‘Shark Tank’ offers $250,000 deal to 2 friends who built their business from college dorm room

Some of the great businesses in the world today originated on college campuses and garages where young minds came together to turn innovative ideas into game changing products. Not all of them became successful but the ones that did shaped the world that we live in. Sam Chason and Matt Gronberg will be able to tell their own success story as two college students who started a business to help pay off their student loans and ended up landing a $250,000 deal on “Shark Tank.”

Their business is called Storage Scholars and the work they do is simple. They have a network of students across several colleges who pack up and store the belongings of those who avail of their service between semesters and school years. Before a semester ends, students often worry about where to pack their things up and store them. That’s the need Storage Scholars fulfills.

It’s a simple idea but not many people identified this demand and made it as big as Chason and Gronberg. They started working from their dorm room when they were students at Wake Forest University. With six-figure college debts looming over their heads and $70,000 per year for tuition and housing, they had to come up with something to make some money on the side. The two youngsters went through the grind as well by going door to door and offering their services, only to be laughed at in the initial years.

Their business took off in a big way afterward as at the time of filming, Storage Scholars had pulled in $1.86 million in 2022. This was a lot more than the $18,000 they made in their first year of operation as per CNBC. When asked about their charges, the entrepreneurs revealed that it was $559 for the full service per student. This included packing, moving, and storage. The cost required the perform the full service was $199.

That’s a healthy margin of profit to have and it’s no wonder that most of the sharks were interested in the opportunity. The issue was that Chason and Gronberg were asking for $250,000 for 5% of their business. That wasn’t enough for either of the sharks who offered deals. Kevin O’Leary and Daymond John both offered $250,000 for 20% of the company. Robert Herjavec then stepped in with a mammoth offer - $500,000 for 20%. It was like a leap of faith for the veteran investor. However, the founders of Storage Scholars had their sights on Mark Cuban who has always been vocal about the administration slashing student loans. His efforts partly led to President Joe Biden pardoning several such loans and making lives easy for students.

“I’ve got a platform. There’s schools that I have connections to and if I get out there starting to talk about it…the phone’s going to ring for you to open up new schools,” he said. “That’s the value that I can bring.”

Cuban was surprised that he had a shot after the $500,00 offer but did not offer as much money. Instead, he went for $250,000 for a 12% stake in the company. After some negotiation, the final deal was settled at 10%. This shot the company’s worth to just over $2 million and both the founders left feeling satisfied.

Today, Storage Scholars has seen steady growth. At the time of recording the episodes, the company had partnerships with 23 schools. That number has more than doubled with 48 schools in their portfolio today as per Looper. Turns out that picking Cuban paid off big time.