next up are entrepreneurs with what they believe is a better version of a common wardrobe staple [Music] hi sharks I'm David and I'm Randy our company is bombas and we're here today seeking 200 000 in exchange for a five percent equity stake bombas are athletic Leisure socks engineered to look better feel better and with a mission to help those in need the mass-market athletic stock hasn't changed in decades same basic colors same Styles same cardboard feel until now we spent two years on research and development and came up with seven substantial improvements for the athletic side the result is the most thoughtfully designed and comfortable pair of socks you'll ever wear but the story of bombus goes Way Beyond re-engineering the athletic sock we learned that socks are the number one most requested clothing item at homeless shelters that really stuck with us so for every pair of socks we sell we donate a pair so we hope you'll join us to make better socks for a better world we brought some socks with us today for you guys to try on [Music] thank you sure as well here you go do I get these those two these two are for you sure thank you sir appreciate it we'd like to take a quick moment while you're trying them on to take you through our seven substantial improvements we started with Peruvian Pima cotton this is a natural fiber that Wicks moisture breathes stays warm in the winter and cool in the summer up by the toes we got rid of that annoying seam that's always causing irritation creating our invisito in the midfoot area we created our proprietary honeycomb arch support system and added our Ultra comfortable performance footbed and back by the heel we created a y-shaped stitch to create a natural cup around your heel and added a blister tab for the ankle socks so Dave and Randy I'm a big Runner I gotta tell you Specialty Sports socks are everywhere how are you different our primary difference is that we tested socks from everything down to your cheap mass-market multi-packs all the way up to your 18 to 22 dollar Niche athletic running stocks which is what you're talking about we found out the major things that made those socks feel so much better and brought them down to a nine dollar price point and on that nine dollar price point we're still able to donate a pair for every pair of purchase a two of a fine-tuned athlete I can open up to three bottles of wine in an hour and I like to do it with socks on but I have a question philosophically about this idea of giving something away every time you sell you have to double your sales to give me the equivalent returns that I get from a company that's not doing the same or you're saying no no no because on the Goodwill that you're putting out what's your wholesale we sell exclusively online what are your sales to date and when did you first start so we first started in October of last year and in the in the nine months since we launched we have 450 000 in sales that's not bad what will sales be next year we think that we'll close the end of this year at 1.1 one million dollars we think we'll close next year at 2.7 and the year after that 4.9 great sales for online an average margin is 54 that's shipped to the customer including the giveaway giveaway and what is your month-to-month growth so our month-to-month growth has plateaued this year but we've also been spending the last two months on fundraising we've been able to Circle nine hundred thousand dollars in outside funding what value uh four million dollar valuation guys why are you worth four million dollars well it's worth what people will pay you for it you can get bozos or you can get me you get both with the Godfather of bozos right here guys a four million dollar valuation in a total commodity of socks is ludicrous and I think reality will strike because you guys are still sock cockroaches you're nowhere you have no market share yet you have no retail exposure you could have said that I I think if you can raise if you can raise any company you got to start somewhere if any of these sharks give you money at that valuation I will forbid it it's ridiculous I'm out thanks for your consideration time so 400 000 in sales impressive thank you thank you here's the challenge will it work as a standalone online business for the long term or is it supplementary you haven't convinced me that this will work as a stand-alone product sale let me address that so in the 450 000 that we've done today we have spent zero dollars on advertising or customer acquisition so all of those sales have come from people telling other people about our product that's the concern word of mouth is not a scalable strategy right so word of mouth was our proof of concept right that is what okay so what's the next so the next step is we're taking this money and hiring people the customer acquisition specialist who is going to raise our base daily sales from 500 to three to five thousand dollars a day to build our Baseline yeah hold on Partnerships that's not a good answer for me I don't think you've done a good job of tell me what it's going to look like and what the key Advantage is going forward I'm out great talk though thank you before all the sharks are out you want to change your valuation metrics or open offers if you guys want to oh let's let another one drop out to see what happens when I heard you just now say that you wanted to use the money to hire in people I hate when I hear that here you are too smart guys and I feel you should be doing everything to run everything that you can right now the two of you so I really don't like that strategy Emma you've plateaued and you know when you're viral I.E word of mouth right now's the time nine months in you should not be plateauing right and I get now you want to spend money because you have to my biggest problem is when you look at Warby Parker when you look at Toms they're very high margin much higher dollar items a nine dollar sock when it's all said and done with a five dollar margin there's just not enough margin dollars in each sale and each customer and that's always going to make you have to run faster and further and for those Reasons I'm out thank you thank you very much okay now we're down to one shark happens to be the fashion Guru you know that scene in those movies in the ER where they're bringing the patient and the car to slowly paddle Circle that's happening right now so you have a chance now to readjust your valuation before you hear from the last shark who happens to be in the fashion industry you think you should do that or are you going to go down with these heard from four other well-educated people in business they obviously don't agree with that valuation do you have a different valuation that you would like to offer so we we came here today obviously with your background wanting to strike a deal with you so based on that we would we would probably be willing to go down to I mean how about two hundred thousand dollars at 10 that gives you a two million dollar valuation that cuts our evaluation in half but we think you can bring a ton of value to this 200 000 for ten percent is your counter so you cut the valuation in half down for four million to two million specifically for Damon well it's only a Damon John deal I mean it is to say that he doesn't bring value to you know an immense amount of value so guys I was about to be out what I like that valuation only because it looks like you do want to get to work 200 000 for 20 percent very sobering to hear reality strike very and I was out already I had already was thinking about the next person walking through that door sure and that small indication of you wanting to make a better deal we're here to make a deal okay I am offering you two hundred thousand for twenty percent and then we'll just get to work so I think I think we really respect your offer I think that the challenge with that and I understand that you might want more Equity is that we need the additional Equity to go out and raise Capital without giving away 40 of the company what are you raising the capital for we're raising the capital to hire and spend on marketing and you know build out our team inventory and product as well inventory and product I'll Finance you'll finance that outside of our I'll Finance the inventory regardless of how much it is regardless of how much that is but I I would have to question what you're doing with the mark and everything else because that's a black hole of advertising sure so um I will finance the inventory so our counter to that would be two hundred thousand dollars at fifteen percent with a 200 000 line of credit that's just so crazy okay guys um I'll tell you what I'll try to meet you somewhere in the middle I'm going to finance the inventory two hundred thousand dollars for 17 and a half percent that's it no line of credit I'm financing the goods I'm already I'm on the hook for the goods right now can we uh can we take a moment and call our CFO uh no the CFO gave you the bad advice already to ask for that valuation it's you guys and I don't want to talk to anybody else as partners I'm going to talk to you guys and you're going to talk to me I can't believe it all right you have a deal thank you thank you all right guys great decision great decision great decision thank you thank you congratulations