Square Keg – Portable Keg
DEAL
EPISODE SUMMARY
🕓 Air Date: November 11, 2022
Asking For:
$300,000 for 10%
Investor:
Kevin O'Leary
Deal:
$300,000 for 20%
PRODUCT SUMMARY
SquareOne is a compact mini keg system that allows you to enjoy draft beverages like beer and cocktails at home or on the go.
WATCH HERE
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Background Story
Tim Loucks, the founder of SquareKeg, had always been an “idea guy” but had never acted on any of his ideas until November 2017 when he woke up in the middle of the night with a vision of creating a more efficient keg system. He noticed that traditional round kegs were inefficiently stored and transported in square or rectangular spaces, leading him to develop SquareOne, a compact mini keg. Tim’s background and experience were not in the beverage industry, but his innovative idea drove him to bring his vision to life.
The Product
SquareOne is a 128-ounce mini keg system that can hold two growlers’ worth of beer or eight pints of any beverage. It is designed to be portable and efficient, making it perfect for outdoor activities like boating or picnics.
Users can fill it with their beverage of choice, whether it’s beer or cocktails, and assemble the tap. The keg is then pressurized using a CO2 or nitrogen cartridge and remains good until it’s finished.
The product is easy to disassemble for cleaning or switching to a different drink, thanks to its threaded components and pressure-release valve. It retails for $259 and costs the company $130 to manufacture in Washington state.
How It Went
The company’s position before Shark Tank
SquareKeg had sold over 4,000 units, generating lifetime sales of over $1.4 million. However, the company faced losses of $250,000 in the previous year but was on track to achieve a 15% net profit for the current year, with over $200,000 in monthly sales. SquareKeg focused on a direct-to-consumer model, initially targeting the home market but with plans to expand into the commercial sector.
The Negotiations:
Tim initially asked for $300,000 in exchange for 10% equity in his company. The sharks were intrigued by the product and its potential. Kevin O’Leary made an offer of $300,000 for 20% equity, emphasizing his expertise in the beverage industry and the online market.
Tim accepted this offer without further negotiation, securing the deal with Mr. Wonderful. Other sharks, including Lori Greiner, Mark Cuban, and Daymond John, were out of the deal due to their lack of expertise in the tap drink market or concerns about scalability. Kevin ultimately saw the value in SquareKeg’s potential for the wine market and believed he could help the company succeed online.
