Revolights are revolutionary bike lights which mount to the front and back tires to always provide safety and visibility for both the rider and the cars sharing the road.
Revolights has two patents, no real competition, and sells for $229 retail.
According to Frankovich, 70% of night bike collisions are due to poor side visibility. Revolights are designed to prevent these accidents by synchronizing light with the bike's speed. Furthermore, due to Revolights' circular design, they are not easily stolen and don't just fall off. In under 12 months, Revolights has sold over $600,000 of the product, though it has yet to turn a profit.
Revolights is exactly the sort of product that gets the Sharks to bite. It is a product that serves a purpose, has been proven to work, has great margins, and a lot of sales.
Daymond was the first to make an offer, though he slightly lowered the valuation by asking for 30% in exchange for $300,000. Kevin followed with one of his typical royalty deals, which in this case was $150,000 for a 7% royalty until the investment is recouped, which then drops to a 1% royalty in perpetuity. While Frankovich was certainly grateful for these two offers, they didn't even come close to Robert's generous offer which doubled the valuation: $300,000 for 10%.
As a general rule, when a Shark offers an entrepreneur exactly what he or she came in asking for, they accept the deal and are beyond thrilled. How much more so is this true when a Shark offers double of what the entrepreneur came in asking for!
However, there are expectations to every rule. Even after Robert made his super generous offer, Kent Frankovich asked to wait to hear what the remaining Sharks had to offer. This got Mark Cuban very suspicious. Mark felt that had Kent really been serious about making a deal in the Tank, there is no way he would have hesitated and not be overjoyed with Robert's offer. And because he felt that Kent just came into the Tank for exposure, he lost trust and went out. Robert though didn't share Mark's opinion and ended up making the deal with Kent for $300,000 for 10% of the company.
Chances are Robert was right. Kent was there to get capital and connections, and he just wanted to hear from all the Sharks before accepting a deal. And the fact that Kent did make the deal, pretty much proves this. However, we can't yet know for sure. It is possible that when the due diligence is done and the papers are ready to be signed, Kent and his company could somehow find a way to back out. It is possible that Mark was right, and Kent just went into the Tank for exposure. We will just have to wait and see.
Who do you side with here - Mark or Robert?