Thompson Sweat Proof Undershirts
DEAL
EPISODE SUMMARY
🕓 Air Date: May 5, 2017
Asking For:
$700,000 for 7%
Investor:
Robert Herjavec
Deal:
$700,000 for 25%
PRODUCT SUMMARY
Thompson Tee offers an undershirt with Hydro-Shield sweatproof technology, designed to block underarm sweat.
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Background Story
Thompson Tee, founded by Billy Thompson and Randy Choi, is a sweat-repelling undershirt company based in Orange County, California. The inception of the Thompson Tee can be traced back to Billy Thompson’s personal struggle with excessive underarm sweating, a challenge he faced since his 7th-grade years. Thompson, recognizing the widespread nature of the issue, sought a solution that went beyond conventional antiperspirants. In a serendipitous turn of events, Thompson reached out to Randy Choi, a friend and an individual with experience in the apparel industry. It became evident that Choi not only shared a friendship with Thompson but also a common affliction – hyperhidrosis, the clinical term for excessive sweating.
This shared experience and mutual understanding of the problem fueled their passion to create a product that could revolutionize how individuals dealt with underarm sweat. Thompson and Choi collaborated to develop the Thompson Tee, an undershirt equipped with Hydro-Shield sweatproof technology. The innovation lay in its triple-layered design, featuring an inner layer with an ultra-thin, four-way stretch, compound polymer, medical-grade film. This layer allowed vapor to pass through while effectively blocking moisture, creating a sweatproof barrier.
The company takes pride in the handcrafted nature of its products, emphasizing that all Thompson Tees are made in the U.S.A. The founders’ dedication to addressing a common yet often overlooked problem led to the creation of a product that not only offers a practical solution but also reflects their commitment to quality and innovation in the apparel industry. The Thompson Tee has since garnered attention for its effectiveness in addressing underarm sweat, gaining recognition as a transformative solution to an age-old problem.
The Product
The Thompson Tee stands out as a revolutionary solution for those grappling with underarm sweat issues. Utilizing Hydro-Shield sweatproof technology, the undershirt employs a sophisticated triple-layered design to combat excessive sweating discreetly and effectively. The innermost layer incorporates an ultra-thin, four-way stretch, compound polymer, medical-grade film, allowing vapor to pass through while creating a formidable barrier against moisture.
The unique construction of the Thompson Tee distinguishes it from conventional undershirts. Unlike basic padded undershirts, Thompson Tee’s innovation is anchored in proprietary technology, ensuring comfort, breathability, and reliable sweat protection. The sweatproof guarantee assures users of a dry experience, even in stressful or high-pressure situations.
Available in two fits – the original fit resembling a traditional undershirt and the slim fit tailored to the body’s contours – the Thompson Tee caters to various preferences. Prices start at $24.99 for the original fit and $29.99 for the bamboo line. The affordability and versatility make the Thompson Tee an accessible solution for individuals seeking effective underarm sweat management.
How It Went
The company’s position before Shark Tank
Thompson Tee demonstrates a robust and impressive performance trajectory. The company’s health and position in the market reflect consistent growth, with sales figures that underscore the widespread demand for their innovative sweat-repelling undershirts. The founders, Billy Thompson and Randy Choi, have successfully positioned Thompson Tee as a leader in the niche market addressing underarm sweat issues. Thompson Tee’s sales have seen a significant uptick over the years, showcasing a clear demand for their Hydro-Shield sweatproof technology. Sales figures reveal a progression from $90,000 in the first year to an impressive $2 million in the fourth year.
Year-to-date projections indicate a continuation of this growth, with an expected $4 million in total sales. The company primarily sells its products directly to consumers through its website and the Amazon platform. This direct-to-consumer model not only ensures accessibility for customers but also allows the founders to maintain control over the quality and authenticity of their brand. The commitment to maintaining high standards aligns with the company’s goal of providing effective and reliable solutions to its customer base. Thompson Tee’s success is not only reflected in its sales numbers but also in its profitability.
The company maintains a healthy profit margin of 25%, a commendable feat in the competitive apparel industry. This profitability has contributed to the founders’ decision to seek additional funding to bring production in-house, aiming to enhance cost efficiency. Thompson Tee stands as a thriving business, capitalizing on its innovative product and addressing a genuine need in the market. The founders’ commitment to quality, coupled with a direct-to-consumer sales strategy, has positioned the company for continued success and growth in the competitive apparel industry. The sought-after investment from the sharks is intended to further fuel this growth by bringing production in-house and enhancing operational efficiency.
The Negotiations:
The negotiation process for Thompson Tee on “Shark Tank” was dynamic and filled with strategic moves from both the entrepreneurs and the sharks. Initially seeking $700,000 in exchange for 7% equity, Billy Thompson and Randy Choi were met with skepticism regarding their $10 million valuation for a T-shirt business. The sharks expressed concerns about entering the manufacturing space and the high valuation. Robert Herjavec emerged as the first interested shark, offering $700,000 for a 25% equity stake, emphasizing his belief in the founders and their marketing capabilities.
Kevin O’Leary then proposed an alternative offer—a $700,000 loan with 18% interest and a 7% equity stake. However, this debt financing proposal did not resonate with the founders, who ultimately accepted Robert Herjavec’s equity offer. Mark Cuban, Lori Greiner, and Kevin O’Leary bowed out of the negotiations, expressing concerns about the valuation and the challenges associated with manufacturing. Herjavec’s offer presented a balance between investment and mentorship, as he acknowledged the founders’ role in marketing and expressed confidence in their ability to steer the company.
The negotiation showcased the founders’ ability to navigate the sharks’ concerns and secure a deal that aligned with their vision for the company. While the valuation was a point of contention, the founders successfully conveyed the growth potential of their business, and Robert Herjavec’s offer provided the capital needed to bring production in-house, a strategic move aimed at further scaling their successful enterprise. Ultimately, the negotiation resulted in a mutually beneficial deal, with the founders expressing gratitude for the opportunity and Robert Herjavec celebrating the partnership.
