Rob Ludacer
A Harvard Business School graduate took a risky dig at billionaire venture capitalist Chris Sacca on a recent episode of "Shark Tank" - and it almost paid off.
College friends Jon Staff and Pete Davis recently appeared on the show to pitch their startup, Getaway, which rents out tiny houses in the woods for city-dwellers looking to unplug.
Staff and Davis, who have already raised $1.2 million in seed funding, walked on the show seeking a $500,000 investment for 5% equity at a valuation of $10 million.
ABC/"Shark Tank" screenshot
They set their sights on Sacca, a legendary angel investor who made early bets on Uber, Twitter, and Instagram- and shares the cofounders' love of the outdoors. The Upstate New York native owns two wood cabins on Lake Tahoe, in addition to an estate in Great Falls, Montana.
Davis took a shot at Sacca in what looked like an attempt to guilt him into an investment.
"You have brought and shepherded much technology into this world, and you know technology needs a counter-balance. We can provide a counter-balance," Davis said. "You can pay amends for helping bring Twitter into this world. And this is the anti-Twitter."
ABC/"Shark Tank" screenshot
It seemed to work. Sacca offered up $500,000 for 7.14% stake at a valuation of $7 million.
This would have been a better deal for Sacca than Gateway's prior investors had been offered. Staff and Davis worried taking Sacca's offer would irritate their most loyal backers, and ultimately turned it down.
Still, Staff, who is CEO, admits it was a tempting offer.
"You get caught up in it, for sure. ... Chris Sacca is a big deal. I didn't really know that fully. But all my Silicon Valley bro-friends are like, 'Chris Sacca, dude, like what!" Staff says, putting on a Southern California accent.
"But ultimately … it doesn't matter how famous you are, even if you can add more value because you're Chris Sacca. It's like, I have people who backed me from day one, when this was totally a crazy idea, and I can't give you a better deal than they're getting and go face them."
They walked away empty-handed.
thebearwalk.com
Sacca later tweeted that he was into the idea, but couldn't find evidence to support a $10 million valuation.
Within 24 hours of the episode's airing, 100,000 visitors came to Getaway's website, compared with its typical 1,000 to 3,300 visitors a day. The company also experienced an uptick in reservations. Davis said the company's half a dozen tiny houses are booked through the end of summer.
Getaway's houses, which range from 160 to 200 square feet, are located within two hour's drive of Boston and New York City. Each home comes with s'mores supplies, board games, heating and electricity, and the creature comforts of home. They rent for as little as $99 a night.
Staff and Davis hope to bring the cabins to 30 US cities by 2022.
I'm into the tiny houses. But these founders are tripping all over themselves trying to justify that valuation. Struggling. pic.twitter.com/zw6vltl0ay
- Chris Sacca (@sacca) January 28, 2017