looking for $100,000 in return for a 20% stake in his company, valuing his business at $500,000<\/a>.<\/p>\nTAG offers high-quality, unique and adventurous outdoor experiences for clients alongside some of Australia\u2019s former special forces operators (like Mick).<\/p>\n
We were told that TAG offered \u201cunique sensory experiences with a strong special forces flavour\u201d.<\/p>\n
Being ex-army myself that got me intrigued, to be honest the sight of special forces soldiers rappelling from up high at the beginning of Mick\u2019s pitch was quite exciting.<\/p>\n
TAG aims to build resilience, teamwork, and leadership through two \u201cexperiences\u201d: the Cave consists of the ex-Special Ops forces teaching small groups of people skills that could save lives.<\/p>\n
SOE simulates what it\u2019s like to be on a real mission. It comprises seven different high-end experiences where a small team of clients are taught how to plan, prepare and carry out a mission including hostage rescue, and escape evasion recovery.<\/p>\n
Depending on which mission is chosen, it typically involves parachuting, planes, trains, automobiles, and boats.<\/p>\n
I thought this was clever \u2013 it meant TAG could upsell customers six other times after they\u2019d done it (SOE) once. I was sitting back thinking, \u201cI\u2019m liking this already\u201d.<\/p>\n
TAG\u2019s conservative revenue for next year was $500,000, and triple that a year later.<\/p>\n
Fellow Shark Andrew Banks got the ball rolling an offer $100,000 for a 35% stake.<\/p>\n
While I liked it, I felt there were many moving parts with the business but was willing to go in halves with Andrew ($50,000 each for 17.5% apiece).<\/p>\n
Naomi Simson then decided to throw her hat into the ring with a $100,000 offer for 25% of TAG, plus a business manager.<\/p>\n
The advice to Mick was decide who want to do business with before negotiating.<\/p>\n
Mick\u2019s gut feel was two sharks would be better than one so he asked Andrew and I to reconsider for $100K for 30%, which we agreed.<\/p>\n
First impressions<\/h3>\n
One of the biggest mistakes an investor (or anyone for that matter) can make is to judge a book by its cover.<\/p>\n
Thankfully, I did no such thing when the baby-faced Michael Timbs walked into the tank. The 24-year-old turned out to be a shrewd businessman \u2013 four sharks ended up taking the bait before a deal was finally done.<\/p>\n
Unlike TAG, there was no sensational entrance for Betswaps, just a screen and a portable poster.<\/p>\n
Betswaps is touted as the world\u2019s first sports tipping marketplace. It essentially sells information. Michael was asking for $200,000 for 10% equity, valuing his startup at $2 million.<\/p>\n
Betswaps is not an online bookmaker \u2013 which I\u2019ve got a real issue with. It sells tips or information for more than 40 different sports and over 100,000 different betting markets.<\/p>\n
For example, if you\u2019re a novice punter on Melbourne Cup day, Betswaps allows you to compare top horse racing tips, see their win-loss record, profit and return on investment (for those who followed their tips).<\/p>\n
Customers can then see who has tips available for sale and securely purchase them.<\/p>\n
Michael was confident in his pitch and knew his numbers well: $100,000 in revenue, including $25,000 last month alone. It\u2019s forecast to pass the $1 million sales mark next year.<\/p>\n
Most of the revenue comes from selling advertising.<\/p>\n
I was first out of the gate with a $200,000 offer for 35%.<\/p>\n
Michael was resolute. He refused to budge, saying he was set firmly on 10% and I was asking for too much.<\/p>\n
Andrew came in with 30% for the same amount while Naomi heated things up at 20%.<\/p>\n
New shark Glen Richards made the playing field very uneven, agreeing to take 15% equity for $200,000.<\/p>\n
I lowered my 35% offer by 5% but to avail. Michael just stuck to his guns. It was annoying but I respected that.<\/p>\n
He revealed that Betswaps had recently started raising capital and was overwhelmed with interest.<\/p>\n
At that point I could have taken a punt or let it slide. Every investor knows they\u2019re taking a risk in these situations and that you win some and lose some but I was confident that Michael and his team could deliver the goods.<\/p>\n
In the end Glen and I agreed to take a 15% stake for $200,000 in Betswaps.<\/p>\n
Both TAG and Betswaps were successful on the day because they had the basic ingredients to succeed: A compelling offering, good business acumen and a passion for their venture.<\/p>\n
It\u2019s important to stick to your guns and have a clear plan when negotiating \u2013 always have a bottom-line, middle and walkaway point. Otherwise you might give up too much equity and live to regret it.<\/p>\n
Follow StartupSmart on<\/em> Facebook,<\/em> Twitter,<\/em>LinkedIn <\/em>and <\/em>SoundCloud.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"On the surface there couldn\u2019t be more stark of a contrast between the two founders I chose to invest in<\/p>\n","protected":false},"author":2,"featured_media":60720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41734"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=41734"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41734\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/60720"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=41734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=41734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=41734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}