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In Shark Tank season 7 episode 10, which aired on December 4, 2015, entrepreneurs Jesse Potash and Gaston Blanchet entered the tank to pitch their smart luggage company, Trunkster.
Hoping to revolutionize the travel industry, the duo sought $1.4 million for 5% equity in their company, valuing Trunkster at $28 million, while on Shark Tank season 7 episode 10. The presentation took a tense turn when Kevin O’Leary asked:
“Do you see any problem with that?”
Despite boasting significant crowdfunding success, the founders faced sharp skepticism from the sharks over their valuation of the product.
The Trunkster pitch on Shark Tank
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Trunkster's founders kicked off their pitch by introducing their luggage as a disruption to traditional designs, replacing zippers with a roll-top opening and adding modern features like a USB charger and global tracking capabilities.
They explained that their crowdfunding success had resulted in over $2 million in pre-sales and that they were close to shipping their first 5,000 units, which were already on the assembly line in China.
According to Jesse Potash, Trunkster aimed to disrupt the luggage industry by offering a premium product at a competitive price. Constructed with airplane-grade aluminum and polycarbonate, the roll-top suitcase offered travelers both durability and style. The company’s direct-to-consumer model promised to cut out retail markups and deliver the product at a fraction of the cost of competitors.
Their $1.4 million Kickstarter campaign became the most-funded travel project in the platform’s history, along with an additional $1.5 million raised on Indiegogo. However, their Shark Tank valuation and the fact that they had yet to deliver any products raised immediate concerns among the sharks.
The sharks questioned the company’s valuation of $28 million, which stemmed from the founders’ projections of $3 million in sales by the end of the year and $9 million in the following year. Kevin O’Leary, Robert Herjavec, and Lori Greiner immediately raised doubts. Kevin stated,
“Which one of you do I absolutely tear to pieces now on a $28 million valuation?”
O’Leary asked pointedly, “Are you out of your mind?” when discussing the valuation. The fact that Trunkster had not yet sold a single product further fueled skepticism.
Robert Herjavec asked whether they were actively selling the luggage, to which Blanchet clarified that they were still pre-selling while working through the manufacturing process. Lori Greiner pointed out that no one had even asked about the cost of production. Potash revealed that the luggage retailed at $395, with production costs making up 20% of that price, roughly $79 per unit.
The sharks continued to dissect Trunkster’s valuation, with Robert suggesting the company was likely worth only $5 to $8 million based on their current position. Kevin O’Leary expressed similar concerns, stating flatly that the $28 million valuation was unjustifiable. Mark Cuban stated,
“Look, you put that money in your pocket. That's money you made. You put that money in your pocket. But that's anecdotal, right? It's one-off. You don't have any track record there.”
Robert Herjavec made the first offer: $1.4 million for 30% equity, valuing the company at a much lower figure. Kevin followed up with a competing offer in Shark Tank, asking for 37% equity for the same amount of money. Meanwhile, Lori Greiner proposed a structured deal that would use the $1.4 million as a purchase order funding mechanism, offering 15% equity in exchange.
Mark Cuban chimed in, suggesting he and Lori could team up to refine her deal, but none of the sharks were willing to entertain the $28 million valuation. After lengthy discussions in Shark Tank, the founders revised their terms, asking for $1.4 million for 5% equity per investor, with a clause to increase equity to 10% if the investment wasn’t recouped within two years.
They also proposed adding a $1 royalty per unit sold until the money was repaid. Eventually, Mark Cuban and Lori Greiner agreed to the deal, contingent on adjustments to fit their investment structure.
Shark Tank airs every Friday at 8/7c on ABC.
