Notehall is a company that provides an online marketplace for college class notes. This is a typical example of the Two Market Problem but one that these entrepreneurs appear to have solved since people can buy and sell notes and study guides through this service.
Notehall was started while the entrepreneurs were students at the University of Arizona. Initially, Notehall focused on the University of Arizona and Kansas State but plans to roll out the service for twenty-four more colleges in the near future.
Note buyers through Notehall can preview the first thirty percent of the notes to make sure they're good before buying. Which is good because the visitors to the site breakdown about 60% note buyers versus 40% note takers.
The average cost of notes or study guides is about $4. In the last eight months, Notehall has made $30,000 in sales. But they have big plans and project earning $24,000,000 in about four years.
During the course of the deal negotiations, our own Kevin O'Leary tried to get real sharky and demand too much equity from the entrepreneurs and they flat called him out on it for the first time in Shark Tank history. In some ways, your Stats Shark views this as a turning point in the show where it became overall less predatory and more of a genuine investment show.
In the end, the entrepreneurs partner with Barbara Corcoran who still got a whopping 25% equity share in the business and bit over 50% of the value off the company. However, he deal includes the option to buy back 20% of the equity given to her within the next six months.
So... maybe that's worth it!