The Best Pitch Ever!On Shark Tank With Haven Shark Tank US Shark Tank Global
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00:00Next into the tank is a product to keep intruders out.
00:17Hi Sharks, my name is Alex Bertelli and I'm a former Army Special Operations helicopter
00:22pilot and the CEO of Haven, the world's strongest smart lock.
00:26And my name is Clay Banks, I'm the COO of Haven.
00:29We're from Nashville, Tennessee, and we're seeking $500,000 in exchange for 6% equity
00:35in our business.
00:36Sharks, not long ago, Clay and I both experienced a series of break-ins in our neighborhoods.
00:41In reality, a break-in occurs every 18 seconds here in the United States.
00:46We quickly realized it doesn't matter if you lock your doors or not.
00:50The traditional deadbolt just isn't getting the job done.
00:53Let me show you.
00:54This is your standard deadbolt.
00:56While it may feel secure when you lock it, an experienced intruder can get in in about
01:02five kicks.
01:03Alex, show them how easy this is.
01:07Come on Alex, kick it hard.
01:12Come on Alex.
01:13Oh, look.
01:14Come on Alex, kick it.
01:15How much do you sell the deadlocks for?
01:26It looks like we don't need to buy this product.
01:38It actually, a break-in occurs every 18 seconds here in the United States.
01:44Oh my God.
01:54Are you okay?
01:56This isn't going well.
01:58Typically, a break-in can happen in less than two minutes in the United States.
02:02One in 36 homes in America will have a break-in.
02:06Smart locks based at the deadbolt are no better.
02:09Alex?
02:10Sure.
02:12As you can tell, I'm not an experienced intruder.
02:15I'm good.
02:16But show them how Haven works, Clay.
02:18Haven sits at the bottom of the floor, right next to the existing threshold.
02:23When activated, the wedge-based barrier lifts up.
02:27Using simple physics, this makes your entire door 10 times stronger to preventing home
02:32break-ins.
02:33To use it, you simply step on the gate to open the door.
02:36To shut the door, you lock it with the gate with the foot pedal.
02:39And you can see, there's no deadbolt here.
02:43Right?
02:44So, Alex?
02:45Kick Alex!
02:46Show them how it goes.
02:53Do the fly kick, Alex.
02:58Oh no!
03:01Oh my God!
03:02He finally got it!
03:03That's right, baby!
03:04We don't give up!
03:05That's right.
03:06We don't give up.
03:07I need a service.
03:08Absolutely.
03:09Oh my God.
03:10Haven is still standing strong.
03:11We've got some demos we'll show you.
03:12Alex, you've just gone down in Shark Tank history.
03:13You will be memorialized forever.
03:14This is the connected version, Mark.
03:15You okay?
03:16Hell yeah.
03:17Here you go.
03:18Cool.
03:19All right, I'm going to grab a quick drink of water.
03:20Clay, why don't you start?
03:21All right.
03:22All right, I'm going to grab a quick drink of water.
03:23Clay, why don't you start?
03:24All right.
03:25All right, I'm going to grab a quick drink of water.
03:26Clay, why don't you start?
03:27All right, I'm going to grab a quick drink of water.
03:28Clay, why don't you start?
03:29All right.
03:30All right.
03:31All right.
03:32All right.
03:33All right.
03:34All right.
03:35So Sharks, we've got two products that we manufacture.
03:36We have a Haven mechanical mech that you have on this side.
03:37We have an electronic controlled one.
03:40And Mark's got it down here on this side.
03:42It's got a key fob just like you have with your car.
03:45It also has a smartphone app where you can share e-keys.
03:48I would be able to send you access to my house, schedule that.
03:51I would get notification when you come and go.
03:53What does each cost?
03:54So our cost for the mechanical only one, we sell it on our website for $182.
04:00It cost us $67 to make it.
04:02Our landed cost is $82.
04:05Our profit margin on that is 55%.
04:07What about the Bluetooth version?
04:08How much?
04:09The Kinect version we sell for $349 on our website.
04:13Right now, cost of goods sold is $175.
04:15Wow.
04:16That's a lot.
04:17That's expensive.
04:18I think we can get that down.
04:19It's our first batch of production at that cost.
04:21Do you have a patent issued on this yet?
04:23Yes, sir.
04:25We have two issuance from the U.K.
04:26We're still pending in the U.S.
04:27There's nothing like this that's on the floor and that stops somebody from entering.
04:32Correct.
04:33Our patents actually cover the entire door and for sliding doors.
04:36So could you do it at the top too?
04:37Yes, ma'am.
04:38So that's the other exciting thing we want to tell you about is due to recent current
04:42events, schools started approaching us to put this in individual classrooms.
04:45Oh, wow.
04:46Huge market.
04:47There's over 115,000 schools in this country.
04:49This is to protect the classroom from anybody getting in.
04:52Our plan is to lock down a classroom within one second and give teachers access and give
04:57security resource officers SWAT team access to the lock.
05:00It's actually a really good idea.
05:01That's a great idea.
05:02I don't think you told us what your sales were.
05:04Okay.
05:05So, so far we just crossed the $250,000 mark of total sales.
05:08Where are you selling them?
05:09We sell online on our own website.
05:11How much money have you raised and how much debt do you have?
05:14We've raised $1.5 million.
05:15That's a lot.
05:16Wow.
05:17And how much debt do you have, if any?
05:20We have two investors with a convertible note debt of a total of $500,000.
05:25Here we go.
05:26Are you two the sole owners?
05:29We currently own 25% each and then we have investors on top of that with additional equity
05:34to sell.
05:35So, the school situation, what is it that you have underway with schools?
05:39Tell them about the purchase order we got in Arkansas.
05:41So in Melbourne, Arkansas, we installed three locks about a month ago.
05:45They had an open house, the parents loved it.
05:48The next day, I got a call from the superintendent and said, I've got 94 classrooms left doing
05:53this school.
05:54I want to put in an order.
05:55That's a big order.
05:56Did they order 94?
05:57Yes, ma'am.
05:58What are you going to do with the money?
06:00Sure.
06:01So our biggest problem is inventory, simply.
06:03So we're going to use part of your investment to go out and scale inventory with our suppliers.
06:07Guys, look, I think what you've done is brilliant.
06:10Mark, let's do a deal.
06:13But the challenge is that your economics are awful.
06:15Your margins are awful to support what you need to do.
06:18We're just starting our manufacturing.
06:20We have made 2,000 locks and got those into the customers.
06:23We paid way over for those first 2,000.
06:26We're not going to pay that for the next 10,000 or the next 20,000.
06:29I think you're going to have a pretty hard time figuring out how to get to scale and
06:34figuring out what works and what doesn't.
06:36I don't want to be part of the journey.
06:37I'm sorry.
06:38I'm out.
06:39Thank you for your time.
06:40I think you have a huge mountain to climb and something that I don't think we'd get
06:43our money back.
06:44So for me, I'm out.
06:45Thank you, Barbara.
06:46Thank you very much.
06:47Appreciate your time.
06:48Thank you for the little pitch.
06:49Yeah, guys, I just think it's going to be difficult, particularly from a cash flow perspective.
06:51It's going to take you raising your price, you know, to generate the margins until your
06:55costs come down.
06:56And even then, the margins just aren't there, guys.
07:00I'm out.
07:01Sure.
07:02I think this is really smart.
07:03The problem for me is I'd like to really understand a product when I invest in it.
07:08And you might be too early.
07:10I can't invest at this point.
07:11So I'm sorry.
07:12I'm out.
07:14Thank you very much for your time.
07:16You know what?
07:17Come on, Dave.
07:18Let's do a deal.
07:20I'm very interested in it, but sometimes it's what's in the best interest for the entrepreneur
07:24too.
07:25I can give you a sharp deal.
07:26Then you may have to raise more capital and then you get diluted.
07:28Well, give him something to start with.
07:30What do you want him to do?
07:31Let them decide.
07:32The only reason we're here is to get one of you on this team to guide us, to mentor us,
07:36to get us into distribution opportunities and help scale our costs down.
07:40We want you on this team.
07:42You're not going to like what I'm going to say because me taking more of the company
07:45than you own is not in your best interest.
07:48And I need you to be a little selfish for yourself.
07:51So I'm not going to give you an offer.
07:52I'm out.
07:53Thank you, David.
07:55Thank you, Sharks.
07:56Good luck, guys.
07:57Congratulations.
07:58I will be a customer for sure.
07:59I am definitely a customer though.
08:00This isn't our first objection.
08:01It is not going to be our last, but there's a problem out there we're solving and we're
08:05going to keep going after it.
08:06We're going to continue on.
08:08The team follows the motto that I lived in the Army.
08:11We're never going to quit.
08:12We have paying customers out there, not only residentially, but commercially, and we're
08:15going to keep going.