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Shark Tank: Electra Beverages Accepts $100,000 From Barbara Corcoran

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Dallas native and former WNBA star, Fran Harris is taking on the $23 billion dollar sports drink industry. Although this is a very competitive market, Fran feels confident that her company, Electra Beverages, is capable of making a space for itself in the market. Fran is committed to creating a better-for-you sports drink that does not contain sugars and artificial dyes and ingredients like their competition. Although she is very confident, she does need a cash infusion from a Shark as Electra Beverages is a new company that is just getting started. She is seeking $200,000 in exchange for 20% equity in the company.

The Sharks are very skeptical of this business proposition as the beverage industry is very hard to break into. Cooler space is nearly impossible to get and the competition has major financial backing which makes it very difficult for new brand entry into the market. Despite these factors, they do like the taste and flavors of Electra Beverages and so they ask Fran to break down how she would use their financial investment. Because the business is brand new and does not have any sales, cash (approximately $20,000-30,000) is needed for the first production run. An additional $30,000 would be needed for research and development and she would also like to hire someone to assist with logistics, sales, and marketing.

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    While the Sharks are very impressed with Fran as an entrepreneur and admire her confidence and drive, they are very concerned about trying to compete in the beverage market. Most of the Sharks have lost money to this industry and they are not eager to do it again. Although it looked as if all the Sharks were going to decline this investment, Barbara Corcoran decided to extend Electra Beverages an offer, contingent upon a shared risk between her and Fran. Because Fran disclosed that she had several all-star pro athletes lined up who were willing to invest and promote the business, Barbara’s offer is contingent upon one of them joining their team as an investor. If they do not, the entire offer is revoked. Barbara offers to invest $100,000 while also making $250,000 available as a line of credit, pending the partnership with at least one of Fran’s anonymous athletes. In exchange, Barabara will get 30% equity in Electra Beverages. Fran agrees to Barbara’s offer and her contingency.

    If you were a Shark, would you invest in Electra Beverages? Do you think that Barbara made a wise decision to invest in this company? Do you think it is possible for Electra Beverages to make a name for themself in the competitive sports drink and beverage industry? Start the dialog in the comments below.


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