Butter Cloth
Butter Cloth is an apparel company from Long Beach, CA, that makes dress shirts that feel "like your favorite t-shirt" while still looking formal. The comfortability was vouched for by former NBA player and now coach Metta World Peace.
Every shirt is made from 100% "long fiber cotton" and features a six-way stretch and "breathability". According to one of the entrepreneurs, it feels like bing "wrapped in a hammock in the Caribbean but ready to give a speech at NASA."
The shirt retails for between $98 and $118 online through the company site exclusively. It costs between $20 and $25 per shirt to produce, landed. In the seven months since the company launched, Butter Cloth has grossed over $500,000 in sales, though the entrepreneur stated that it costs $40 to acquire each customer. All of Butter Cloth's marketing has been done via Facebook and Instagram.
Dan, the founder of Butter Cloth, grew up in Vietnam and came to the United States to be a fashion designer. He originally worked for Mattel, designing clothes for Barbie dolls before finally being able to go to school for fashion. He invested $250,000 of his own money into the company, selling his house and cashing out his 401(k) to do so.
The entrepreneur said that he's looking for a $250,000 investment so that he can use two-thirds of it to acquire inventory and the other third to "bring marketing in-house" though he would also like advice on how to do so.
This deal aired on Episode 10.04.
Making A Deal
Kevin objected to the customer acquisition cost, as did Mark. Robert loved the product and cited his investment in Tipsy Elves as a reason why he was both interested in the product and the category and why he would make an ideal partner. However, he insisted that 25% equity was his price in exchange for the $250,000 injection of capital that the entrepreneurs were looking for. Given that the entrepreneur was originally offering 10%, this represented a bite of more than half the value at $1,500,000.
Still, he accepted the deal and walked away with Robert as a partner.
Updates
In episode four of Season Eleven, we got on update on how Butter Cloth was doing. According to the entrepreneur, in the seven months since the deal the company had sold over 30,000 shirts and made $3,000,000 in sales. (This is a bit hilarious because in just the prior episode during the Baobab pitch, Robert said Butter Cloth had done $3,500,000 in sales!) Additionally, Butter Cloth had been opening pop up stores across Los Angeles and even created a new collection, "The Herjavec Collection" which the entrepreneur claims is the best selling line Butter Cloth has.