Tailgate N Go
Tailgate N Go is a family company from Grand Junction, CO, that created a product to solve the problems they always had while camping or tailgating, namely, packing for a trip and inevitably forgetting something, even something as small as say... a spatula. Tailgate N Go solves this problem by having created a portable outdoor kitchen and dry box made specifically for camping, fishing, or tailgating adventures.
The Tailgate N Go box features a series of interchangeable modules that can be placed anywhere along the outside of the box when unpacked but stored inside the box for transport. These modules can include a range, a grill, and even a sink.
Pitched by a father, his daughter and his son, they described having three models. The first is the full-size kit that sells for $1,500, the second is the "medium" "Overlander" model selling for $1,400, and the third is a smaller kit that goes for $1,000. These cost $748, $728, and $500 respectively to manufacture in Colorado. Each weighs between 55 and 75 pounds and can cost between $120 and $150 to ship.
Thus far, they've sold 100 boxes though they said that in the last six months they have tripled their sales. The Tailgate N Go product kits carry with them two utility patent on the interchangeable elements system. The hope is that this will limit competitors.[1]
In terms of investment, the only money that has been put into Tailgate N Go has been the $250,000 the entrepreneurial father invested into the company of his own.
When asked what they need the money for, the daughter explains that they need it to scale their manufacturing and to bring to cost down. For instance, guest shark Matt Higgins questions whether the low-end model might not be made out of plastic. The father responds that the low-end model could potentially have its cost lowered to $300 to manufacture should they convert it to plastic.
Making a Deal
Mark salutes the entrepreneurs for finding a problem, coming up with a solution and then turning that solution into a business. But, unfortunately, he doesn't "glamp" and therefore the deal isn't for him and he exits. Lori, likewise says she doesn't know anything about tailgating and prefers to know more about the business landscape before investing and is also out.
Kevin wasn't so much Mr. Wonderful when he said that the proof is in the pudding and that, if it was going to be successful, then more people would have bought it already. He also sees it as a cash hungry business because of their need for inventory. Somewhat surprisingly then, he offers them a deal saying that what they really need is credit. He offers $250,000 as a loan at 10% (and presumably his usual 36-month period) with a $100 per unit royalty in perpetuity.
Guest shark Matt Higgins says that he knows the market that the entrepreneurs are trying to pursue and that they're rabid about their own setups. He also says that he doesn't think the market is big enough and exits the deal.
Daymond says that the family suffers from the gift-slash-curse of starting their own business. They are so avid about the rightness and the need for their product (as they should be) that they're going to burn a lot of capital trying to prove it on the market. And, with that, Daymond was out.
Matt says the entrepreneurs should have proved out the idea a little bit more before coming into the tank.
With only Kevin's offer left on the table, the entrepreneurs decline and it looks like everything is over until Daymond points out that they can always counter. So they do. They counter Matt at $250,000 for 15% equity in their business but he responds that he doesn't know how he'll get his money back.
Kevin begins to pressure the family into taking his deal saying that he could "take the product to the moon" through social media. When Matt questions whether he's being serious, Kevin responds that "They'll be setting it up on the dark side of the Moon" when he's done his thing.
Kevin revises his offer to a $250,000 loan at 10% interest plus 10% equity and a $50 per unit royalty.
Matt jumps back in on the deal, offering $250,000 for 20% equity and a $50 per unit royalty until he's earned back his initial investment and the entrepreneurs jump on it.
Even though this bites the value of the company in half by $1,250,000, considering that they've only sold 100 boxes prior to appearing on the tank, and at the risk of sounding like Mr. Wonderful, a $2,500,000 was a bit much to ask. Even assuming all 100 boxes had been the most expensive model, that's still only about $150,000 in gross sales. But they did land a shark and one that has a lot of expertise in the tailgating market!
Updates
In episode 11.19, Shark Tank aired an update featuring Tailgate N Go and what has happened to them in the "three months" since they made a deal. The entrepreneurs stated that they had previously been in business for two years and made $137,000 in sales. In the three months since making their deal with Matt Higgins, they stated that they had made $400,000. Additionally, Matt helped them gain an NFL license so they could brand their product with team logos and then got them a place at the NFL Experience 2020 convention, a showcase of NFL partners and their production.
Aside from the two-year versus eighteen month claim, there seems little to quibble with as far as this update and, in fact, it seems extraordinary that they've seen so many sales since! While part of that is now doubt due to the Shark Tank bump effect, getting their product out there into more places and licensing team logos also surely played a part. Hopefully we will get another update next season.
Notes
- ↑ While searching for the specific patent related to this product, your Stats Shark ran across these when searching "Camping Kitchen" which leaves him wondering (a) whether the US Patent system isn't just thoroughly broken and (b) what their patent specified that provided a differentiation.