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Shark Tank investor Mark Cuban has invested in multiple businesses on the ABC reality TV show. He has also provided guidance to aspiring entrepreneurs as well as new business owners. When Haven Lock founders Alex Bertelli & Clay Banks pitched their product on season 10 episode 18, Cuban pointed out the challenges they might face in the future.
Alex and Clay were seeking $500,000 for a 6% stake in their company, and the sharks, including Mark, were interested in their idea of a door security wedge that came with mechanical technology while providing the users access to unlock their doors through their own smartphones.
The Haven Lock founders told the Shark Tank investors that the mechanical version of the product was priced at $182 and cost $67 to make. The electronic version was for $349, and it cost $175 to make. When they revealed they had spent $1.5 million and were $500,000 in debt, Cuban said:
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"Guys I think what you have done is brilliant but the challenges to your economics are awful, your margins are awful to support what you need to do."
Cuban and other Shark Tank investors shared the reason behind not investing in Haven Lock
On Shark Tank season 10 episode 18, Haven Lock founders Alex Bertelli & Clay Banks appeared on the ABC show seeking $500,000 for a 6% stake in their door security wedge. In their pitch, the founders showcased a demo for the door wedge that restricts the door from opening. The product also came with mechanical wedge technology and a lock that could be unlocked via smartphone.
Then, Alex and Clay demonstrated that their product could be used in classrooms to give teachers and SWAT teams access to the lock to close the doors easily. Upon hearing this, the Shark Tank investors were interested in the product. However, they backed out when the company's profit margins were disclosed.
Kevin O'Leary stated that it would take some time for the founders to figure out what works for them and what doesn't and he didn't want to be a part of that. Kevin said:
"I think you're going to have a party hard time figuring out how to get to scale and figuring out what works and what doesn't. I don't want to be part of the journey, I'm sorry. I'm out."
Cuban also chimed in, stating that it would be "difficult" for the Haven Lock founders to navigate their margins. The Shark Tank investor further elaborated from a "cash flow perspective" and the challenges the company might face in the future, he continued:
"You guys I just think it's going to be difficult, particularly from a cash flow perspective it's going to take you raising your price you know, to generate th margins until your costs come down even then the margins just aren't there, guys, I'm out."
Meanwhile, for Lori, it was "too early" to invest in their product; hence, along with Barbara, she backed out as well. Lori said:
"I think this is really smart the problem for me is I like to really understand a product when I invest in it and you might be too early. I can't invest at this point so I'm sorry I'm out."
Haven Lock current status
As of September 2024, Haven Lock is still selling its original products and has launched Haven Connect Z - Wave. Lowes has priced The manual Haven Mech at $198, but the devices are unavailable on Amazon.
New episodes of Shark Tank air exclusively on ABC every week on Fridays at 8 pm ET and 7 pm CT.
