ChessUp is a product that utilizes technology to teach users how to play the game of chess. The built-in system can teach a complete newcomer how to play chess and which moves may be available for each of their pieces. The company came onto
Shark Tank ChessUp Update
- Entrepreneurs: Jeff Wigh and Adam Roush
- Business: Chess Game with AI Technology
- Ask: $300,000 for 5% equity
- Result: $300,000 for 5% equity plus a 3% royalty
- Sharks: Lori Greiner
Jeff Wigh and Adam Roush explained how their patented chess game uses advanced technology to serve as a training mechanism for new players. The problem is that the company had an implied valuation of $6 million. The sharks were very concerned about this valuation and wanted to learn more about ChessUp’s finances.
Level up your chess game. ChessUp is a high-tech electronic chess board with a built-in chess engine and chess instructor. This game board makes learning chess faster and easier by tracking your moves so you play by the book.
The margins were an important topic that came up during the negotiations. Jeff and Adam told the sharks that they sold a single unit for $399 and produced them for about $120 per unit. These two entrepreneurs also told the sharks that they had raised more than $1.7 million on Kickstarter during a crowdfunding campaign.
In terms of sales, they had all of the crowdfunding money plus an additional $400,000 in sales during 2022. Further, they were paying a royalty to a few other partners that were sucking a bit of money from the business.
Barbara Corcoran and Mark Cuban weren’t interested in making an investment, so they dropped out. Kevin O’Leary admitted that he was interested, but the royalty structure would be too complicated and almost not worth it, in the end, so he was out as well.
However, while sharks were dropping out, Jeff and Adam offered Lori Greiner a deal of 5% equity for $300,000 and a 3% royalty until she recouped 1.5x her investment and she quickly accepted.
Our ChessUp update is interesting because the appearance on
With Lori on the team, it’s likely that Jeff and Adam will be able to expand their marketing reach and continue to reach new customers, and grow the brand. We will be sure to let you know how it all shakes out in our next ChessUp update.
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