Welcome to the Tank

LuminAID Solar Light Investment Negotiation

Lauren Hossfeld & Emily Burke

Summary

The LuminAid Solar Power lamp is a rechargeable, inflatable, solar power lamp. It caters to an outdoorsy crowd from a recreational standpoint, but also serves as a highly functional and dependable device during natural disasters such as hurricanes, floods, earth quakes, etc. Created by Andrea Sreshta and Anna Stork in a college class after the Haiti earthquake in 2010, the two appeared on ABC's Shark Tank seeking an investment of $200,000 in exchange for 10% equity in their business.


The two business owners are seeking to further expand their market globally. The negotiation conflict at hand is working out a deal between the two LuminAid owners with one of the Shark's. What deal will benefit each party while maintaing the interests of the LuminAid owners?

Relevant Parties

  • LuminAid- Andrea Sreshta and Anna Stork
  • Sharks- Robert Herjavec, Daymond John, Lori Greiner, Kevin O'Leary, & Mark Cuban

Party Positions & Interests

LuminAid

Funding/Business Partner

  • seeking $200,000 in exchange for 10% equity in the company
  • potential exposure that association with a shark brings
  • international business knowledge
  • networking possibilities

Growth on Global Scale

  • international networking connections
  • increased profits
  • overall wider/vast market for both buyer and consumer

Increase Profits

  • money
  • potential to sell company

Sharks

Money/Return on Investment

  • expanding personal investments

Profits

  • entering into a new market
  • high potential for growth and success
  • personal branding/image

Options for Mutual Gain

  1. Kevin O'Leary: $200,000 attached to Columbia royalty 4%, royalty goes away after shark receives four times his original investment, no equity, leaves partnership with company once these conditions are met
  2. Daymond John: $300,000 for 20% equity in the company, goal is to license product
  3. Lori Greiner: $200,000 for 20%, it's going to take more of the Shark's time to promote product, skills/connections are going to be highly helpful
  4. Mark Cuban: $200,000 for 15% equity, option to lead the next round of financing in the amount of $300,000, want to make sure there is a solid foundation for economic growth
  5. Robert Herjavec: $200,000 for 15% equity, more of a current retail market versus future market
  6. LuminAid: $200,000 for 10% equity in company, sharks get money while they get support/room for growth

Objective Standards

  • For approximately 8 flashlights by volume, you can pack up to 50 LuminAID solar lights
  • LuminAID lights can be printed with instructions for use in the field and logos while basic flashlights have no operating instructions
  • Renewable lighting can aid those in situations in which batteries are scarce and the electricity grid is disabled verses similar products that rely on sources of electricity, batteries, or other cumbersome packaging
  • 100% waterproof, lightweight, and the inflatable plastic could help diffuse the LED light
  • Other solar power systems, such as a solar PV system, generate annual returns ranging from 10% to more than 30% over their 20-35 year life span
  • In 2013, LuminAid worked with ShelterBox to distribute over 20,000 lights to victims of Typhoon Haiyan in the Philippines
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IN CLASS PRESENTATION NOTES