Coat Chex on the Shark Tank
Coat Check In - Season 4 - Episode 401
Pacque is looking more for a franchise deal. Mark Cuban lays into him telling how hororable this marketing idea is.
O'Leary asks him why he has never even tried out the concept with REAL People. Derick quickly answers without thinking about it "Because it's been to warm outside". Daymond John cracks up laughing already knowing this is a very valuable step that has been neglected and Derick himself just admitted it might only be a seasonal business. All the Sharks get a good laugh and Derick's presentation starts heading south kind of quick. He says he has a patent on the ticketless technology which sparks interest but the Sharks start dropping out. All of them except for Mark Cuban. You could see Cubans mind going a million miles an hour trying to figure out how many Coat Chex kiosks it will take to cover the Dallas Mavericks Stadium. (Probably all the stadiums in the NBA knowing Cuban) Robert likes the idea (and the patents) but just can't get over the $2 million Pacque put on this unproven business. Derick comes back at a new valuation of $1.5 million. That's not exactly what Robert wanted to hear. Robert's out. Just too much money for a business with zero sales.
Mark Cuban is the only Shark left. He first gives him a free class in business and marketing that Dericks Professor must not of covered (a proven sales record BEFORE you go looking for financing on such a high valuation) and then offers Derick the $200k for 33% of the Coat Chex business. Daymond asks Mark if he is crazy making an offer like that. Derick practically accepts the deal then makes a fatal business decision and asks to go call his teacher first. The teacher thinks its too much equity to give away at such an early stage (remember - NO SALES) advises his student NOT to give a Proven Self-Made Billionaire a third share of the business. Mean while in the Sharks Den Mark is trying his hardest to convince the other Sharks that it's a good offer. Derick returns from his phone call and basically insults Mark that his contribution would not be worth that much. Now the other Sharks are on Dericks side trying to convince him what he is about to throw away if he doesn't accept the deal. Pacque smiles very confident and counters with $200k but for only 20%.
The whole Shark Tank erupts on what they just heard. Cuban is stunned, speechless. Then points his finger at him and said NO and probably thinking Derick needs to go to the school of hard knocks. Dericks teacher may be a good teacher in the classroom but clearly may a lot to learn in the Real Business World. It's hard not to feel sorry for Derick and all the hard work he put into this project. A project that had the potential to have him work along side a billionaire, if he could of just thought for himself at that critical moment. Not to mention a $200,000.00 check that Derick let slip away.
Will Coat Chex and Derick Pacque Become A Success?
|Derick Pacque staying relaxed while |
getting drilled by the Sharks
MY PREDICTION: Derick will be on the Shark Tank again in the future. This time with a proven sales record that will justify Coat Chex valuation.
Keep in touch with Derick at:
Coat Chex on Facebook
Coat Chex Twitter