Boho Camper Vans
Boho Camper Vans is a business from Tempe, AZ, started by two entrepreneurs who wanted to change the way people camp and travel by bringing to them some "freedom." Boho Camper Vans manufacturers, sells, or rents each of their campers, and they're nice ones.
Like any camper, Boho Camper Vans have beds, running water, the usual. But the Boho vans look like a tiny house with its wood panels and craftsman-like construction. They're also cleverly constructed and the entrepreneurs demonstrate how to set up an outdoor shower and how the camper can expand from the back. Supposedly, the idea for these little works of art came after a trip to Maui but then realized that no one really did that kind of thing in Arizona. One of the entrepreneurs contacted the other to build a prototype and the Boho Camper Vans as a business was born.
Since founding, Boho Camper Vans has sold twelve camper and maintains five within its rental fleet. One camper costs $20,000 to produce but the money is pretty evident. The camper that was brought in as a demonstration cost $15,000 to purchase, used, and another $29,000 to build out. The build out takes about three weeks of effort.
The cost to rent a camper is $200 per night with a three night minimum. One van can generate $2,000 per month and it pays back the original cost in just eight months.
Currently, Boho Camper Vans carries no debt. In the last eight months, they business saw $195,500 in net sales, and $493,000 in sales in the year to date. They project grossing $800,000 by the end of the year. Next year, the entrepreneurs project earning $1,900,000 in sales and project $1,000,000 in profit based on their margins.
Boho Camper Vans is in the tank looking for money to build out it's manufacturing plant so that more of the construction can be done from pre-fabricated parts.
Making A Deal
Guest shark Rohan Oza kicks things off by stating that he found the company's $3,000,000 valuation "sporty." Mark says that he thinks the product and business are great but that they're not a fit for him.
Kevin states that if he came into the deal, he sees no reason why he shouldn't be a third partner with an equal equity percentage to match. Rohan then asks if they can come back to him with "real" numbers. Essentially, he wants the entrepreneurs to devalue their business by offering him more equity. Finally, he offers the asked for $300,000 in exchange for 25% and the entrepreneurs can "take it or leave it."
Not wanting the entrepreneurs to make an offer without hearing hers first, she reminds them that she's still there. She also states that she thinks the vans are great and that people will love them. But before her deal can be made, Barbara cuts in with an offer. She says that they don't need a partner, they need cash. And since she believes in their project, she offers $150,000 in cash plush another $150,000 in credit in exchange for 10% equity. (This is essentially exactly what the entrepreneurs have asked for but half of it would be a revolving line of credit instead of cash.)
Naturally, Mr. Wonderful likes the idea of credit and he offers $300,000 as a loan at 9% interest over a two year period plus 7% equity in the business. (This offer is sharky from Kevin who, usually, settles for a thirty-six month loan term.) This doesn't appeal to the entrepreneurs, though, who pride themselves on being debt free.
Lori finally gets her offer in at $300,000 for 20% equity but also adds a contingency that says the offer is dependent on a charitable donation. This seems a little bit like extortion but the entrepreneurs are into it if Lori would drop down to 15%. But even if Lori is strong arming them for donations, she's not going to do that.
Barbara reminds the entrepreneurs that she's still there and says that no one can market like her while Rohan says the entrepreneurs shouldn't be too concerned with debt. The entrepreneurs try to nail Barbara down on what interest rate she would charge them for the line of credit but she evades or the show cuts it out. Either way, it's the most appealing to the entrepreneurs despite Barbara taking a 50% bite out of their value.