Transcription
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First in the tank is a way to be comfortable and still look professional.
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Hi sharks, I'm Justin Baer from Bethesda, Maryland, and today I'm seeking $300,000 for four percent of my innovative apparel company, Collarsenko. Four percent, sharks. Welcome to business casual 101. Let's begin.
So, you know this look? We're wearing a dress shirt under a sweater. It's pretty much the go-to look for every single guy that works in an office around the world. I lived in New York for 12 years. This is what's called the Midtown uniform. Problem is, I hated wearing a long-sleeve dress shirt under a sweater. It was always hot and uncomfortable and scratchy. I don't even have to spend the time buttoning up my shirt in the morning. And then sometimes, you would also get what's called floppy collar, where the collar just flops down halfway through the day. But worst of all was putting on a dress shirt under a sweater. It is so annoying. The sleeves always get bunched up. My sleeves like right up there by my elbow.
Sharks, I knew there had to be a better way, which is why I invented the dress collar polo. It's a stretchy, comfortable golf shirt, except the top has a firm collar on it. So it gives you that exact same look of a dress shirt, but it's really just a comfortable polo. Sharks, guys are wearing this with a tie, under a blazer, with a sweater, and even for just a slightly more elevated casual look with a polo. Sharks, we are helping guys look stylish and stay comfortable, and we've created a new category of shirt. Help me create the next great worldwide brand. Thank you.
In front of you, we actually have four different collar styles. It's a nice stretchy material. Yeah, it's stretchy, totally breathable. Quite an interesting idea. Did you say four percent? Four percent? Yeah, four percent. Okay. So, sales so far? We started last year. We've sold so far $92,000 shirts for $5.4 million. Whoa. Wow. All direct to consumer, all online. What was your profit margin on that? Twenty percent net. Tell us. Wow, that's impressive. Yeah, so this is a really, really well-made product. Thank you.
Um, but there's two things I hate. I hate with all my heart this look. I've always hated that Midtown look, and it's just not my style. I really hate that look. Another thing is I hate offers at four percent for $300,000. I'm out. That answers that.
All right, we've had other shirt companies on Shark Tank. However, of all the ones in 14 years, you've had the fastest growth to $5 million. I always consider that a hurdle, getting to five. That's a real business. Yeah, so you must have some execution skills in this story that others don't have. You're right, Kevin. The secret is in our marketing. It's in our funnel. We've mastered the funnel. I've been doing this for 20 years. Doing one for 20 years. Business internet marketing. I had a business in one of the first check-in applications for events.
Let me jump in. I mean, while these are super nice, I think what you're doing is fantastic. I don't think it's the right investment for me. So I wish you good luck, and I will purchase those gifts, but I'm out. Thank you. Thank you.
Justin, I'm quite shocked because I'm I'm in this business. I own a company called Localized, and we basically take big brands global all over the world. This type of product specifically across Asia. Yeah, we're seeing growth, but we're not seeing it at a stage that you've just taken this business to. What does it cost to make? Cost to make landed, $15. We sell it anywhere from $65 to $75. Okay. I've never bid a shirt deal because I said, oh, shirts are such a total commodity. But you have numbers to justify. First time in 14 years, I'm going to make an offer to a shirt deal.
I look at it and say, $300,000, four percent doesn't even get me out of bed to put a shirt on in the first place. No, I'll do it for ten percent. That way, Kevin, you're decisive. If it was, if this was an old-line private equity deal, old slow growth cash flow. This is a fat, one of the fastest-growing DTC brands in the country. We're going at 28% a month. Yeah. All the more reason I'm making the offer. Do you have other? Justin, Justin, I have no other. Justin, yeah, you've completely dismissed an offer that I thought was pretty good. No way. What sort of equity are you talking about then? You came in with $300,000 for four percent. You've dismissed it as if Mr. Wonderful wasn't even in the room. That's at ten percent. I pushed it for seven and a half million. It's not worth seven and a half million. It's worth twenty. Because this thing, what is your free cash flow? What is it? Twenty. We made a million dollars. What do you need? Inventory, marketing, and we need to build a team. If we're going to go to $50 million, we need to have some key players in place. How are you going to get the money for inventory? So are you looking to raise or are you looking to? I need a line of credit. Awesome. Okay. But the other thing that I'm looking for is a mentor and somebody to help me grow this thing, really, to the next level. This is, you know what? I'll mentor you. I'll mentor you. Take the ten offer.
The next, the next great brand. I don't know whether you know this market as well as I do. This is beyond brutal. And the reason why this is so brutal is because fashion shifts and moves at a literally rapid rate. And you are up here at the moment, and you think you've got the dream ticket coming into Shark Tank. The reality is, in six to 12 months, this could go out of fashion. Here's a reality. Peter, I don't think it's going out of fashion. Peter, Peter, it is a reality. Here's a reality. We're going into a recession. People aren't buying shirts when they can't pay their mortgage. Correct. Right. Then he starts bringing in more. He has a lot of skills. He starts bringing in more. You know, some things don't get sold. He doesn't have a second door like Burlington or any place to get rid of this. And now his inventory starts to chew into his profits. And then he realizes, oh, wait a minute. I don't know as much as I thought. Right. And of course, styles that, when I got into business, when I got married, Levi was doing $18 billion. They're doing four now. Everything goes out.
Justin, Justin, I'm about to give you an offer. Listen, you need to cut out cost. I have that infrastructure, and I could take this product and sell it all over the world. So I'm going to make you an offer. I've got my offer is also at ten percent for $300,000. He's out.
Justin, so look, $300,000 is obviously not enough. So you already have in mind where you're going to go get your additional capital? I mean, we need, we need probably a $700,000 line of credit. All right. That's easy. So if I went in with Peter, so Peter, so if you had a global domestic, and I don't mind putting up, and I'm sure Peter went either, um, a line of credit at eight, nine, whatever the interest rate should be. Eight, nine credit. We have assets, hard assets. I know you guys give out line of credits to like apps and stuff. There's nothing tangible. When he said me and Peter together, which they both have huge backgrounds in time here. No, everything they say to you is like, well, you're evaluating, you haven't really seen it. You get a chance. No, we're seeing that, and we're seeing that there's gonna be ten more people through the door in another minute. What's your offer?
So Justin, I'll include the $700,000 line of credit, but $300,000 cash. What is the equity you're willing to offer us?
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Too much. I'm out.
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Yeah, you're not valid. I know the value of this business, and you've done really well to get a ten offer. So you're saying it's worth point five? No, the increment. If we're gonna do ten percent, we're gonna do ten million in sales this year. The thing is, Justin, the problem is, listen, this is why it's not gonna work. You've got to have, you have two ears for a reason, right? And I don't think you're listening. And that's not good. That's not a good sign for an entrepreneur. No, no, you do have to listen. You can dismiss it, and you can walk out of here. That's absolutely fine. But we should be allowed to voice our opinion, and you're not allowing me to voice mine because you keep talking over me. No, I hear you, which lets me know that you're not listening. You have everything right now in the palm of your hands, and for six percent, that's all that we're talking about. Six percent. Have you, have no idea what the scale of the opportunity is and what we're going to add and the value to that. You're discounting it. I know I'm not discounting what you guys bring, and that's why I'm here. But we're gonna do ten million in sales. The two of them, you could actually be doing eighty million. So you're talking to guys who've been in the business 30 years. We see deals like this all day long. Either one of us don't do this deal. Our lives are not going to change. We're still going to be rich. Justin, you're asking us to go to work for you. There is no amount you could pay to hire the two of us to mentor you and help you globally. I couldn't even hire him. If your value in your company at twenty million and ten, you're going to give you a discount to three? I'm out too.
Justin.
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Would you do it for seven? No.
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I think we're all out. Right. We're all out. Seven percent. We're out. Justin, I hate to say it, but I've got a feeling that one day you're going to regret this moment.
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He still has a chance to say yes. So here it is. $300,000 in equity for ten percent. I'll put up a line of credit of $700,000. We'll do a market rate interest rate, but it's first dollar in, meaning I get paid the minute you get paid by your customer. And you're in it, and I'm in it. Yes or no? Let's do it. Wow. It's gonna be the best deal you've ever done. Congrats, man. I've probably done an amazing deal. Well done for not walking away. I knew the other reason I didn't like guys that wore this shirt, but congratulations. No, congratulations. I'm glad you're able to start listening. Thank you so much. This was great. He reminded me of me, I'm not gonna lie, because when you're young, you don't know what you don't know. I did a lot more talking than listening. It's going to be interesting to see how he works with us though. You'll find out. Yeah, it means a ton that Mark Cuban and Peter Jones are mentors now. I mean, having them in my corner is just going to kind of free me up to to think bigger than I ever thought before. And, uh, hopefully one day I'll be sitting next to them in one of the shark chairs.
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