SurfSET Fitness
DEAL
EPISODE SUMMARY
🕓 Air Date: September 21, 2012
Asking For:
$150,000 for 10%
Investor:
Mark Cuban
Deal:
$300,000 for 30%
PRODUCT SUMMARY
SurfSET Fitness offers surf-inspired exercise equipment and group fitness classes, with their flagship product being the RipSurferX, the world's first total body surf trainer.
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Background Story
Sarah Ponn and Mike Hartwick, founders of SurfSET Fitness, presented their innovative fitness concept on Shark Tank. Mike, a former professional hockey player, and lifelong surfer, discovered the correlation between surfing and improved athletic performance. With Sarah’s background in finance and Mike’s passion for surfing, they developed SurfSET Fitness.
The idea stemmed from Mike’s desire to spend more time surfing as his hockey career wound down. Recognizing the fitness benefits of surfing, they aimed to replicate the experience on land. Their journey began with running classes, quickly gaining popularity and garnering media attention. They showcased their product on Good Morning America and Access Hollywood, attracting high-profile clientele.
The Product
SurfSET Fitness offers the RipSurferX, a surf-inspired exercise equipment designed to mimic the instability of a surfboard on water. The RipSurferX enables users to engage their entire body, including arms, core, balance, and stability, through a variety of movements similar to surfing. The equipment allows for a challenging workout experience suitable for all fitness levels.
Users can perform exercises such as pop-ups, duck dives, and water walkers, which target different muscle groups and improve overall fitness. The equipment’s instability forces users to engage their core muscles to maintain balance, providing a comprehensive full-body workout.
The RipSurferX is adjustable, allowing users to customize the difficulty level by adding or removing stability elements. Priced at $400 retail, with a manufacturing cost of $150, the product offers a competitive margin. SurfSET Fitness also offers group fitness classes led by certified trainers, providing additional revenue streams and building a community around their brand.
Customers can purchase the RipSurferX directly from SurfSET Fitness or through authorized retailers. Additionally, the company offers franchise opportunities for entrepreneurs looking to open private studios.
How It Went
The company’s position before Shark Tank
SurfSET Fitness experienced rapid growth since its inception, generating $150,000 in revenue within four months of launching classes. The company gained traction in New York City, where they set up 11 machines in a large gym and sold out classes for four consecutive months. Their success attracted media attention, with appearances on national television shows.
Partnerships with celebrities and high-profile endorsements contributed to their brand’s visibility and credibility. With 200 inquiries for franchising and private studio openings, SurfSET Fitness demonstrated strong market demand. The company’s profitability is underscored by its ability to sell classes at $35 per session and maintain high demand. However, their valuation of $1.5 million raised questions among the sharks, prompting negotiations over equity and investment terms.
Currently, SurfSET Fitness relies on external funding to support its expansion efforts. The founders acknowledge the need for strategic partnerships and financial support to capitalize on market opportunities and maintain growth momentum. The company’s structure involves a combination of direct sales, franchising, and partnerships with fitness facilities. They prioritize customer experience and community engagement to foster brand loyalty and drive long-term success.
The Negotiations:
The negotiations began with Sarah and Mike seeking $150,000 for 10% equity in SurfSET Fitness. Mark Cuban made the first offer, proposing $300,000 for 33% equity, emphasizing the importance of adequate funding and strategic partnerships for the company’s success. Other sharks, including Daymond John and Kevin O’Leary, offered $150,000 for 25% equity, with Daymond emphasizing the value of including manufacturing capabilities in the deal. Barbara Corcoran attempted to persuade the founders to accept Mark’s offer, highlighting his expertise in brand building.
Ultimately, Sarah and Mike accepted Mark’s offer of $300,000 for 30% equity, valuing the importance of manufacturing and brand development for their company’s growth. Despite Barbara’s attempt to intervene, Mark’s extensive experience and resources swayed the founders’ decision. The negotiation process highlighted the sharks’ differing perspectives on the company’s valuation and investment needs. While some sharks emphasized the importance of retaining equity, others focused on the value of strategic partnerships and resources for scaling the business effectively. In the end, Sarah and Mike secured a substantial investment from Mark Cuban, positioning SurfSET Fitness for accelerated growth and market expansion.
