No Deal

Life Lift Systems

Life Lift Systems is a company from Oklahoma City, OK, that has created a quick and convenient way to find safety during a hurricane... hiding under the bed.

Well... not exactly. The tornado shelter that they have created is stored under the bed. It lifts the bed up and forms a storm shelter or panic room in about sixty seconds once activated. The founds claim that it can withstand an "EF5" category storm and even having a car being dropped on it. It even has a seat inside on which to rest while the storm rages outside.

The founders claim that the telescoping mechanism cannot be collapsed without mechanical assistance and that the shelter will remain even if the rest of the house is blown away. The entrepreneurs say that they are even working on versions that can double as a kitchen island or workbench. They claim that their competitive edge is that while most storm shelters must be built outside or, at best, in the garage, these shelters can live where people actually do.

The current (bed) version retails for $6,000 and can be had in the same sizes as a king or queen mattress. Thus far, in the previous three months, they have sold 119 shelters though not all of them have been installed yet. They claim it takes four hours to install. (No word on the mess it makes.) They have had $550,000 in sales over that same period.

However, while the company currently installs the shelters, their goal is to sell the shelters wholesale and have contractors install it. Under this model, they believe they can manufacture the shelters for $3,600 and wholesales them for $4,800 while the contractor resales them for up to $9,000. The entrepreneurs claim to already have two wholesalers selling their shelter in Oklahoma. Under this model, they believe that they will be able to sell 1,500 shelters a year.

In terms of capital investment, the entrepreneurs have invested $250,000 of their own money to get things off the ground.

Making a Deal

Mr. Wonderful kicked things off by saying that he thinks their price estimate is too low once installation by the wholesalers is taken into account. Robert said he was out because the deal just wasn't for him. Kevin, likewise said he was out despite liking the idea.

Guest shark Charles Barkley said he was out because he didn't think he could get his money back.

Mark stopped the train of negativity by offering them their requested $550,000 but for 25% instead of 15%, saying that he would also finance all purchase orders and introduce the entrepreneurs to home builders so that it would come as a feature for new home buyers. Lori also offers the entrepreneurs 25% and Mark counters her offer by saying that he offers the State of Texas as part of the bargain (your Stats Shark knows what that means but it does sound awfully imperial) as well as proximity.

When the entrepreneurs test to see whether either will drop their equity ask to 20%, both Mark and Lori decline. When asked if they'll go into the deal together, Mark and Lori agree to 20% equity with a $100 per unit royalty which proves to be too much for the entrepreneurs. They settle on Mark, his 25% equity and and a whopping $1,466,667 bite off their valuation.

This deal appeared in Episode 10.13.

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This page was last edited on 25 October 2019, at 09:24.