First Blood - Part 2

Once. The distributor. We had a chance to take on another 400 stores. We couldn't agree on how much inventory to finance. I wanted to take the risk. I didn't want to put the company in debt. So you passed on 400 additional stores. We couldn't take on the inventory. That's not a demand problem. That's a capital problem. And a planning problem. Either way, it's fixable. I'll give you the 500,000 for 25%. 25 is a lot. It is, but I can put you in stores you can't get into yourselves. You wanted national distribution, that's what I'm offering. 25% is rather ambitious. Then make them a better offer. How much of your revenue is direct to consumer? 38%. And what are you spending to acquire those customers? Not much. How much is not much? About 40,000 last year. You did $646,000 online. Right. On 40,000 in acquisition spend? Approximately. They're under-investing online. They're under-investing everywhere. I'll give you 500,000 for 20%. I'll help with inventory, but I want to build the direct side aggressively. How? Bundles, limited releases, subscription, better retention. We've talked about subscription. You've talked about it. You have a profitable product, healthy margins, and repeat customers. I'll give you the 500,000 for 18%. What's your plan? Don't break what's already working. You're profitable, growing, nearly debt-free. I've been waiting 15 minutes for something terrible to happen. [chuckles] Sorry to disappoint you. So am I. [laughs] Okay. 12 months from now, what does Bad Decisions look like if we pick you? 3,000 stores, higher production capacity, better margins, controlled growth. Twice the direct revenue, and you'll know exactly who your customers are. Before the break, Darius and Nick received three competing offers for Bad Decisions. Bruce offered $500,000 for 25%, promising massive retail expansion. Clay offered the same investment for 20%, with a plan to grow their direct-to-consumer business. And Reginald came in with the lowest equity ask at 18%. Now, the partners must decide which investor can take Bad Decisions to the next level. 18's the best deal. On paper. Bruce gets us into stores. Clay gets what we're missing. You want Clay? I want Clay at Reginald's number. Then ask him. Clay, we like what you're bringing. If you'll do 500,000 for 17%, we'll make the deal with you right now. I'm at 20. Meet us halfway. 17 and a half. We have a deal? We have a deal. [sighs] Deal. Congratulations. Let's build something. That's the plan. Congratulations. Thank you, everybody. Try not to ruin it. [upbeat music]