Fixed is a company that has an exciting service, and presents on Shark Tank in Season 7. The company who ended up acquired agreed to a deal with Mark Cuban. Kevin O'Leary rightly spoke about fighting the government, which Fixed experienced.

What happened is that local municipalities unplugged their fax machines to keep Fixed from submitting parking ticket protest. The company could have come up with a workaround, but it was not economically feasible.

The company switched to fighting traffic tickets only to have bar associations come after them for practicing law, which led to an acquisition by a law firm that is also a technology company. The deal was only for the technology, and none of the employees went with the agreement.

Season: 7 Episode 714
First Run: 2016/1/15
Shark: Mark Cuban, Kevin O'Leary, Lori Greiner, Robert Herjavec, Chris Sacca
Company: Fixed
Entrepreneurs: David Hegarty
Ask: $700k for 5% equity
Deal: Mark Cuban

Did you know there is over $100,000,000 spent on legal services each year? That makes a vast market. David believes their revenue will go from $80,000 to $11 million next year. That number proves to be far-reaching.

 

Mark Cuban investment in Fixed

Did Mark Cuban complete the investment in Fixed? I can't find any information to date saying he either did or did not finalize the agreement to invest.

Initially, Fixed focused on administrative issues to get parking tickets dismissed. Twenty to thirty percent of the parking tickets submitted have fines dismissed, allowing Fixed to charge a 35% success fee. They have a convenience fee of $1.95 for paying parking tickets not rejected.

Fixed came up with an app that photographs your ticket. Fixed runs it through their algorithm looking for errors on the parking ticket and then submits them to the municipality that issued the citation. Average parking tickets are in the range of $70.

Revenues during the year presented are $80,000 leading up to the Shark Tank presentation. David claims the average ticket makes between $5-6 in revenue. However, the acquisition cost of getting the customer is the same.

You might think that a person would be crazy to spend their revenue acquiring customers, and in most situations that is true, but companies like GoDaddy also put their company revenue directly into customer acquisition to build their base. That's how they became the multi-billion dollar company, earning Bob Parsons a 2.5 billion dollar payout.

Ultimately it is the retention rate that creates the profit in this type model, and Fixed's retention rate exceeds 75%.

The cost of acquisition is on hiring people to follow street cleaning vehicles and place flyers on cars that have tickets.

 

So what do the Sharks say about Fixed?

Chris Sacca is out, he does not think there are enough people who will use this service, and car ownership is going away. I don't see car ownership going away in most parts of the country, just the bigger cities.

Robert Herjavec does not buy into the scalability of the business, and he goes out.

Kevin is out because he doesn't want to take on government.

Lori likes the idea but thinks they are just starting to fight a massive battle, so she is out.

Mark offers $700,000 for 7%, and 2% of the 7% is for advisement fees.
He can email Mark anytime night or day and will get an email almost instantly. They have a deal.