SMARTwheel
DEAL
EPISODE SUMMARY
🕓 Air Date: February 15, 2013
Asking For:
$100,000 for 15%
Investor:
Robert Herjavec, Mark Cuban (50/50)
Deal:
$100,000 for 30%
PRODUCT SUMMARY
The SMARTwheel is a device designed to prevent distracted driving by alerting drivers when they engage in unsafe hand positions.
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Background Story
The Inventioneers, consisting of six inventors aged 12 to 18, created the SMARTwheel to address the issue of distracted driving. They were motivated by the desire to make a positive impact and save lives, recognizing the dangers posed by distracted driving among teen drivers. The idea stemmed from their own experiences and observations, as well as the alarming statistics of teenage fatalities resulting from car crashes. Despite their young age, the team demonstrated a deep understanding of the problem and a passion for finding a solution.
They embarked on a journey to develop the SMARTwheel, leveraging their collective skills, creativity, and determination. Through extensive research, prototyping, and pilot studies, they refined their product and garnered attention, including an invitation to the White House and endorsement from President Obama. The Inventioneers’ dedication to their cause and innovative spirit caught the interest of investors on Shark Tank, leading to a successful pitch and securing a deal to further develop and bring their product to market.
The Product
The SMARTwheel utilizes proprietary technology to track a driver’s hand position and detect unsafe behaviors. It features red lights and a tone alert system that activates when it detects one of three unsafe hand positions: no hands on the wheel, one hand off the wheel, or both hands together indicating texting.
The device records these events and can notify third parties, such as parents, allowing for monitoring and intervention. The Inventioneers plan to sell the SMARTwheel initially through online channels, with potential expansion into retail outlets.
The retail price is set at $200, with estimated manufacturing costs of $50 per unit. The team intends to allocate funding toward completing the final industrial design for manufacturing and initiating the first production run.
How It Went
The company’s position before Shark Tank
The Inventioneers have demonstrated significant progress in developing the SMARTwheel, securing endorsements from high-ranking government officials, and conducting successful pilot studies, including one at M.I.T. However, as of their appearance on Shark Tank, the product remains in the prototype stage, with plans to use the investment capital to finalize the design and begin production.
The company’s primary funding source is the $100,000 investment secured from Mark and Robert on the show. They aim to market the SMARTwheel to teenagers and their parents, highlighting its potential to enhance road safety and prevent accidents caused by distracted driving. The company structure likely involves the six young inventors, possibly with guidance or support from mentors or advisors.
The Negotiations:
Despite initial skepticism from some sharks, Mark and Robert saw potential in the Inventioneers and their product. Robert’s offer of $100,000 for 30%, contingent on securing a licensing deal with a car company, prompted a counteroffer from Lori, who expressed concerns about the reporting feature.
Ultimately, Mark and Robert adjusted their offer to remove the contingency, agreeing to invest $100,000 for 30% equity. This deal was accepted by the Inventioneers, marking a successful negotiation that aligned with their goals of bringing the SMARTwheel to market and making a positive impact on road safety.
