How To Get $1 Million From Mark Cuban
Many people dream of being their own boss, but starting a successful business isn't easy. Eight out of ten businesses fail in the first 18 months. Even with a proven concept, it can be hard to find investors to back your product. An Austin boxed wine company is hoping to defy the odds with a one million dollar investment from Dallas Mavericks owner Mark Cuban.
ABC's reality show Shark Tank puts small business owners and inventors in front of a panel of venture capitalists ready to invest in profitable companies. The show's producers hosted a casting for UT alumni last March. After a long audition process they chose their best of the best.
Was it a high tech device? A life changing app? No. It was wine in a box.
After a bidding war and a tense negotiation, Dallas Maverick's owner Mark Cuban offered BeatBox one million dollars for a 33 percent stake - valuing the Austin-based company at 3 million dollars.
Getting A Shark To Bite
Beatbox founders Justin Fenchel and Brad Schultz say it took a lot of hard work to get to that pivotal point.
"We were eating, sleeping, breathing, dreaming Shark Tank for about 3 months, watching every episode multiple times," says Fenchel, "We were stalking the Sharks online, figuring out what they've invested in and why, articles that they've had in business journals and things that they've said so we can relate to them."
Schultz says they even added some role play into the mix. "We had friends kind of sit around a table and pretend to be different Sharks and like act as their personalities so could deal with and interact with them."
Fenchel says the key to piquing Mark Cuban's interest was telling him that Franzia, the best-known boxed wine company, has one billion dollars in sales every year.
An Untapped Market
Jane Firstenfeld, an editor for Wines & Vines magazine, says there's a lot of money to be made in boxed wine, "It's not necessarily that the wines themselves are cheaper, it's that the packing and the shipping is cheaper."
But Franzia has dominated the boxed wine market for the last 14 years, BeatBox wants to take a bite out of those profits with an aggressive social media strategy.
Fenchel says he wants to make BeatBox the next Red Bull. "That's really the model we want to take on," says Fenchel, "which is they created a product, this energy drink in a can and then built an entire lifestyle around it whether it's the formula 1 cars they have or people jumping out of airplanes at music festivals, they've created this high energy octane lifestyle brand."
As far as social media goes, their strategy seems to be working. Franzia currently has 189 Twitter followers. After Shark Tank, BeatBox has over 4,000.