Stake in a company that makes a safety device used in senior housing and multifamily housing communities was up for grabs on ABC’s “Shark Tank” program Jan. 5. The show features entrepreneurs pitching their products to five potential investors so that they can begin, expand or salvage their businesses.
Peter Thorpe, a Utah firefighter who invented FireAvert to prevent stove fires, appeared on the show seeking $300,000 in exchange for a 7% equity in his company.
“Every four and a half minutes, firefighters just like me respond to a home fire because somebody forgot about cooking food on the stove,” he told the panel, adding that such incidents are the top cause of house fires in the United States.
Once an electric stove is connected to a three- or four-pronged FireAvert box and the box is plugged into a wall outlet, Thorpe said, “When the smoke alarm sounds from the food starting to burn, FireAvert will cut the power to your stove, eliminating the source of heat and preventing any possible fire from starting.”
Thorpe told the panel that the product, which has been sold directly to senior housing and multifamily housing communities, has been on the market for 18 months and is expected to generate $2 million in sales this year. Stove fires, he said, are “a huge pain point” for community owners.
The panelists expressed appreciation for the product but were concerned that Thorpe already had given away too much equity in the company; Thorpe said he owns less than 30% equity and Jeff Burningham, founder and managing partner at Peak Ventures and Peak Capital Partners, owns a 60% stake. Thorpe credited Burningham with being helpful in strategizing and generating business for FireAvert.
After much discussion between Thorpe and the panelists, he and “Queen of QVC” Lori Greiner agreed to a deal whereby she will loan him $300,000 for a 10% royalty until $400,000 is repaid, at which time she will be given a 10% equity share in the company. As part of the arrangement, Thorpe agreed to reduce the price of the product. It normally sells for $195.99, although the company was offering a one-day “Shark Tank Special” of $99 on Jan. 6.
Thorpe said he wanted to work with Greiner because of her marketing and networking abilities.
The “Shark Tank” concept has been mimicked at recent conferences held by senior living-related organizations. The National Investment Center for Seniors Housing and Care, for instance, held a “NIC Technology Innovation Challenge” at its most recent annual meeting, and the Gerontological Society of American held a “Dolphin Tank” event at its 2015 conference.
Below: “Shark Tank” panelist Kevin O’Leary takes a product from Peter Thorpe as panelist Daymond John looks on.
— Shark Tank (@ABCSharkTank) January 6, 2016