In 2012, Phil Dumas presented his company, UniKey on Shark Tank Season 3 Episode 12. Dumas Created his firm in 2010 to eliminate the need for the standard key for locks. His system utilizes virtual keys open your doors.
UniKey's appearance on Shark Tank opened the door to millions of dollars in venture capital, but not before having all of the Sharks making offers on his company the day before he is to negotiate with Black & Decker.
Ask: $500,000 for 33% equity
Venture Capital for UniKey
The first venture capital firm to place money UniKey is ff Venture Capital, a lead coming from a person who viewed Phil's episode of Shark Tank. Phil Dumas made a deal on Shark Tank but did not complete the transaction due to an inability to come to terms with due diligence.
Essentially, UniKey offers digital release of locks through mobile devices. In other words, you could have someone at your front door and you can program access through your mobile phone to let them in remotely. You may send an electronic key for single use, or a permanent key for residents of the home.
Other products include a KeyFob just like the automotive market, and TouchKey entry points coming soon. All of UniKey products require a change in hardware to communicate with the applications and electronic keys.
UniKey is coming to the automotive market according to the companies website.
Sharks on Phil Dumas Episode:
UniKey Deal Recap
Let's recap the UniKey Shark Tank episode. Phil Dumas informs the Sharks that he is negotiating with Black & Decker the day following his pitch. Phil shares he is an experienced veteran in the private equity field and that UniKey does not depend on a deal with Black & Decker. Many opportunities exist for UniKey.
Shark Kevin O'Leary offers to put up $100,000 with a contingency. Phil needs the other Sharks in at $100,000 each for 50% equity in the company.
Investor Robert Herjavec offers to go it alone giving him 1 million dollars in exchange for 75% equity in the company, and Phil Dumas keeps 25% equity contingent upon getting Black & Decker for proof of concept.
Barbara Corcoran steps up to the place offering $250,000 if Mark Cuban will go in for the other half with her.
Daymond John also goes in alone offering $500,000 for 40% equity with no contingencies.
Mark Cuban Dismisses Barbara Corcoran UniKey offer
And then Dallas Maverick's owner Mark Cuban tells Barbara Corcoran, “I love you Barbara, but this isn't your wheel strength.” He takes up Kevin's offer but modifies it saying he is putting up $400,000 for 45% of the company.
The negotiations are on with Phil Dumas asking mark to go down to 40% equity instead. Mark Cuban counters at 42.5%. Robert Herjavec advises Phil to think about this deal as he is giving him a lot more money.
Phil sweetens the offer to Mark Cuban offering him two board seats essentially giving him control of the board because Phil is the only other person on the board. Mark Cuban and Kevin O'Leary agree to the deal.
Kevin O'Leary tells Phil Dumas not to negotiate with Black & Decker without him in the room as he is leaving the Shark Tank stage.
UniKey Shark Deal Unravels
As stated previously, the deal with Mark Cuban and Kevin O'Leary did not come to fruition, but UniKey landed venture capital in two rounds since the show. As in many cases, the deals made on the show fall apart in due diligence like Phil's deal.
In the real world, venture capitalist and angel investors agree to invest in companies and then end up not completing a deal. Everyone does due diligence after the initial agreement, and that's where a lot of negotiations blow up. Sometimes it is the entrepreneur, and more frequently it is the investor that backs out.