Liddup Before Shark Tank
Jason Sandberg and Taylor Gwizadon, the founders and proud owners of the Liddup corporation, have just stepped into the Shark Tank. They are seeking an investment of $100,000 in exchange for a 10% equity stake in their company. The two of them are excited to finally introduce the Liddup cooler, which is a spin on a common household item. The Liddup cooler is the first and only cooler with built-in LED lighting, which will enhance your ability to find items while having late-night cookouts.
Liddup on Shark Tank
The idea of putting LEDs inside a gigantic cooler is not rocket science, Jason explains; he came up with the idea when he was at a family cookout, was thirsty and four hot dogs deep, so he went to his cooler and began to slosh around. Anyone who has been to a cookout knows just how bad the icy slush can be when it comes to finding a drink, and in Jason’s experience, he was stuck digging around a dark cooler in search of an ice cold beer. When he finally found a can, it was a soda, disappointingly enough – not what he was looking for. So, Jason began to search for a cooler with lights in it and he quickly realized that there were none.
With the help of Taylor, Jason built the first prototypes of the Liddup and now they are ready to not pitch the Liddup to just the Sharks, but to the world. Taylor pulls out a six-pack of beer and hands one out to each Shark after Daymond mocks them and calls them selfish for not sharing with the rest. After Jason passes out a beer to each Shark, Kevin asks the first question; since Daymond called them greedy, the $1 million dollar evaluation started Kevin thinking. Kevin demands the two of them to defend their valuation before he drinks their beers.
Jason explains, Liddup is a very new and exciting product in an industry that grosses more than $5 million annually. The two of them feel that their product is worth enough intellectually to compensate for the other $500,000, giving Liddup an even $1 million evaluation. Robert asks why the two of them feel that they are worth a half million, and even Daymond mentions that “all those words mean … you don’t have any sales.” Robert asks where the two of them started, and Taylor jokes that they had to start somewhere, so they started their evaluation at $1 million.
Kevin steps in and asks if the pair behind Liddup has shown the product to any of the big-box retailers yet. Jason replies that the two of them have waited to show anybody their product so as to protect the intellectual property. Mark asks what the intellectual property might be, and even Lori agrees since the idea sounds ridiculous – however, Jason reveals that they have three patents for the Liddup. One patent is for the interior LED lighting, which means nobody can put any LED anywhere facing inside the cooler except for Jason and Taylor.
Robert, however, says that he has some bad news – there are only a few manufacturers in the cooler market, a total of three, Kevin explains, which means that they are at a zero-sum game, as Mark explains. The two of them will need to spend an obscene amount of money in order to get their product on the shelves of big-box retailers, where it will realistically grant them the highest margins. Shipping the Liddup would be a very, very expensive cost and eat away a large chunk of their profit.
Daymond then asks if the two of them have approached any of the retailers, but Jason explains that they have not since, like he mentioned earlier, they wanted to protect the intellectual property of the Liddup while waiting for their last few patents to clear through. Kevin speaks up again, mentioning his own feelings that the two of them would be wise to go and patent off the technology; if the two men behind the interior LED lighting patent could make a few dollars off every unit, then they can easily make themselves millions on the beach.
Lori then brings up an interesting point – why would they need the Sharks, then? All roads lead to Mr. Wonderful, Kevin excitedly explains, and he is the one who could easily get them a licensing deal. Daymond then plays the dealer and sums up the deal – $1 million for 10% – and says that when he sees numbers like that, he must be out of the deal. Such a small percentage in the company does not excite him, and he does not have any passion in attempting to work out a deal for licensing a cooler, so he exits quickly.
Lori thinks the idea is interesting, but she is not an expert in how big the industry is or how she could even bring the idea to penetrate the market and force a sudden change of all coolers having built-in LED lights. However, the one thing that bothers Lori the most is that anybody could simply put a tap light in their water cooler, and simply tap the light whenever they need to open the cooler and access the inside contents. Lori is also out of the deal, leaving three Sharks left.
Robert brings up that he has some good news; one of his better friends is someone who specializes in tents and accessories for tents, so he has knowledge of the markets and has even done deals with Robert. Robert could easily set up a deal with the largest manufacturers water coolers in the world. So, he extends an offer to the two men – his offer is $100,000 in exchange for 25% of the company, valuing the company at $400,000 – a sharp cut of more than 60% of their original asking price.
Mark takes the opportunity to step in and plead with them to take the deal – he appreciated the beer, but he is out of the deal and the two of them would be fools to continue past this point. Kevin, in his chaotic ways, mentions that the problem with Robert’s deal is the single potential lies within Robert’s friend. Should that deal fall through with Robert’s friend, Liddup will be dead in the water. The two of them want to create the potential of the market through the illusion of a second bidder or even a real bidder, which would drive up the worth of Liddup. Kevin takes a moment to smugly mention that he brings the knowledge, and through knowledge, value.
However, Robert disagrees – the way to create maximum value is to put pressure on the first guy so that they do not simply walk out across the street and find another company. Kevin then extends an unheard-of offer in the Shark Tank; Kevin proposes the asked-for $100,000 in exchange for ⅓ of whatever they receive from licensing to a cooler manufacturer. Kevin will be there negotiating for them, “hockey-sticking and soccer-balling and race-driving” it.
Robert feels that Kevin is blowing smoke and is just negotiating, and he would rather err on the side of caution – his friend has been in business for 20 years, and his friend would be honest on if the deal is good or not for the two men of Liddup. Kevin is just aggressively negotiating and trying to grab the company from Robert. The two men take a moment to silently mull over their options before asking to step out and discuss the deal amongst themselves.
Robert then steps in and says that if they find that offer attractive in the slightest, then there is no need for them to step outside, as he exits the offer. This leaves Kevin as the sole Shark left, which forces Jason and Taylor to accept the deal with Kevin. Kevin says that he is so excited about his partnership that he will drink a beer in their honor.
Robert looks a little bit distraught as Jason and Taylor saunter out of the Shark Tank, excited about their new partnership and the future possibilities of partnering with Mr. Wonderful.
Liddup Now in 2018 – The After Shark Tank Update
True to Kevin’s word, he was indeed able to get them a meeting with the world’s leading cooler manufacturer. Kevin was able to secure a meeting with the Igloo Products Corp, who are a very, very famous producer of coolers all across the world. Now, products that incorporate the LED lighting patented technology from the Liddup are available at a variety of stores across the world including Wal-Mart, Targets, Dick’s Sporting Goods, and Sam’s Club.
Since its inception and initial appearance on the Shark Tank, Liddup technology has improved to consume a far lower battery (batteries are simply disposable batteries, and rechargeable batteries are recommended for use – the size is not listed on the Liddup website), utilize smarter bulbs in order to have lights that last longer and glow brighter, and the Liddup lights now even include technology that allow for color customization. Numerous Liddup models have been invented, including an open-top model that is absolutely perfect for cookouts with a mass variety of drinks.