Golfkicks is a company founded by entrepreneurs who found regular golf shoes very uncomfortable so they invented a way to turn just about any kind of ordinary shoe into golf shoes. Golfkicks the product is essentially a set of anchors that can be sunk into the soles of any shoes that will then hold cleets that can be screwed in when needed.
In order to install Golfkicks onto your shoes, one needs to drill a 1/3rd inch pilot hole where the cleets go. But, worry not about whether people will do this to their shoes, there is a "cool factor" involved in showing up to the tee with a pair of these and Golfkicks has already sold out of their first iteration of the product. When questioned about course dress codes and whether someone showing up with a pair of Golfkicks might violate one, one of the entrepreneurs pooh-poohs the idea, stating that golfing is much less restrictive than it used to be.
The product is just three months old and has only been sold on the website though the entrepreneur admits he has been looking at getting it listed on Amazon with with a big box golf retailer. However, within that time, Golfkicks has made $120,000 in sales and projects earning $1,000,000 by the end of the year. And, thus far, the product has not been knocked off, so... bully for them! Also, it has a provisional utility patent because... of course...
A Golfkicks kit costs $29 per unit at retail but just $5 per unit to manufacture.
A future version of the product is planned that can "take a pivot" and the entrepreneurs think they can expand into the kids market. Version two will also feature metal screws.
Making A Deal
Daymond wonders aloud why people even play golf and Mark backs him up on this. But Lori says she finds it calming. However, Daymond admits he's just not passionate about it and doesn't relate the business so... out. guest shark Matt Higgins admits that he's right there with Daymond, having maybe played golf twice.
Kevin being Kevin takes issue with the $3,750,000 valuation when Golfkicks has only seen $120,000 in total sales. But the entrepreneurs go ahead and break the First Rule of Shark Tank, stating that the golf market is worth $8 billion dollars. But Kevin thinks their value hasn't left much room for discussion and is out.
Mark wants to know what the entrepreneurs think they need and they say they're looking for an advisor.
Lori says that even though they don't have a final version of their product, she's willing to make them an offer: $300,000 in debt at 8% interest plus a $1/unit royalty until $300,000 has been repaid. If this deal seems a little sharky, Lori justifies it by saying it's because she's mitigating her own risk.
Mark comes back saying that he thinks a profit distribution is better than a royalty when they have such a high margin.
For some reason, Lori actually increases her royalty ask from $1 per unit to $2, even though it begins to sound like Mark might be getting ready to make an offer. But, to go along with this ask, she does state that she feels they should skip the retail market since they can make more money selling direct to consumer.
Mark finally drops his offer of $300,000 for 15% equity onto the table but specifically states that he wants to see them expand into kids sports. The entrepreneurs try to get Mark down to 12% but, when he counters at 13%, everyone seems happy and the company had a cool almost $1,500,000 bit off it's value.
- Lori seems impressed and admits that she's a golfer.