Mark Cuban and Kevin Hart Team Up With 'The Players Trunk' | Shark Tank US | Shark Tank Global

Summary

In this Shark Tank pitch, Hunter and his partners, Jason, Austin, and Charles, present their company, The Player Trunk, a platform for athletes to monetize their brand by selling team-issued and vintage gear. They seek $650,000 for 5% equity, citing $1.3 million in sales within their first year. The founders emphasize their deep understanding of the market and their strong relationships with athletes. Despite the high valuation, the Sharks express skepticism, with Mark Cuban and Kevin Hart ultimately offering a deal for 30% equity. The founders stand firm on their valuation, resulting in a tense but insightful negotiation.

Takeaways

• 😀 The company seeks $650,000 in exchange for 5% equity, with a $13 million valuation.
• 😀 The founders are former D1 college basketball players who faced challenges with athletes not being able to monetize their brand.
• 😀 Their platform, Player Trunk, helps college athletes monetize their brand by selling player-owned team-issued gear and other merchandise.
• 😀 In the first 12 months, they signed up over 800 athletes to the platform, and within the first 2 months of the NIL (Name, Image, and Likeness) rule, they signed several athletes.
• 😀 The company has licensing deals with 13 prestigious universities, giving them exclusive access to certain college merchandise.
• 😀 They earn 20% of vintage merchandise sales and 40% from custom merchandise like t-shirts and hoodies.
• 😀 Their primary customer acquisition method is leveraging athletes’ social media followings to promote their merchandise.
• 😀 They’ve made $1.3 million in sales, with a profit of $200,000, while operating out of their college dorm room.
• 😀 The valuation of the company is questioned, as their sales don't align with the $13 million valuation.
• 😀 Mark Cuban and Kevin Hart make an offer of $650,000 for 30% of the company, emphasizing the value of their influence and credibility.
• 😀 The founders stand firm on their valuation, rejecting the offer and offering a counter of $50,000 for 75% of the company, but ultimately are unwilling to accept any offers below their desired terms.

Q & A

What is the main business idea presented by the founders?

The founders are offering a platform called 'Player Trunk' that allows current and former collegiate athletes to monetize their brand by selling team-issued gear, memorabilia, and customized merchandise after they leave their college programs.

How do athletes benefit from Player Trunk?

Athletes benefit by being able to sell their own team-issued gear and custom merchandise, including jerseys, t-shirts, hoodies, and phone cases. They can also sell their vintage items once they graduate or finish their eligibility.

What is the main challenge the founders faced before creating Player Trunk?

The founders were frustrated by the fact that athletes, including Charles, had their jerseys sold without receiving any of the profits, which led them to create a solution to help athletes monetize their personal brand.

How does Player Trunk differentiate itself from competitors in the NIL space?

Player Trunk sets itself apart by focusing on building strong relationships with athletes and universities. They have licensing agreements with 13 prestigious universities, and their platform allows athletes to sell both current and vintage merchandise.

What is the business model in terms of revenue split between the platform and athletes?

Player Trunk keeps 20% of the sales from vintage gear sold by athletes once they leave college, and 40% of the sales from custom merchandise such as t-shirts, hoodies, and phone cases.

What are the sales figures for Player Trunk so far?

In the first 12 months of business, Player Trunk made $1.3 million in sales, and the company generated $200,000 in profit.

What does the company ask from the investors during the pitch?

The company is seeking $650,000 in exchange for 5% equity, which values the company at $13 million.

Why do the investors find the valuation of $13 million to be problematic?

The investors believe the $13 million valuation is too high given the company's sales of $1.3 million and the competition in the space. They think the valuation should be closer to $4 million based on a 20x multiple of sales.

What alternative deal does Mark Cuban propose?

Mark Cuban offers to invest for 30% equity in the company in exchange for $650,000, emphasizing the value that his star power and connections can bring to the business.

How do the founders respond to the offers from the investors?

The founders reject the offers, particularly Mark Cuban's, because they feel that accepting such a deal would undervalue their company and their vision. They express a preference for maintaining more control and value over their company.