Somnifix Mouth Tape
DEAL
EPISODE SUMMARY
🕓 Air Date: April 21, 2019
Asking For:
$500,000 for 10%
Investor:
Mark Cuban
Deal:
$500,000 for 20%
PRODUCT SUMMARY
Somnifix mouth strips, a sleep solution that stops mouth-breathing, promoting deep and quiet sleep.
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Background Story
Somnifix, headquartered in McLean, Virginia, emerged from the innovative mind of founder Nicholas Michalak. Nicholas, deeply rooted in the pursuit of addressing a prevalent issue affecting many individuals, hails from a background that combines a personal connection to sleep apnea with a passion for finding practical solutions. The impetus for Somnifix originated from the observation that a significant number of people facing sleep-related challenges, including snoring and discomforts like dry mouth and nasal congestion, shared a commonality—they were mouth-breathers during sleep. This realization prompted Nicholas to delve into the development of a product that could revolutionize sleep quality.
Nicholas Michalak’s entrepreneurial journey began in McLean, where he conceptualized and founded Somnifix. The company’s mission was clear—to provide an effective solution for individuals grappling with sleep issues attributed to mouth-breathing. Nicholas’s personal experience, coupled with a familial connection to sleep apnea, fueled his determination to create a product that could make a substantial difference in people’s lives. Driven by a commitment to excellence, Nicholas brought Somnifix to life, focusing on developing mouth strips that gently closed the lips during sleep, encouraging airflow through the nose. This innovative approach aimed to enhance the quality of sleep, alleviate snoring, and mitigate associated discomforts.
The combination of personal dedication, a keen understanding of the sleep-related challenges faced by many, and a commitment to rigorous development processes, including clinical studies conducted at Harvard Medical School, positioned Somnifix as a leader in the sleep solutions market. Nicholas Michalak’s journey exemplifies the power of entrepreneurial spirit and a genuine desire to improve the well-being of others through innovative solutions.
The Product
Somnifix, the brainchild of Nicholas Michalak, is a revolutionary sleep solution designed to combat the challenges associated with mouth-breathing during sleep. The flagship product, Somnifix mouth strips, employs a simple yet effective mechanism to enhance sleep quality. These hypoallergenic strips are ingeniously crafted to gently hold the lips closed during sleep, directing airflow through the nose. The primary benefit of this innovative design is a significant reduction in snoring and an improvement in overall sleep quality.
Mouth-breathing, a common culprit behind disrupted sleep, can lead to discomforts like dry mouth, sore throat, and nasal congestion, all of which Somnifix aims to alleviate. Each strip includes a small breathing vent as a safety feature, allowing for mouth-breathing when necessary. The strips are user-friendly, and application involves removing any lip balms or lubricants, closing the lips, and ensuring the vent aligns with the lip meeting point. Priced at $15.49 per box, each containing 28 strips, Somnifix provides a cost-effective solution for better sleep.
Somnifix strips have garnered attention for their efficacy, with clinical studies conducted at Harvard Medical School demonstrating an average reduction in snores by 72%, and in some cases, up to 100%. Available for purchase online, Somnifix is not just a product; it’s a transformative sleep aid addressing a prevalent issue that impacts the well-being of many.
How It Went
The company’s position before Shark Tank
Somnifix, after just nine months on the market, has exhibited robust performance, establishing itself as a leader in the sleep solutions sector. The company’s health is marked by impressive sales figures, with revenues exceeding $350,000 to date and a promising trajectory of 40% month-over-month growth. These encouraging numbers underscore the market’s positive response to the innovative mouth strips. In terms of partnerships, Somnifix has successfully forged a clinical-trial partnership with researchers from Harvard Medical School, a collaboration that adds credibility to the product and demonstrates a commitment to scientific validation.
The company’s emphasis on research and development is further emphasized by having obtained nine granted patents and international protection in over 70 countries. Somnifix’s distribution strategy involves online sales, making the product easily accessible to its diverse customer base. The company caters to individuals struggling with sleep-related challenges, particularly those associated with mouth-breathing during sleep. Customers seeking a reliable and non-intrusive solution for snoring and related discomforts find Somnifix’s offerings appealing.
In terms of funding, Somnifix has been primarily backed by a significant investment from the founder and his family, totaling $1.4 million. This substantial commitment has been instrumental in covering expenses related to product development, clinical studies, and intellectual property protection.While the company’s profits and losses are not explicitly detailed, its investment in rigorous clinical studies and intellectual property, coupled with the promising revenue figures, indicates a prudent approach to long-term sustainability. Somnifix’s available capital positions it favorably for continued growth and potential diversification of its product offerings.
The Negotiations:
In the “Shark Tank” negotiations, Nicholas Michalak presented Somnifix, seeking a $500,000 investment for a 10% equity stake in the company. The sharks were intrigued by the innovative sleep solution targeting mouth-breathing issues during sleep. The negotiation took an interesting turn when Mark Cuban expressed concern over the $5 million valuation and questioned the financial judgment of spending twice as much as necessary to launch the product.
Despite these reservations, Cuban made an offer of $500,000 for a 20% equity stake, effectively valuing the company at $2.5 million. Nicholas Michalak, recognizing the value of having Mark Cuban on board, accepted the offer, expressing his excitement about working with an entrepreneur who understood their vision. The negotiation showcased the sharks’ scrutiny of the company’s financial decisions and valuation, with Mark Cuban ultimately providing a substantial investment while revising the valuation to align with his perceived value of the company.
This negotiation highlighted the balance between securing necessary funding and the sharks’ role in adding value beyond capital. Mark Cuban’s strategic investment came with a reduction in valuation, reflecting his assessment of the company’s financial standing. Overall, the negotiation concluded with a successful deal, as Nicholas Michalak secured the desired investment to further propel Somnifix’s growth in the sleep solutions market.
