Pearachute is a company from Chicago, IL, that is attempting to stop pre-paid children's activities from going to waste.
The problem with most pre-paid children's activities, according to the entrepreneur, is the lack of flexibility in terms of attendance and cancellation. What happens if an emergency happens? Your child is sick? Or the kid just doesn't like whatever it is? Money down the drain.
No more, with Pearachute. Pearachute offers a flexible way to schedule activities and classes for children. Parents can purchase a monthly five-pack of activities for $79 or an unlimited number for $99. With this subscription, parents can chose from among Pearachute's thirty current activity partners on an online platform and schedule things for their children. Should something come up, parents can cancel within one hour of the activity with no penalty.
The service launched 126 days before the entrepreneur's appearance in the tank. In that time, the service has made $50,000, $20,000 in the last four weeks. Currently has thirty partners in and around Chicago only.
The entrepreneur had previous founded the company Gift Forward but turned it over to the CEO when competitors passed the company by.
This deal aired on Episode 9.07.
Making A Deal
Mark loved the idea but not the amount of equity. Rather than just the 6% on offer, he wanted 15% instead and the entrepreneur accepted. This amounted to a bite of $5,000,000 off the value the entrepreneur came into the tank with.
The Stats Shark doesn't generally like these types of companies for two reasons. Firstly, the Stats Shark thinks kids are over scheduled today anyway. Wasting money scheduling classes and activities for your children? Maybe stop buying classes and activities and just let them... play?
Secondly, and more pertinent to the purpose of this site, these types of businesses require the entrepreneur to create both sides of the market. They must partner with enough service providers to bring users and bring enough users to make it worth the provider's time. Without the right balance, both abandon the service. It's a hard balance to achieve and the Stats Shark doesn't really see where Mark's involvement will help with this at all. While an $8,000,000 valuation was overkill, it's a difficult to see where the $5,000,000 in value from the bite might be recouped.