Brief Summary
Alex Belli and Clay Bakes, founders of Haven, seek $500,000 for 6% equity to scale their smart lock business. They highlight the ineffectiveness of traditional deadbolts against intruders and present Haven as a solution that significantly strengthens doors. While the sharks acknowledge the product's potential, concerns about high manufacturing costs and low margins lead to most of them declining to invest, though one expresses interest in becoming a customer. Despite the lack of a deal, the entrepreneurs remain determined to pursue their mission of enhancing security.
- Haven is presented as a solution to reinforce doors against break-ins, addressing the limitations of traditional deadbolts.
- The company has achieved $250,000 in sales, selling directly through their website, and has secured a significant purchase order from a school district.
- Sharks express concerns about the company's high manufacturing costs and low profit margins, which hinder its scalability and financial viability.
Introduction and Pitch
Alex Belli and Clay Bakes from Nashville, Tennessee, introduce Haven, a smart lock designed to prevent home break-ins. They are seeking $500,000 for 6% equity in their company. They explain that they developed Haven after experiencing a series of break-ins in their neighborhoods and realizing the inadequacy of traditional deadbolts. They demonstrate how easily a standard deadbolt can be kicked in, emphasizing the need for a stronger security solution.
Haven Product Demonstration
The presenters showcase Haven, which sits at the base of the door and uses a wedge-based barrier to make the door ten times stronger. The lock is operated with a foot pedal, eliminating the need for a deadbolt. They attempt to demonstrate Haven's strength by kicking the door, but the demonstration is initially unsuccessful. They also present two versions of the product: a mechanical version and an electronically controlled version with a key fob and smartphone app for remote access and notifications.
Costs, Sales, and Patents
The mechanical version of Haven costs $67 to manufacture and sells for $182, resulting in a 55% profit margin. The connected version sells for $349 but has a higher cost of goods sold at $175 due to it being the first production batch. The company has a patent issued in the UK and pending in the US. They highlight the potential market in schools, where Haven can be used to quickly lock down classrooms. The company has reached $250,000 in total sales, selling online through their website.
Investment and School Orders
The founders have raised $1.5 million and have $500,000 in convertible note debt. They own 25% of the company each, with the remaining equity held by investors. They share that a school in Melbourne, Arkansas, placed an order for 94 units after a successful installation and positive feedback from parents. The requested investment would primarily be used to scale inventory with their suppliers.
Sharks' Concerns and Offers
Mark Cuban expresses concern about the company's economics and low margins, leading him to decline making an offer. Barbara Corcoran believes the company faces a significant challenge and also opts out. Kevin O'Leary finds the product interesting but feels it is too early for him to invest. Daymond John acknowledges the value of mentorship but believes that taking a larger stake in the company would not be in the entrepreneurs' best interest, so he refrains from making an offer.
Final Remarks and Future Plans
Despite not securing a deal, the entrepreneurs remain optimistic and committed to their mission. They emphasize their dedication to solving the problem of home break-ins and their intention to continue growing their business. They highlight their existing residential and commercial customers and their determination to persevere, guided by the motto of never quitting.
