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BitsBox founders Scott Linninger and Aidan Chopra faced intense scrutiny on Shark Tank season 8 episode 17 during their pitch for a kids' coding subscription service. The founders asked for $250,000 for 3% equity, valuing their company at $8.33 million. When questioned about previous funding, they revealed raising $550,000 at a $4 million valuation, which prompted Kevin O'Leary to state:
"Why would you raise the price by a factor of seven for a shark? Is that a sign of disrespect?"
The Shark Tank company entered with $1.3 million in sales and 800,000 users but wasn't cash flow positive, as per Shark Tank Blog. Despite walking away without a deal, BitsBox tripled its customer base post-show and reached $12.5 million in annual revenue by 2023.
BitsBox left Shark Tank without deal after valuation dispute
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Former Google employees Scott Linninger and Aidan Chopra built BitsBox in 2014 to make coding fun for children. Their initial Kickstarter campaign brought in $253,696, showing strong public support for teaching kids programming skills. The founders' experience in tech helped shape their vision for an educational platform that would make coding accessible to young minds.
The moment Scott and Aidan sought $250,000 for 3% equity marked a turning point in their Shark Tank appearance. Mark Cuban's immediate reaction was shown through an audible gasp at the $8.33 million valuation. The founders brought young Grace to demonstrate their product, who showed off a custom-made Shark Tank app using BitsBox code.
Lori Greiner stepped away first, stating her lack of experience in subscription businesses made her unsuitable as an investor. Robert Herjavec followed, pointing to the saturated market of coding education companies as his main concern. Mark Cuban appreciated the product but worried about future capital requirements for scaling.
Kevin O'Leary focused on the valuation gap, questioning why the founders raised their asking price from $4 million to $8.33 million when approaching the Sharks. His direct question about showing respect through valuation sparked intense discussion on the Tank.
As the last remaining Shark, Chris Sacca put forward $250,000 for 5% equity, valuing BitsBox at $5 million. The founders responded with several counter-offers, moving from 3.57% to 4% and finally to 4.75% equity. Sacca maintained his original offer, stating the importance of Shark expertise over pure equity percentages.
Post-Tank results
Despite walking away without a deal, BitsBox saw their business triple within one month after the episode aired, per Shark Tank Blog. The company secured funding from outside investors at their target valuation. They expanded operations by adding team members and doubling their office space.
The company built a video production studio to enhance its educational content. Their growth continued steadily, reaching $11 million in total sales by mid-2020. By 2023, BitsBox reported $12.5 million in annual revenue with an estimated company value of $27 million, proving its ability to scale without Shark investment.
Company background
BitsBox created three distinct subscription options to reach different customer segments. The digital package costs $19.99 monthly, giving users access to coding projects online. The basic subscription at $25 included physical materials with a binder and project cards. Their premium package at $45 monthly includes educational toys, trading cards, and interactive materials.
Each month's box contained fresh coding challenges designed for children aged 6-12. Students learned by typing actual code into the BitsBox website, creating real applications that worked on any device. This practical approach to learning programming sets them apart in the educational technology market.
The company gained significant traction before appearing on the show. With 800,000 users worldwide and $1.3 million in sales, BitsBox showed strong market validation. They raised $550,000 from initial investors at a $4 million valuation, using the funds to develop their product line and expand into schools.
New episodes of Shark Tank season 16 are airing on the ABC network.
