caters to a wide range of activities, including camping, fishing, and hunting, ensuring users can maintain cleanliness in various outdoor scenarios.
Priced at $89.99 retail, RinseKit offers a cost-effective and reusable solution for outdoor enthusiasts. The wholesale price is set at $45, making it an attractive option for retailers. RinseKit can be purchased directly through their website or through various retail outlets, providing a convenient and accessible solution for those seeking a portable and efficient shower system for their outdoor endeavors.
How It Went
The company’s position before Shark Tank
RinseKit has demonstrated robust health and growth in the portable shower system market. As of the latest data, the company is positioned as a prominent player, projecting revenues of $2.1 million to $2.3 million in the current year with a net profit of approximately $100,000. The product’s success is underscored by its widespread adoption, achieving sales of just under $800,000. The company’s strategic partnerships have contributed significantly to its success. Chris Crawford, the founder, leveraged his background in the pool business to establish essential connections, and RinseKit’s partnership with key retailers has played a pivotal role in their market penetration.
RinseKit’s wholesale pricing at $45 has made it an attractive proposition for wholesalers, enabling the company to establish a presence in retail outlets. The product’s accessibility is further enhanced by its availability on the company’s website, providing direct-to-consumer sales. The customer base for RinseKit is diverse, catering to outdoor enthusiasts, campers, surfers, and individuals engaged in various outdoor activities. The product’s versatility and practicality have garnered a broad appeal, contributing to its strong sales performance.
Funding for RinseKit has primarily come from a mix of personal investment and external support. Chris Crawford sold his entire pool company for $75,000, which was invested in RinseKit. An additional $75,000 was obtained from a client who acquired a 10% stake in the business. The founders acknowledged a debt of $550,000, indicating a reliance on external financing to fuel their operations and expansion. The company’s financial strategy includes a substantial investment in marketing, allocating approximately 10% of gross revenue to promotional activities.
This strategy reflects an aggressive approach to building brand awareness and driving sales. RinseKit’s profitability is expected to improve, targeting high single digits for EBITDA next year and mid-teens in the subsequent years. Currently, Chris owns about 60% of the company, while Eric’s company holds a 10% stake. The company structure suggests a collaborative ownership model, ensuring key stakeholders are invested in the success and growth of RinseKit. These factors collectively highlight RinseKit’s solid market position, sound financial planning, and strategic partnerships, positioning it for continued success in the portable shower system industry.
The Negotiations:
The negotiations for RinseKit in the “Shark Tank” episode were intense, with the founders, Chris Crawford and Eric Fagan, fielding offers from multiple Sharks, each presenting unique terms and considerations. The initial ask was $250,000 for a 5% equity stake in the company. Robert Herjavec made an early offer, proposing $350,000 for a 20% equity share. However, this offer was deemed too dilutive by other Sharks, expressing concerns about the significant equity stake requested. Lori Greiner made an interesting offer, suggesting $250,000 as a debt deal for 5% equity. In addition to the equity, she proposed earning commissions on sales to retailers that she would bring into the fold.
Mark Cuban also proposed a debt deal, with $250,000 for 5% equity, emphasizing the need for the founders to maintain control over their company. Daymond John eventually made the winning offer, providing $250,000 for a 7.5% equity share. This equity deal came with an additional twist — Daymond sought commissions on retailers he could bring in, leveraging his extensive network and experience. Despite concerns from other Sharks about the level of dilution and the long-term viability of the product, the founders ultimately accepted Daymond’s offer.
The negotiation process revealed the delicate balance the founders had to strike between securing necessary capital for growth and preserving a reasonable level of equity. Daymond’s offer aligned with the founders’ vision for market expansion and product growth, making it the most compelling choice. In the end, the negotiation showcased the intricacies of valuation and strategic partnerships, emphasizing the importance of finding a Shark whose expertise and connections align with the company’s trajectory.
