Coatchex is another unique Shark Tank business. Derek Paque, the founder of the company, created a system that eliminates the claim check. Coatchex is expanding their brand with the new Chexology taking the coat check into other venues such as silent raves.
Derek Paqcue pitched Coatchex in Shark Tank at twenty-three years old, who recently graduated from Kelley School of Business at Indiana University. He notes that several famous people and politicians graduated from his school, including Mark Cuban.
Coatchex keeps you from losing your claim ticket
Coatchex evolved from Derek's experience losing his claim ticket and coat while being out with friends. He pitched the idea to his class, and Derek's professor liked the idea enough to become an investor.
Season: 4 Episode 1
First Run: 2012/09/13
Shark: Mark Cuban, Barbara Corcoran, Daymond John, Kevin O'Leary, Robert Herjavec
Company: CoatChex
Entrepreneurs: Derek Pacque
Ask: $200k for10% equity
Location: Indianapolis, Indiana
Deal: Offer, But No Deal
The saying, you are all-in fits for this Shark Tank pitch. Derek invested all of his savings, used money from family and friends and turned down great job offers to make Coatchex work.
Derek's Shark Tank pitch has him asking for $200,000 for 10% equity in Coatchex. Keep in mind; this is before he created Chexology, the additional brand of his original company.
A dilemma exists when people go to venues. They have to babysit their coats or worry about losing a coat check ticket. Venue operators do not like coat checks because they are too difficult to manage.
Coatchex solves numerous problems and creates new profit centers for venues. The system collects revenue by charging for services; the app has the credit card attached making it easy to manage the money. A picture of the property owner and the property itself is automatically entered, reducing theft/loss to a minimum.
Marketing departments will love Coatchex ability to capture client data.
Derek enters Shark Tank with his company having no sales, and a plan to sell franchise opportunities without proving the viability and reliability of the system. Mark Cuban proclaims that this is a horrible idea without testing his system.
What the Shark Tank Investors say about Coatchex
Daymond John calls Derek Paque a thief by asking for this much money. He explains that he has a patent on valet services, dry cleaners, baggage claims, and coat checks. Daymond says that he is out because he knows there are competitors in this space, and he believes Derek does not have enough knowledge in the marketplace.
Daymond seemed to really go after Derek as though he rubbed him the wrong way. It would be interesting to know more about Daymond's distaste for Derek and Coatchex.
Kevin O'Leary does not like seasonal businesses, so he is out. Barbara Corcoran thinks that the process is too cumbersome, and Derek responds telling Barbara Corcoran you will use your iPhone App to check in and out. Barbara is out of the deal.
Shark Tank's Robert Herjavec likes the idea and thinks there is an opportunity for universities. He has a problem with the two million dollar valuation. Derek says that he will negotiate the value of Coatchex.
Mark Cuban likes the idea, but Derek is going to have to make hard decisions. He wants to know if you are willing to make the hard choices. He says he will, and he is willing to listen.
Robert Herjavec asks Derek to make a different offer, so Derek goes to a $1.5 million valuation, and Robert says he is out.
Mark Cuban is the last Shark Tank investor who has not gone out. Mark thinks they need to take a step back because he doesn't have a track record. He needs to set up a series of locations that establish a track record. Mark makes an offer for $200,000 for 33% state in the company. Daymond thinks Mark is crazy.
Derek wants to talk to his business partner, so he gets on the phone with his professor who thinks he is giving away a lot of equity this early in the game. His professor said he would pass, don't do it.
Derek comes back saying you are right, I came in too early. He thinks he should continue to develop it further. He is turning down the offer from Mark Cuban. Derek counters at $200,000 for 20% and Mark Cuban responds no. Derek walks out without a deal from Mark Cuban.
My Take on Coatchex
I admit I've never lost a claim ticket that kept me from recovering my merchandise, but I have misplaced them, and the anxiety can be very uncomfortable. Chexology and Coatchex remove that stress of having to know where your ticket is at all times. Having your claim ticket tide to your iPhone is extremely convenient.
Chexology takes Coatchex to a new level
Quiet Raves are dance parties complete with DJ, dancing and a bunch of people gathering to have a great time. The catch is, there is no loud music blaring because everyone has headphones on. Quiet Raves uses Chexology to check out their headphones to Rave attendees.
Chexology handles the rental and security deposits for the headphones. And, now promoters can track and market to attendees using the data collected from the headphone rentals through Chexology. That's taking Coatchex to the next level.
Additional Funding for Chexology and Coatchex
The company received a capital infusion of $1.2 million shortly after Derek's appearance on Shark Tank. Now, Coatchex is available at events such as the Super Bowl, New York Fashion Week, and Mercedes Benz Fashion Week.