When Dallas founder Fran Harris walked out under the stage lights of the hit ABC show ‘Shark Tank,’ she was looking for an investment to get her CPG startup Electra Beverages off the ground.
A former WNBA player, Harris launched the Dallas- and Austin-based healthy sports drink startup this fall. The company currently has a line of sports drinks coming in three flavors and is preparing for production with a manufacturing facility in Coppell. She entered the Tank looking for a $350,000 investment.
“Consumers are not going to settle for a sports drink that over-promises and under-delivers, leaving you feeling tired and sluggish. You know why? Because there’s a new sports drink in town, and she’s got game,” Harris said on the show.
According to Electra, what sets it apart from the numerous other brands in the competitive sports drink market is its lack of artificial colors and ingredients and its blend of vitamins, amino acids and antioxidants. And that’s the point Harris used to start her pitch on ‘Shark Tank.’
“It’s safe to say I’ve consumed a lot of hydration and sports drinks, and I can tell you without a doubt that everyday athletes, hustlers and doers, what they’re looking for, Electra delivers on every single one of those,” Harris said.
Walking out on stage, each Shark got a taste of Electra, while Harris poured some of the main ingredients used in other sports drinks – sugar, salt and artificial coloring – into a large bucket.
For the most part, the Sharks all liked the flavor and concept. However, Dallas Mavericks owner and investor Mark Cuban quickly backed out of a deal, citing other sports drink partnerships he has through the Mavericks. However, he did say he liked the amount of potassium the drink has.
Fellow Shark Lori Greiner followed Cuban, saying that in general, the drink just wasn’t her “cup of tea.”
After that, other investors began grilling Harris with questions. Many were skeptical of Electra’s direct to consumer selling plans, citing shipping costs and other issues. Although Harris noted the company also has plans to look for retail partnerships. That challenge was enough to make investor Kevin O’Leary back out, especially after learning Electra had yet to begin production and make its first sale.
“You are running, and you want to take my $350,000 and experiment on it … you don’t have enough data to do that. I don’t want to discourage you, but I also don’t want to see you crash and burn,” O’Leary said on the show. “Any other category, any other product, anything else… I wish you the best, I really do, but I’m not taking this ride with you. I’m sorry. I’m out.”
Investor Daymond John agreed with O’Leary and also back out, leaving only Barbara Corcoran.
Initially, Corcoran seemed skeptical of Electra’s viability, agreeing with O’Leary about the sports drink CPG market's challenges and competition. She also noted that one of her first investments on the show was in a drink company that went under about a month after signing a funding deal. However, she ended up offering Harris $100,000 upfront, along with a $250,000 line of credit in exchange for a 40 percent stake in the company – a number that shocked many of the Sharks.
Countering with an offer for a 25 percent stake, Harris told Corcoran that she has two sports hall of famers who are ready to sign deals to promote the product. She didn’t reveal names, but it was enough to strike a deal. Eventually, Corcoran and Harris settled on the cash and credit offer for a 30 percent stake, contingent on bringing at least one of the hall of famers on board.
Harris left the stage cheering and doing a little dance, with plans to use the funding to invest in R&D and production and hiring in sales and marketing.
“There’s no question beverages are difficult, but all I’ve done all my life is win, and with Barbara on board, I know I’ll keep winning,” Harris said.
