No Deal


Mosquitos are a problem, everyone knows this. But one company out of Lexington, KY, has come up with a novel solution for fighting them... Bats!

BatBnB is a company that has designed a light of bat "houses" that encourages bats to make a home so that they can feed on pests. They even bring in a live bat as part of their demonstration.

Mr. Wonderful asks whether their homes would be encouraging vampire bats but the entrepreneurs assure him that those types of bats only reside in Central and South America.

The entrepreneurs say that when they went looking for a solution to mosquitos and the diseases they carry, such as Zika and West Nile, all they saw were pesticides and they wanted to find a more natural solution. Hence the bats!

Since launching eleven months ago, BatBnB has earned $135,000 in sales. They predict ending the year with $145,000 in sales. Each bat house costs $88.50 to produce and retails for $239 with shipping included.

The entrepreneurs say that, moving forward, they intend to direct their sales and marketing more toward the public sector such as cities and counties to have them installed and believe that they could earn up to $1,000,000 per year through this strategy.

Making A Deal

The deal is made pretty quickly for BatBnB.

Mark states right away that he doesn't think there's that much interest in bat houses and drops out. Robert, likewise, thinks it's a niche product and is out also. Daymond says that he actually has bats on his property and hasn't seen any reduction in mosquitos and, because he hasn't seen it be effective, exits the deal. Lori states that she's just creeped out by bats.

Kevin, then, is the last shark left in the deal and states that he believes the market for bat houses is pretty small and would need a fair amount of education in order to find new buyers. But, despite these issues, he still offers $100,000 in exchange for 33.3$ equity in the company.

The entrepreneurs try to counter Kevin at 25% but Kevin says that, in order for him to be involved, he needs to be a full partner. When the entrepreneurs ask if Kevin is willing to wear the Batman suit, he agrees and a deal is made.

Considering that the entrepreneurs were originally offering 16% equity in their business and Kevin took more than double that, the bite was going to be severe. But one imagines that, with Kevin as a partner, they should be more than able to recover the $324,700 in company value they lost as part of making the deal.

Scroll chart to see it all!

Scroll chart to see it all!

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This page was last edited on 10 February 2020, at 08:58.