What Should You Value More — An Investor's Money or Their Experience?
On this episode of "Entrepreneur Elevator Pitch," a contestant has a very tough decision to make: Take the big money now, or gamble on bigger money later.
On Entrepreneur Elevator Pitch, every contestant is just 60 seconds away from a rise to greatness or a fall from glory. By the end of these nail-biting, stomach-churning episodes, some entrepreneurs walk away with business-boosting investments, and some go home empty-handed.
You never know how your nerves will hold up when it is your time to pitch, and if you get into the boardroom, you never know what kind of questions you will face or what problems will pop up. And on this week's episode, one entrepreneur faces what is considered to be a good problem to have: two investors battling for their business. One offers more money; one offers more experience. Which would you value more?
See which way they go on the new episode of Elevator Pitch, streaming now!
On Entrepreneur Elevator Pitch, every contestant is just 60 seconds away from a rise to greatness or a fall from glory. By the end of these nail-biting, stomach-churning episodes, some entrepreneurs walk away with business-boosting investments, and some go home empty-handed.
You never know how your nerves will hold up when it is your time to pitch, and if you get into the boardroom, you never know what kind of questions you will face or what problems will pop up. And on this week's episode, one entrepreneur faces what is considered to be a good problem to have: two investors battling for their business. One offers more money; one offers more experience. Which would you value more?
See which way they go on the new episode of Elevator Pitch, streaming now!
Transcript
00:00 Welcome to the elevator.
00:03 Today, three VIP titans of the industry decide the fate of rising entrepreneurs.
00:10 Alright, look, there's only one way to find out. Let's go to a vote.
00:12 Determined to prove their greatness.
00:15 That was a great pitch.
00:16 Good pitch.
00:17 That's business. You never know what's going to come out of left field.
00:19 In 60 seconds or less.
00:21 I'm not going to be all in, but I'm in enough to see where it goes.
00:25 Listen, it's double the investment. I have 20 years building tech companies.
00:29 What's your answer to that, Mark?
00:31 This is Entrepreneur Elevator Pitch.
00:38 Presented by Amazon Business with support from State Farm.
00:43 Meet our Board of Investors.
00:49 Kim Perel, Serial Entrepreneur and Tech CEO of 100.co.
00:55 Mark Randolph, Co-Founder and First CEO of Netflix.
01:00 Joe DeSana, CEO and Founder of Spartan and Death Race.
01:06 First in the elevator, an entrepreneur presents Hollywood-level productions to immerse students in real-world scenarios.
01:18 I am Kimberly Theresa Ann Rocco Shields, but everyone calls me Rocco.
01:23 My company's name is Genius Academy.
01:25 Genius Academy is an on-demand subscription-based platform that allows educators and institutions to license high-fidelity simulations.
01:34 So our content, our curriculum, acts as the flight simulator for mental health education.
01:39 My father, he has been struggling with addiction for years, and we lost him just a few months ago.
01:49 I feel that if he had better physicians that really treated him as a human, it could have saved his life.
01:55 So this one's for him.
01:57 Going up.
02:07 Hello, Rocco.
02:12 Welcome to the elevator.
02:15 Your pitch begins in 3, 2, 1.
02:20 Take a moment and imagine if pilots took to the sky with cabins full of people without ever practicing or using a flight simulator first.
02:29 That is how current and future mental health professionals are being trained to go battle the mental health crisis.
02:35 I'm Kay Rocco Shields.
02:37 I'm an award-winning filmmaker, Congress award-winning educator, and founder of Genius Academy, where we offer digital simulations powered by technology, AI, and the immersive art of Hollywood-style storytelling.
02:50 So instead of trying to learn and memorize dense textbooks like this, we offer digital simulations that simulate true-to-life practice.
02:59 And in just nine months with our B2B2C subscription-based model, we've hit $450,000 in annual recurring revenue.
03:08 We're on the cusp of revolutionizing a billion-dollar industry.
03:12 I have $300,000 left in our $1 million round.
03:15 Safe note with a $1 million cap.
03:18 Well, she certainly seems like she went through her own academy for that.
03:26 That was almost textbook.
03:28 It sounds like she can basically rework MasterClass.
03:32 Well, I was impressed.
03:34 $450,000 in ARR in a very short amount of time is quite impressive.
03:37 It's impressive.
03:38 If it's true, how is she doing that?
03:40 It's impressive.
03:41 And I am interested in this new world of, hey, kids are wondering, should they go to university, should they not go to university?
03:46 So if we can teach people in a more effective way, if anything, we'll learn something.
03:50 Well, we'll have a chance to vote whether we see more or not.
03:54 Let's do it.
03:55 Shall we vote?
03:56 Yeah.
03:57 [MUSIC PLAYING]
04:00 Attention, Rocco.
04:04 Your pitch has been approved.
04:12 Rocco.
04:16 Hi.
04:17 So first of all, I've got to say congratulations.
04:19 That was a great pitch.
04:20 Thank you.
04:21 We unanimously voted to bring you into the boardroom.
04:24 But that doesn't mean you're home free.
04:27 We do have some questions.
04:28 And I want to start by first, when you recited your background, I didn't hear anything relating to either technology or to these types of simulations.
04:37 So where did this come from?
04:39 I started back in 2008 when this thing called the digital camera came out.
04:44 And it revolutionized filmmaking.
04:46 And it made things a lot less expensive.
04:49 And a friend of mine had this crazy idea to put the first accredited university online.
04:55 And I saw that they were filming lectures in the back of a classroom.
04:58 And I thought, hey, I can make things that look like a short film or something you would see on TV.
05:04 So one video turned into 10, which turned into 100,000 videos over a decade working with top-tier universities.
05:10 But what does your technology actually do?
05:13 You specified it was maybe for mental health.
05:15 Can you elaborate a little bit on that?
05:17 To experience it will tell you everything.
05:20 So I do have a demo here if you would like to try it.
05:23 Yeah.
05:24 Let's do it.
05:25 Our content is designed to train mental health educators.
05:28 And so what this does is it puts you in the driver's seat with a simulated patient named Patty who's been referred to you in the emergency room.
05:36 First, you're going to watch.
05:39 I don't know why the doctor wanted me to see you.
05:42 It was just a stupid accident.
05:44 It's not like I intended to do anything to hurt myself.
05:49 I just wanted to listen to some music.
05:51 And honestly, the sound system in the car is terrific.
05:55 I'm just so glad I spent the extra cash on it.
05:58 So that's why I closed all the doors to their bedrooms and the house.
06:04 I didn't want to wake them.
06:06 I would never try to kill myself.
06:08 I just forgot to open the garage door.
06:11 That's all.
06:12 I just lost custody of my kids, and I wasn't thinking about the damn garage door.
06:17 Look, I'm overwhelmed, okay?
06:19 So why doesn't anyone believe me?
06:22 First part of this is choose your own adventure.
06:24 So pick one of these responses.
06:26 Okay.
06:27 Click that.
06:28 I see you're upset.
06:30 Go ahead and press play.
06:32 You've got a great grasp of the obvious.
06:34 Of course I'm upset.
06:35 Wouldn't you be if nobody believes what you were saying?
06:38 Okay.
06:39 Okay, so now is the magic.
06:42 Okay.
06:43 Click video.
06:45 Use communication skills to work with Patty.
06:49 You've obviously angered her.
06:51 And make her feel heard and understood.
06:53 Patty, I'm so sorry for the loss of your kids,
06:58 and I can't imagine how hard that must be for you.
07:00 There's so many people that love you.
07:03 Okay, so right now that's sending it up into the cloud.
07:06 And we are going to grade your soft skills based on that video upload you have just done,
07:11 and give you instant feedback in real time.
07:13 Amazing.
07:15 So I'm going to take you to the results screen.
07:17 You got a 7 out of 10.
07:19 Response to Patty's expression of feeling unheard and misunderstood
07:23 shows some effort to acknowledge her feelings.
07:26 There are a few areas you can improve upon.
07:28 Great.
07:29 It's important to avoid jumping straight into an apology
07:32 without fully understanding the situation.
07:35 For example, you could say something like,
07:37 Patty, I can imagine how incredibly difficult and heartbreaking this must be for you.
07:41 The loss of your children, your pain and frustration are completely valid.
07:45 Additionally, it's crucial to actively listen to Patty and reflect her emotions back to her.
07:50 I do like that it's not 1970s clunky.
07:53 I mean, the filming was done well enough that you'd feel okay interacting with it.
07:58 So is there a story behind why you focus on mental illness?
08:02 There's a couple stories.
08:05 The first is that as a filmmaker, I created a film that went into the world,
08:09 and it changed the way people think about prejudice, human rights, and bullying.
08:14 And I saw what impact that had to the world.
08:17 Besides that, I have a family member who we just lost.
08:21 And right now the tools they have are books like this,
08:23 where they have to memorize thousands of diagnoses.
08:27 There is nothing to actually work with physicians to develop soft skills.
08:33 How many end customers are currently using this software?
08:36 So right now we're with, we've only been launched for nine months.
08:39 We have over a half a dozen university programs and 3,000 students.
08:44 We just signed a deal with the American Psychological Association
08:48 that will push this out to 150,000 practitioners as well.
08:52 What is your projected revenue for next year?
08:55 10 million.
08:57 From 450?
08:58 Yeah, we've only been out for nine months,
09:01 and I have a pipeline of at least 50 universities.
09:05 Look, I think you're great.
09:07 This is a learning management system, the first I've seen,
09:10 that feels a little more James Cameron avatar, a little less Flintstone.
09:17 But I have to pass.
09:20 I think what you're doing is really interesting.
09:24 I'm not going to be all in.
09:26 I do have a bunch of questions about it, but I'm in enough to see where it goes.
09:30 So I would be willing to do $50,000 at the existing terms.
09:35 Kim?
09:37 I actually am very impressed.
09:40 I was impressed before, but that type of growth, that's what put me into the in category.
09:44 So I would love to invest $150,000 at the current round.
09:51 What's your answer to that, Mark?
09:59 Yeah, I'm not going to come up and match where you are.
10:04 But I'll go to $75,000 just to make it a fair fight with Kim.
10:12 Listen, it's double the investment.
10:14 I have 20 years building tech companies.
10:17 My expertise is invaluable.
10:20 I'm doing this day to day and I'm operational, and I think I can really help you.
10:24 Mark is the Netflix founder.
10:27 Yeah, it's probably the experience that I bring besides that.
10:31 It's more the fact that I've been in your shoes.
10:34 I've grown and scaled a company and could be of help that way.
10:40 All right, you've got an offer from Mark at $75,000 or an offer from myself at $150,000.
10:46 What are you going to choose?
10:49 This is really tough.
10:51 I am a self-made entrepreneur, much like you.
10:55 And you could bring a lot to the table as far as marketing and brand.
11:00 And people say we are the Netflix of education.
11:05 And so it would be an absolute dream to have you on the cap table.
11:14 It's a good problem to have.
11:18 I wish I could have you both.
11:27 I really hope that we can stay connected because I would love to talk to you further.
11:31 But Mark, I would have to go with you because I promise I won't disappoint you.
11:38 Thank you, sir.
11:39 Thank you very much.
11:40 Good luck with everything.
11:41 And I'm glad I can help.
11:43 Not only hopefully you'll make me some money, but we can both do some good in the world.
11:46 I promise to make you money.
11:48 Thank you.
11:49 I am so excited.
11:50 It's an absolute honor to get an investment opportunity from both Kim and Mark.
11:55 And it was such a tough decision to choose between the two of them.
11:59 I wish I could have chosen both.
12:01 I did not see Mark coming.
12:03 I didn't know you were going to jump at it.
12:05 Listen, that's business.
12:06 You never know what's going to come out of left field.
12:08 Hey.
12:09 And speaking of coming out of left field.
12:10 Time for me to get a deal.
12:12 So are you guys ready to see the next pitch?
12:13 Let's do it.
12:14 Let's go.
12:15 [MUSIC]
12:18 Entrepreneur Elevator Pitch is presented by Amazon Business.
12:22 For every organization at every stage of growth.
12:26 [MUSIC]
12:32 Next, an entrepreneur hopes to hit it out of the park with a fresh way to enjoy your beverage.
12:39 [MUSIC]
12:47 Going up.
12:48 [MUSIC]
12:51 Hello, Sandy.
12:53 Welcome to the elevator.
12:56 Your pitch begins in 3, 2, 1.
13:01 [MUSIC]
13:03 Hi, my name is Sandy Goldman.
13:05 I'm with the Beer Bat Company.
13:07 We are selling the Beer Bat to fanatics that can allow consumers to buy it online.
13:13 They can go into stadiums and get it at the beer concession stand.
13:18 We have a patent for the Beer Bat.
13:21 We also have an MLB license.
13:24 It's 24 inches tall and it holds 26 ounces of beer.
13:29 We can't make them fast enough.
13:31 That's why we're here today.
13:33 We are around the world.
13:35 You can find us in the U.S., Canada, Mexico, South Korea, Japan, and Australia.
13:44 We are presenting today a $250,000 safe note for 5% equity.
13:53 And we are looking to use that money to buy a mold and increase our inventory.
13:59 Our sales were $1 million.
14:01 [MUSIC]
14:04 Ran out of time.
14:05 Hit by pitch.
14:06 But I was pretty interested, actually.
14:08 I was whipsawed.
14:10 You know, at first I went, "Beer Bat," and then patent?
14:14 Can't make them fast enough?
14:15 Major League Baseball?
14:17 Like, he's got distribution of a million bucks already?
14:20 I'm trying to get people to drink less, not more.
14:23 And a bunch of people drinking with bats in their hands is not a good visual.
14:27 26 ounces of beer and a bat.
14:30 What can go wrong?
14:31 That's my point.
14:32 And is it glass?
14:33 What is this thing made of?
14:34 All right, look, there's only one way to find out what this is all about.
14:37 Let's go to a vote.
14:39 [MUSIC]
14:46 Attention, Sandy.
14:49 Your pitch has been denied.
14:58 I'm not feeling great.
14:59 Really disappointed.
15:01 My pitch went very, very bad,
15:04 and I know that I missed three or four of the key points that I wanted to make.
15:08 The Beer Bat's going to be successful regardless of this pitch.
15:11 We know wherever we go, people test it and they love it and they buy more.
15:15 I mean, guys, I thought he was on to something.
15:19 He's got a patent, he's got distribution, and he's got sales.
15:22 This feels to me like a one-trick pony.
15:25 Maybe, sure, you have a big demand right now, you fulfill it,
15:28 and then next season you're on to something else.
15:30 Pet Rock.
15:31 Remember the Pet Rock?
15:32 I sure do.
15:33 You know, sometimes the best opportunities don't look like it.
15:37 So, you know, maybe we'll find out that this was going to make more money
15:40 than all the rest of our investments put together.
15:43 It's possible.
15:44 It's okay to be wrong.
15:49 You can afford to hire influencers to market your brand,
15:52 just not the influencers that you're thinking about.
15:55 Think of the micro-influencers.
15:57 They're loyal, they have trusted fan bases, and you can market to them on a budget.
16:07 Last in the elevator, an entrepreneur aims to infuse the boardroom
16:12 with mouth-watering superfoods.
16:23 Going up.
16:27 Hello, Ross.
16:29 Welcome to the elevator.
16:32 Your pitch begins in 3, 2, 1.
16:38 Hi, I'm Ross Franklin, founder and CEO of Pure Green Franchise,
16:43 one of the fastest-growing juice bar franchises in the United States.
16:47 Our mission is to build healthier communities around the globe
16:50 by connecting people with superfoods.
16:52 We have over 100 locations across 15 different states.
16:58 Our products include superfood smoothies, acai bowls, and cold-pressed juice.
17:04 All of our products have unparalleled taste and high-performance superfood nutrition.
17:10 Last year, our average store revenue was $743,000,
17:15 with our top-performing store doing $1.4 million in revenue.
17:21 We are seeking an investment of $250,000 on a valuation cap of $30 million
17:28 in the form of a safe note.
17:30 So, judges, who wants to join us in helping to take Pure Green
17:33 to over 1,000 stores throughout the world?
17:39 That was a great pitch.
17:40 Good pitch.
17:41 Right?
17:42 Good pitch.
17:43 He uses his hands a lot.
17:44 God, there are so many companies who claim to bring health to Americans.
17:47 I don't think Americans want health that badly.
17:49 Oh, come on. I love a good juice.
17:52 So, I'm actually the target market.
17:54 So, how is his juice different? I have no idea.
17:57 Crowded, crowded market.
17:58 So, yeah, I guess that's the question.
18:00 How does he differentiate himself, right?
18:02 But I do think it's really impressive, the growth he has.
18:06 I like him as a founder. You can see how successful he's been.
18:09 I'm good friends with one of his competitors, has many locations,
18:12 very difficult business, a lot of moving parts, perishables, difficult business.
18:18 If I do decide to bring him up, it's overcoming the cynicism of yet one more franchise opportunity.
18:23 All right. Are you guys ready to vote?
18:25 Let's vote.
18:26 [MUSIC]
18:33 Attention, Ross. Your pitch has been approved.
18:42 Let's go.
18:44 Ross, welcome to the boardroom.
18:47 Thank you.
18:48 I actually thought you did a perfect pitch.
18:50 You were passionate. You could see it. You did your ask.
18:53 You showed the growth of the business, and I was really impressed.
18:56 Why did you start this company?
18:59 Yeah, so I started the company in 2014, and my background is actually in fitness.
19:04 And I opened up high-end health clubs all over the country, started my own consulting company,
19:09 and got into yoga studios, Pilates studios, finally juice bars.
19:14 And I realized that when you look at optimal health, 80% of getting results is weighted in nutrition,
19:20 and that was the foundation behind starting PureGrain.
19:23 So let me explain why I didn't want you to come up.
19:26 Sometimes a pitch can be great, but it just tells me I'm not interested.
19:30 In this case, another franchise opportunity.
19:33 So why is this franchise opportunity different?
19:36 So our biggest point of difference is the taste and the quality of our products.
19:41 In addition to that, we have world-class systems and processes.
19:45 Our stores are between 500 square feet and 1,200 square feet.
19:49 We designed PureGrain to be like the juice bar equivalent of an Apple store.
19:54 So it's all of those things combined that make us different.
19:57 Ross, very crowded market.
19:59 I mean, how do you differentiate yourself amongst a green juice shop on every corner?
20:04 So definitely a competitive market for sure, but we have a proven track record.
20:10 Last year, average store sales were $743,000, with our top-performing store doing $1.4 million.
20:17 We have a very loyal following, and our franchisees are very successful.
20:21 I mean, I'd like to taste it. If taste is the differentiator, we've got to see. I love a good juice.
20:26 Yeah, what would you recommend?
20:27 What we'll do is, Joe, we're going to have you try the ALG, one of our most popular flavors.
20:33 Mark, what we're going to do is we're going to give you what we call a transition juice.
20:37 We're going to try to transition you into a healthy lifestyle. I'd be a fan of PureGrain.
20:41 And we will also have you do this one. It's interesting because it has probiotics in it, as well as our Melon Hydrate.
20:47 Wow, thank you.
20:48 So we'll give you this one, our transition juice, and our green juice.
20:51 Thank you. Let's do it.
20:52 What do you think?
20:59 I think it's great.
21:00 You like it?
21:01 I think it's delicious.
21:02 I actually think it's pretty good. I love the little kick of ginger in there.
21:06 Our cold-pressed juice undergoes the cold-press process, which gives it a 60-plus day shelf life from the point that it's made,
21:13 and it locks in the nutrition, so it has all the nutrition as on day one.
21:18 How many stores do you currently have queued up to come on?
21:21 So we have 34 locations that are open. We have over 40 in construction right now, all throughout the United States,
21:27 and the rest are in site selection process, so total 103.
21:31 So how do you come to the $30 million valuation?
21:34 So the way we calculated that is just with 100 units at our average store revenue.
21:39 That puts us above that, and we've given a slight discount because some of those locations haven't opened yet.
21:44 So we feel that $30 million valuation is very conservative.
21:47 Well, I've got to say, I won't say I'm fully transitioned, but I'm actually reasonably impressed.
21:52 But this is a category that I don't really understand.
21:56 I don't know how to evaluate the health or the prospects of a franchise business model, essentially, especially in a crowded market.
22:05 So I apologize. Despite the quality of the juice, I have to pass.
22:10 Thank you.
22:12 Honestly, I love the product. I love your passion as an entrepreneur.
22:17 I, too, am not sure the category with cold-press.
22:23 It's a hard category, and so for me, unfortunately, I'm going to pass.
22:28 Thank you.
22:30 I own a company called Spartan Race, and we own Tough Mudder.
22:33 And so we have one and a half million people a year that are battling their way through transformation, crawling under barbed wire.
22:40 I could see a juice partner like this. We can easily help you expand around the world.
22:46 I would be interested in taking a stake, maybe in exchange for opening those doors for you, introducing you to a million and a half customers a year.
22:55 Absolutely. Well, Joe, first off, a big fan of Spartan.
22:58 You would be the ultimate strategic investor for us. I think there are a lot of synergies.
23:03 So what we'd love to do is to structure an equity advisor agreement for you, bring you on as a strategic advisor,
23:10 and we can figure out how to make it work and how to make sure that you're incentivized to work with us and help take us to the next level.
23:17 All right, look, Ross, Spartan, Tough Mudder, complicated businesses. I've got a board of directors.
23:22 It's got to be meaningful for us to get involved.
23:25 Anything less than two and a half percent of the business, we probably can't do it.
23:30 I respect your decision either way, but it would have to be at least that.
23:34 Well, look, you are an amazing strategic investor for us.
23:37 So I think creatively we can get you there on a performance base.
23:41 If you're open to a performance based structure, we can work out the details and work to get you where you want to be.
23:47 I'd be OK with that. Amazing.
23:55 Welcome to Peer Green Family. Thank you, sir. Thank you, guys.
24:01 Good luck. Thank you.
24:04 I'm feeling amazing right now. We just made a deal with Joe DeSena. He is incredible.
24:09 It's extraordinary what he's done with his company, Spartan.
24:12 They're all over the world, millions and millions of people.
24:16 So to strategically align with Joe and Spartan, it's unbelievable.
24:20 Keep an eye out for the next Peer Green coming to you.
24:27 While two entrepreneurs were able to secure a high-flying deal, one was sent back down with nothing to show.
24:36 Whether it's a new innovation or a new way of living life, anyone could be 60 seconds away from rising to greatness or fall from glory.
24:49 Tune in next week as entrepreneur elevator pitch continues.
24:55 If you ain't got the clientele, hell no.
24:57 And to apply for the next season, go to entrepreneur.com/elevatorpitch.
25:04 Investors personally styled by celebrity stylist Kim Bollefe.
25:10 [Music]
25:13 [BLANK_AUDIO]