Elevator Pitch: Does It Feel to Make a Million-Dollar Deal?

⁣00:00Entrepreneurs Board of Investors is challenging America to pitch the next big idea.
00:08We created this device.
00:11During a 60 second elevator pitch.
00:14Time's up.
00:15I think that was a master class in pitching.
00:17After each pitch, it takes just one investor to say yes to open the doors and hear more.
00:24But only the ones who say yes can go on and invest.
00:27Awesome to see this deal get done.
00:28Work from home or the home office.
00:30You have a flammable sign standing behind you.
00:33Actually, we use a lot of alcohol in our experiments.
00:35This is going to be so raddesome.
00:41It's Entrepreneur Elevator Pitch with support from Michigan Economic Development Corporation
00:46and U.S. Bank.
00:48Going up.
00:51Welcome to a work from home edition of Entrepreneur Elevator Pitch.
00:54We have four amazing investors ready to dish out some money.
00:57This episode features all minority owned companies.
01:00Let's hear the first pitch.
01:01Your 60 seconds begins now.
01:06About five years ago, a friend asked for help.
01:09You see, she was using cannabis to treat her Parkinson's.
01:12But every time she made a batch of edibles, she'd have to test it on herself to see how
01:15strong it was.
01:16And unfortunately, sometimes it was too strong.
01:19My name is Peyjun, and we created this device.
01:22It's called Tea Check, and it measures the potency of cannabis flour and infusions like
01:27butter and coconut oil so that my friend and millions of people just like her can dose
01:31their edibles to get exactly the amount of cannabis that they need.
01:36Over the last three and a half years, we sold over 7,000 of these devices worldwide for
01:41about two and a half million dollars.
01:43We're here today to offer 25% of the company for three million dollars to scale marketing
01:49and sales, as well as production and engineering.
01:53I have lots more time.
01:59Five, four, three, two, one.
02:04Time's up.
02:05I have a few investments in this market, and I think it's interesting to see the revenues
02:11done.
02:12This is a challenged market for me just because of all the regulatory concerns, because I'm
02:17familiar with a few cannabis-adjacent companies, and the issue is banks.
02:24That is correct.
02:25Banking's difficult, but a lot of the credit unions now are opening up in legal states.
02:29The company does sound very interesting.
02:32It's definitely a product that people need.
02:34Okay, investors, does anybody want to hear more?
02:36And open the doors.
02:37I'm in.
02:38I'm in.
02:39I'm in.
02:40Let's open the doors.
02:42Number one, I thought the pitch was great.
02:53Love your passion, and what I'm just trying to understand is, based on the last three
02:57and a half years, the current revenue forecast for this year and what's forecasted for next
03:02year.
03:03So this year, we're going to close at about 1.1 million dollars.
03:06We're actually profitable.
03:08We reached profitability back in Q2, and this quarter's looking very good so far.
03:13P-Chen, great presentation.
03:15The thing that I'd really like to understand is how you're getting to that valuation and
03:19what your exit strategy is.
03:21Actually, the valuation came out of your book, Ross.
03:25We use a discounted cash flow model.
03:28So that's how we came up with a 9 million dollar pre-raise valuation.
03:31So what percentage of the million-plus that you have in revenue comes from the consumers
03:35versus those manufacturers?
03:38We believe it's about a 60-40 split.
03:41Still primarily consumers.
03:42Sounds like there's a lot of love in this boardroom, but I don't hear any offers.
03:46Anybody prepare to make an offer?
03:54Thanks for the great presentation today.
03:55I'm really interested.
03:57So I'd like to do half of your 3 million asks, so 1.5 million, for 12.5% of the company.
04:04But I'd like to have a board seat with that and see the rest of the round get filled.
04:08Okay.
04:09Ross has an offer on the table.
04:10Does anybody else want to make an offer and make a deal?
04:19I think, Ross, that the valuation is too high for me, so I'm out.
04:23I'm also out.
04:25Well, P-Chen, you have one offer on the table that's a little different than what your ask
04:29was.
04:30P-Chen, are you going to take that offer?
04:32Yes, I'll take your offer, yes.
04:37P-Chen.
04:38All right, man.
04:39Let's go do this.
04:40Really excited.
04:41I look forward to working with you, Ross.
04:44Likewise.
04:46How do you feel striking a deal with Ross for a million and a half dollars?
04:51Excited.
04:52Nervous.
04:53Very glad that we're able to put together a deal with Ross.
04:56I mean, I read his book, so it feels like I know a lot about him already.
05:02And this is about as good as I can possibly imagine.
05:05Moving on.
05:07Next pitch.
05:08Your 60 seconds begins now.
05:11Going up.
05:12Hi, I'm Marcus Howard, the CEO of Metarena.
05:15We now live in a post-COVID world.
05:17In today's society, brands must digitally engage and monetize their communities like
05:21never before.
05:23Metarena is a web app that lets communities engage virtually in a casually competitive
05:27environment.
05:29We offer a one-of-a-kind social experience where people play and watch awesome family-friendly
05:34games.
05:35With Metarena, businesses of all sizes can host an unlimited number of online esports
05:40tournaments.
05:42Our team has decades of experience in the business and gamer side of esports, and we've
05:47combined those insights into a unique platform that most businesses need in this post-COVID
05:52digital era.
05:53Brands like the University of Kentucky pay an annual subscription for Metarena, and we're
05:58on track to make $100,000 this year.
06:01We're raising $500,000 to scale Metarena, and we're wondering if either of you might
06:05be the right investor for us to bring into this deal.
06:11Time's up.
06:12No doubt, this area is booming.
06:14Looking forward to hearing what the investors think.
06:16Yeah, great pitch.
06:18The amateur esports market is definitely exploding, although I think I'm conflicted out of this
06:24one because I'm invested in the category leader.
06:27I'm going to have to pass on this one.
06:29I guess I have a lot of questions and would love to learn more just about the tech angle
06:33and what's needed to be able to build that.
06:36I thought that his ask was a little vague.
06:38I'm unsure as to whether he's raising on a convertible note.
06:42I'm assuming it's not a priced round.
06:45Definitely need to fill out some of those details.
06:47You know, I thought the pitch was okay.
06:48I found it a little bit confusing.
06:50I'm not quite sure what the business does.
06:52I think this is one of those examples where I'm more excited about the entrepreneur than
06:56the business itself.
06:57Okay, judges, anyone want to hear more and open those doors?
07:09Well, unfortunately, none of the investors looks like they want to play his game.
07:13Send them down.
07:16What was your thought by not telling the investors what percentage of the company they would
07:20get for a half a million dollars?
07:22Yeah, my team and I were working on this the last week and we had a version of the pitch
07:26that had the valuation in, but we felt like we were missing things about why we needed
07:31to do this now, why it's important that value adds to businesses.
07:35And in the process of revising it, saying, you know, the type of equity investment that
07:41we wanted or securities investment we wanted was chewing up too much time.
07:45So we took a calculated risk and apparently it was the wrong one.
07:52How would you say the community in Michigan has helped your business grow?
07:55Michigan is a fantastic place to grow.
07:58Having access to businesses, both large and small, has really helped us as a business
08:02move forward.
08:03To me, the advantage of doing business in Michigan is just the cost of living.
08:07Michigan people are great people.
08:12Let's go, investors.
08:14Next pitch.
08:15Your 60 seconds begins now.
08:18Growing up Afro-Latina, I didn't see myself represented.
08:22Now more than ever, it's crucial that children feel seen across all industries.
08:27Children's fashion is no different.
08:29Hi, I'm Sonia, founder of Mixed Up Clothing, a purpose-driven children's clothing line
08:34that sources fabric from around the world and turns them into fun outfits and now face
08:40masks that centers culture, educates and tells our stories.
08:45We have celebrities as fans and have appeared on the Today Show, The Real, Latina and NPR.
08:51We sell B2B, B2C and on Amazon.
08:54We're seeking $250K, which will go toward key hires, scaling and marketing.
08:59The multicultural community are super consumers, fast-growing and hold trillions in buying
09:05power.
09:06Open the doors if you agree that multicultural children matter and need to see themselves
09:11in fashion.
09:12Together, let's break down barriers to representation, one stitch at a time.
09:18Time's up.
09:19Wow, Sonia was smooth.
09:22Can't wait to hear the investor's reaction with this one.
09:24I think that was a masterclass in pitching.
09:27That was just a 10 out of 10.
09:29Great entrepreneur, loved the story.
09:31You guys know me, I like board seats.
09:33I like to add more than just money.
09:35I don't know if I'm the right person to be really helpful in her company.
09:38Sonia is fantastic and she's absolutely right.
09:42Representation matters and it's crucial.
09:43I'm just not sure how I feel about a children's clothing company.
09:47I thought it was a phenomenal pitch.
09:49She laid everything out beautifully.
09:50I agree.
09:51The pitch was excellent.
09:53I love purpose-driven companies and I have four kids, so I get it.
09:57Okay, judges, time to find out who wants to hear more.
10:08I'm in.
10:09Open the doors.
10:10Welcome to the ballroom.
10:11Hi.
10:12First, I want to say you did an incredible job pitching.
10:18I was really impressed.
10:2010 out of 10.
10:21I just want to hear a little bit more about your company.
10:24You said you're trying to raise $250,000.
10:27At what valuation is that at?
10:29Yeah, that's at $1.5 million.
10:31We are growing and right now at this moment where folks are really being intentional with
10:37their dollars, it is so important to be representing the diversity even in fashion.
10:44And how much revenue have you generated this year?
10:47This year alone has been $160,000.
10:50Great.
10:51I'm actually a critical care RN and so when I heard that there was a need for face masks
10:58to be for healthcare heroes and essential workers, I made the quick pivot to face masks.
11:05How did you come up with a valuation of $1.5 million?
11:08From our revenue and for predictions that we've had going into based on our month over
11:13month as well as going into our 2021 and 2022.
11:18And 2021 is expected to be close to $500,000.
11:23I historically have not invested in any retail, so this would be outside of my normal investments,
11:29but I do love your purpose-driven cause.
11:32I really think it's important.
11:34I do have four kids.
11:35I have four children as well.
11:36Well, Kim, does that mean you're going to prepare to make an offer or accept hers?
11:44Sonya, I'm not prepared to offer you what you requested, but I am prepared to offer
11:48you $250,000 at a million dollar valuation.
11:52Are you prepared to take that offer?
11:54Kim is counter and is willing to give you the $250,000, but at a valuation of $1 million.
12:01Do we have a deal?
12:06Absolutely.
12:07I think she's fantastic as a mom, as an entrepreneur, I can't have, or I couldn't have chosen somebody
12:15better to be in this journey with me.
12:18So, yes.
12:19Excellent.
12:20So excited.
12:21Awesome to see this deal get done.
12:22Congratulations, Sonya.
12:23Thank you so much.
12:26What are you most excited about to be able to work with Kim?
12:31Having someone who is a mom, who's an entrepreneur, who knows what she wants, I think having someone
12:38on my team and as a partner and as an investor will help get me to the next step in my journey.
12:44So, thank you so much.
12:47Time to move on to the next pitch.
12:49Your 60 seconds begins now.
12:52Hi, my name is Derekus, CEO of StorCash.
12:55There are over 85 million teens and adults in the U.S. that have no way to receive and
13:01instantly use funds directly from their phones because they don't have a bank account.
13:06I start this business because my nephew Will called me and asked me for money.
13:10So, I told him to download Venmo and I'll send it over to him.
13:14I later found out that not only did he need to be 18 years older, but he also needed a
13:19bank account in order to receive and use those funds.
13:22So, we built StorCash.
13:24It's the Venmo for the unbanked.
13:26It allows users to request and instantly use funds directly from their phones at over 200
13:32plus major retailers, no bank account needed.
13:35And then when they're ready, they can also be banked on the platform.
13:39We've generated over $370,000 and grown about 15% month over month.
13:47Five, four, three, two, one.
13:50We have a bow.
13:51Time's up.
13:52We need to raise a bow.
13:54Oh boy.
13:55Well, it looks like Derekus was not able to even get his ask out in the timeframe.
13:59It's going to be really interesting to hear what the investors do with this pitch.
14:03Oh, I'm so torn because he solves for an interesting problem that a lot of people face.
14:09I think it solves a real need in the marketplace and I love that he has revenue.
14:14Services and products for the unbanked is a major issue, but the pitch just didn't get
14:19me to a place where I feel comfortable understanding what we're talking about.
14:22I'm going to have to recuse myself from this one because I actually led their pre-seed round.
14:27So, I'm very familiar with the company.
14:29I definitely encourage all of you to vote him in.
14:32So, does anybody want to hear more and open the doors?
14:40I'm in.
14:41I'm in.
14:43Let's open the doors.
14:44Welcome to the boardroom.
14:46Awesome.
14:47Awesome.
14:48Okay.
14:49Cool.
14:50Yeah, I would love to hear the ask.
14:51I was impressed with what I heard, but you got cut off on the pitch.
14:53So, I would love to just hear the end of that.
14:55So, we have a $1.5 million round and now we're looking to close the remaining 500K.
15:01And what are the terms?
15:02Terms are at 8 mil valuation.
15:05Same terms as Marlon?
15:07No, the terms are not the same as mine, but in my opinion, it would be a good deal.
15:12My questions were how you plan to get more of the major retailers on board and what your customer acquisition strategy is.
15:19Yeah, so our customer acquisition strategy right now is a viral-like effect.
15:24And we do a dollar, you get a dollar, they get a dollar if you refer a friend.
15:28And that's been working out really, really well for us.
15:31We built out a system that can add on new retailers within five minutes.
15:36And there's about 7% to 15% that we get back from the retailers.
15:40And we make our money that way.
15:43This is the time. Is anybody prepared to make an offer?
15:52I think there's great strategic partnerships with Western Union, with MasterCard.
15:55The valuation, given where he's at right now, is just too high for me.
15:59You know, if I were to get involved, it would be offline and having further discussions.
16:04But in this moment, I'm out.
16:06Would have loved for him to talk about the growth that he's seen around consumers signing up on the platform.
16:13It actually is a steal.
16:14Can we get the data? I mean, maybe I make my wildcard, throw it back in.
16:18I mean, I like the idea. I just couldn't see the growth.
16:23Unfortunately, Derek Kiss, it doesn't look like there's a deal to be made today in the boardroom.
16:27How did you come up with the valuation of $8 million?
16:30I'm looking at the growth potential.
16:33And if we look at any app that hasn't even solved the unbanked issue in just a year and a half,
16:41the average valuation is over $20 to $30 million.
16:45I think later down the line, I think they'll see the value.
16:49That's the total right attitude. We all wish you the best and good luck.
16:53Awesome. Thanks.
16:55Elevator pitch, baby. Let's go.
16:57Coming up on the next Entrepreneur Elevator Pitch.
17:00Oh, yeah.
17:01That was definitely one of the most entertaining pitches we've seen in a while.
17:05Let's do a virtual high five.
17:06Absolutely. Yes, sir. Let's get it.
17:08And to apply for Season 7, go to entrepreneur.com slash elevator pitch.