Brandon, Steven, and Bruno are three friends who spend all of their free time on the beaches of San Diego. After waking up from a nap, the trio had the idea of making their beach towels more comfortable by placing a pillow within their beach towels. This notion led to the creation of The Pillow Towel. They attempted to sell what they saw as a million dollar idea right there on the beach, but were unable to make any significant headway.
The three friends performed their due diligence by speaking to other beachgoers and began to develop the ideal beach towel they called the Sand Cloud, which would be more than a comfortable towel to take to the beach. They wanted to make a social impact by donating a portion of their profits to organizations that work to protect marine life.
They totally committed themselves to making the business successful. They sold their cars, moved in together and sacrificed everything in their lives to make the Sand Cloud work. Now they were willing to dive into the Shark Tank to see if they could get an investment to try to take their business to the next level.
Sand Cloud on Shark Tank
Shark Tank Season 8 Episode 18
When they took the stage, Brandon, Steven, and Bruno looked like they had just stepped off the beach. The three beach-loving friends asked for a $200,000 investment in exchange for 8 percent equity in Sand Cloud. They explained that in living steps from the best beaches in San Diego they realized that beach towels have historically been plain and unimaginative. They felt it was time to give the next generation a new, dynamic option for beach towels.
The trio introduces Sand Cloud as a unique beach towel handcrafted from fine Turkish cotton to create a lightweight and multi-functional towel that beach goers can give and receive as gifts. Available in vibrant colors and patterns, Sand Cloud towels make great decorative accessories or tapestries, and can even be multi-purposed into a scarf in the winter months. The most important aspect to the business for the owners is the connection to the environment. They donate 10 percent of each sale to efforts to preserve oceans and marine life.
Even more than the investment capital, Brandon, Steven, and Bruno are looking for a business professional to help lead them to the next steps in the success of Sand Cloud.
As samples are passed out to the Sharks, Roberts notes that the towel is quite thin and wonders how effective it would be when getting out of the water. Brandon said that each Sand Cloud towel is made from high quality Turkish cotton.
The first goal for the three friends was to create thicker and more luxurious towels, but after discussing the matter with their fellow beach lovers, they found people wanted a different kind of beach towel that can be carried in backpacks and bags. Daymond agreed with Robert, feeling the Sand Cloud is more of a wrap or sarong than an actual beach towel. The lightweight material allows the towel to double as a sarong and it can even be hung as a tapestry.
The Sand Cloud is sold for $47 and costs $10 to produce, leaving an 80 percent profit margin. While Kevin finds it hard to believe that people will pay $50 for a beach towel, but the guys insist the Sand Cloud is all about the beach lifestyle and giving back to save the environment. Bruno said their generation is always looking for a social cause to get behind and would support their cause while getting a premium quality versatile beach towel. Lori said that about half of the products they see on Shark Tank presented by millennials are associated with some sort of social cause or charity component.
Brandon, Steven, and Bruno have been working on Sand Cloud for almost three years. The first year in business they generated $30,000 in sales, jumping to around $430,000 the second year, and brought in $1.6 million in the current year, on track to hit the $3 million mark. Kevin wants to know how much they will make on the $3 million with the high profit margin of 80 percent adding up to $800,000. The trio said that they have invested a lot of money back into the business to increase visibility in the market.
Lori noted that Sand Cloud is promoted as primarily a beach towel, but felt it looked more like a wrap or a scarf. For this reason, she backs out, feeling she has a different approach to what the product is and can be.
Daymond wonders what they would do with the $200,000 investment capital. Steven said they need to rebuild their website, optimizing it for maximum effectiveness on search engines to increase public awareness and brand. The three of them run the entire operation, including marketing the Sand Cloud through Facebook campaigns which gobbled up their marketing budget in a matter of months. They wound up spending $250,000 in Facebook advertising, or about $2,500 a day. The push resulted in over $1 million in sales and profits of a quarter million dollars. The friends and partners have no business debt and have $300,000 in their bank account, and have $160,000 in inventory.
Mark is interested but wants to make sure an investment in Sand Cloud will worthwhile for all of them. He doubles the investment offer to $400,000 in exchange for 25% of the business, which would make Mark, Bandon, Steven, and Bruno equal partners in the Sand Cloud.
The trio feels that Mark’s offer is a little more than they want to give up. When they suggest they want to hear what the rest of the panel has to say, Mark withdraws his offer and exits the deal. After offering an even less attractive deal, Daymond goes back and forth with the entrepreneurs, but they never got close to a deal, and Daymond was out, too.
Impressed by the revenue Brandon, Steven, and Bruno had generated with Sand Cloud, Kevin asks if the three had received any salary from the operation. They tell Kevin that they are funding the business as they went and spend any leftover money no Facebook ads. Kevin feels the owners of the business need to start paying themselves. He offers them the $200,000 but in exchange for 15 percent of the business, making him the smallest partner. He told them it would take him three and a half years to see a return on his investment.
Robert made a similar deal with the owners of ugly Christmas sweaters and they just did $17 million in sales in the last year. Brandon, Steven, and Bruno took this to heart and struck a deal with Robert for the 200,000 in exchange for 15 percent that Kevin had offered.
Where Are They Now? Sand Cloud After Shark Tank
With Robert’s investment and input, Sand Cloud has grown their brand identity and their sales. Handcrafted beach towels still sell for $47, though discounts are offered at times. They have also added a clothing line with all of the new items also donating 10 percent to worthy environmental causes.
A new line of blankets has been introduced using colorful and dynamic patterns representing cultures from around the world. Blankets retail for $90 and have stellar, perfect, 5-star ratings on online review sites. Facebook reviews top 400 with an unheard of 4.8-star rating.
Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Sand Cloud, SharkTank, or any of its subsidiaries.