Hydroviv
Hydroviv is a Washington DC based company that produces water filters designed around the water data in a given area. For instance, an earea with high amounts of lead or arsenic can have seperate filters added to their water system to address these particulates. The problem with general filters, the entrepreneur states, is that general filters don't filter out anything very well.
To ensure use and convienence, the Hydroviv can be attached to existing faucets. Each filter cartridges will last for six months.
Perhaps because of the lead statement, guest shark Rohan Oza asks whether Hydroviv would have solved the Flint, Michigan water crisis. THe entrepreneur states that it was trying to come up with a solution for Flint that lead to his creating Hydroviv. He also says that the company has a utility patent on the construction of their cartridges.
Filters retail for $190 per unit and cost $48 per unit to make and ship free to the customer. Filter cartridges cost $10 per unit to manufacture and retail for $55. All sales are through an e-commerce platform.
The entrepreneur projects that Hyrdoviv will make $325,000 in sales by the end of the year and will do $1,700,000 in the next.
Hydroviv is looking for money because the entrepreneur wants to begin advertising. He claims to have 200,000 unique visitors from organic traffic to the company blog but that he needs additional help with sales and marketing. The money raised from the sharks would be spent hiring a senior marketing person, expanding e-commerce systems, and funding advertising operations.
Currently, Hydroviv outsources all advertising but the entrepreneur wants to hire someone that will "wake up thinking about marketing." Mark seems unenthusastic about this idea, saying that any ad person will just spend money to prove their worth.
This deal aired on Episode 10.19.
Making A Deal
Guest shark Rohan Oza says that the problem he sees is that people may not know about the quality of their water and that he's unsure about how to reach out and communicate with those people. Lori seems to agree, stating that she thinks the marketing message is too complicated and drops out of the deal.
Mark states that he thinks the real product Hydroviv is selling is trust. But he also believes that, rather than hiring a marketing person, the entrepreneur should be the one trying to sell it. He then offers $400,000 in exchange for 20% equity.
Barbara says that the entrepreneur saying "I need help with sales and marketing" are the scariest words someone fundraising can say and exits the deal.
Mark, as he sometimes does, begins to grow impatient with the entrepreneur and demands a yes or no to his offer. Unfortunately, the entreprepeneur doesn't take the hint and keeps talking, attempting to sell the concept of his business despite already having an offer on the table and even after acknowldging that Mark is the person he was there to make a deal with.
Fortunately, Mark forces him to stop talking and make a decision and, finally, he does, accepting Mark's deal. Because of the 20% equity ask, this effectively bit the value in half to $2,000,000 from the original $4,000,000 but one hopes that the additional sales Mark can bring will more than make up for it.