Season 5 | Episode 512 | EP512
In Season 5, Episode 12 of Shark Tank, Shawn Genebacher approached the Sharks seeking an investment of $125,000 in exchange for 20% equity in ‘Lite-Netics’. The company is currently based in Lubbock, Texas.
Lite-Netics is the brand name for a system which allows you to hand up Christmas lights without the need for hooks or wires. The whole system is powered by magnets. Shawn states that the magnets are incredibly durable. He has tested them in high winds, snow, and rain without them so much as faltering. This makes them a better choice than using wires to hang up the LED Christmas lights. It also makes them slightly more expensive than other fastening systems.
Shawn Genebacher states that he has achieved $400,000 in sales over the past four years. He has achieved $118,000 in sales in the last year alone. This however is not down to a boost in sales. It is down to the fact that he has to constantly increase the price of the Lite-Netics system due to rapidly increasing cost of the magnets that are not being used.
The Lite-Netics system has a patent which of course interests many of the Sharks. Robert Herjavec states that this is a business which is going to be very difficult to grow. This is in part down to the fact that it would cost a significant amount of cash to educate people about the merits of using this system over one that they have most likely used for a number of years. This causes Robert to pull out of proceedings. Mark Cuban also pulls out because he does not believe that he has the contacts required to make the system a success.
Shawn attempts to negotiate Daymond John’s equity stake down to 30%. He fails. In the end he opts to accept neither offer and leaves the Shark Tank without the cash that he wanted.
Kevin O’Leary offered $125,000 in exchange for 50% equity in the company. His main interest with Lite-Netics is the patent that it holds. He believes that the company should go down the route of licensing the technology out to lighting manufacturers as opposed to ‘going at it alone’.
Daymond John offered $125,000 in exchange for 40% equity in the company. Daymond is also interested in licensing out the product.