'Shark Tank' contestants get a life-changing deal from Mark Cuban for their tornado shelter
Several innovative products that solve everyday problems are pitched on "Shark Tank," but it's rare to see something that saves lives. One such product was pitched by entrepreneurs Levi Wilson and Tim Todd, who sought $550,000 for 15% of their business, Life Lift Systems. The company makes shelters that can fit under one's bed to help people take cover from tornadoes or during a home invasion.
While underground shelters are the norm in several households across the country, they come with their own set of problems. Life Lift Systems’ product fits right under your bed. At the press of a button, the bed lifts up, exposing the shelter where one would go in. It’s a lot faster than going into an underground shelter when conditions outside aren’t all that great. The best part is that they didn’t cost an exorbitant amount of money.
The entrepreneurs said that it only took $6,000 to buy and have one installed. That’s in the ballpark of how much it costs to get an underground shelter installed. However, that is what the sharks had an issue with. The cost of manufacturing was $3,600, and the wholesale price was $4,850. Those margins aren’t that great if one considers the cost of installation, which the business has to bear.
The company did have decent sales numbers, since they’d made $550,000 from sales in less than a year. The only issue was the pricing, as installation takes about four hours, which means high labour costs. “You’re not making anywhere close enough money, especially since the fact that you are customizing it, showing up for four hours,” Robert Herjavec explained before asking what the entrepreneurs’ game plan was.
The entrepreneurs said that they had a few wholesalers lined up to buy in bulk and then sell it to customers. Unfortunately, a lot of the sharks did not see a profitable future as investors in the company due to the product’s margins. Mark Cuban, however, was not one of them. He liked the product and understood its need. The shark made an offer of $550,000 for 25% of the company. However, he was not the only one.
Lori Greiner also saw the value in a business that could save lives and made the same offer. As far as Todd and Wilson were concerned, this was a good thing. However, they still had to make a decision, and both sharks even agreed to their counteroffer of $550,000 for 20% at a $100 royalty per unit. Cuban, however, believed that the 25% deal would be a better idea financially.
Ultimately, the entrepreneurs put their faith in Cuban and agreed on the deal for 25%. The shark has experience in the tech industry, and his contacts could come in handy and make the business blow up, especially during tornado season.
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