Phoozy swam with the sharks and survived.
Kevin Conway and Josh Inglis, co-founders of the Charlotte-based startup, appeared on ABC's "Shark Tank" on Friday, where they pitched to investors Lori Greiner, Kevin O'Leary, Robert Herjavec, Daymond John and Mark Cuban.
Conway said, after a three-way bidding war between Greiner, O'Leary and Herjavec, they accepted an offer of $500,000 for an 8% stake in the company from Greiner and Herjavec, who decided to invest together. Phoozy will pay $1.50 per unit sold to the investors until the full amount is repaid.
Conway said they went into the pitch asking for $500,000 for a 10% stake.
"Robert and Lori were very passionate about the product," Conway said. "They liked the fact that we were able to give them real answers to all of their questions ... The way we've structured the business from the beginning had a large appeal to them and fit within the wheelhouse of their portfolios."
Conway and Inglis co-founded Phoozy in 2017. The startup manufactures thermal capsules that prevent handheld electronics from overheating in the sun and prolong battery life in extreme cold. The capsules also float in water and provide military-grade drop protection.
To start, the pair gave a 90-second pitch; they then did a climate-lab demonstration where John was able to go up on stage and test how well the product works in extreme temperatures. Finally, the pair fielded dozens of questions about things like product development and financials — questions they had prepared for ahead of time, practicing and focusing particularly on the numbers.
Conway said the word "intense" is the only way he can properly describe the experience.
"You don't really know what you're walking into when you step foot on that carpet and start your pitch," he said. "You're in a very vulnerable state ... It's a very good analogy, when people talk about them being sharks. It can be a bit of a frenzy as everyone is talking at once, making offers and asking questions."
Inglis said once they nailed the initial pitch, he knew they had a real chance of landing an investment.
"Everything came together after 15 months of applications and interviews, and when we get that first minute-and-a-half intro and got through it with no real flubs, I was like, 'Wow, OK, I can actually breathe now,'" he said. "If you mess up that first part, sometimes everything else goes sideways."
It wasn't until they left the stage, Inglis said, that the reality set in.
"It hit us, like, 'What just happened?'" he said. "There was so much energy and adrenaline ... I thought we did an amazing job. It wasn't perfect but overall, we were please with how we pitched [Phoozy] and how we were able to connect our story."
Conway said Greiner and Herjavecare are the perfect investors for Phoozy based on future plans for the startup. The bulk of the funds will be used to build out the team and begin scaling the company.
"Robert has a proven track record in his ability to scale companies, and Lori has had massive success in retail," he said. "They're great sharks to help us as we continue to scale our own operations."
Inglis and Conway have always believed in Phoozy, but Conway said he thinks securing a "Shark Tank" investment will quiet any naysayers.
"It was a great reminder of our tenacity and persistence," he said. "You'll always have some people who think you're absolutely crazy when you start your own business, so for us, it was a little bit of validation."
Conway added, "It's also great to be able to introduce new people to our product and vision. This is just the beginning for Phoozy, and in some ways it feels like us launching all over again."
