Matt Campbell and Adam Callinan know from experience that for beer drinkers, there's almost nothing worse than a warm beer. And it's their simple but smart solution to that problem landed their business, Bottlekeeper, a million-dollar-deal from Mark Cuban and Lori Greiner on Sunday on "Shark Tank."
"Mark and Lori have exceptional insight into the growth and best practices of hundreds of companies, and the guidance they'll be able to share — alongside their incredible networks and contacts — will be invaluable," Callinan tells CNBC Make It. "We're going to be investing heavily in inventory and are excited to introduce new products to our cold beer lovin' community over the course of the next year and beyond."
Bottlekeeper is a stainless steel bottle insulated with neoprene and padded so that it can hold a glass bottle, keep it cold and protect it from breaking if dropped. The bottom of the steel holder comes off so the beer bottle can be inserted and the top cap, which holds the bottle in place, has a bottle opener attached.
Within just the first 24 hours of Bottlekeeper's "Shark Tank" episode airing, the company saw a 300 percent spike in sales, according to Callinan.
Campbell and his cousin and co-founder Callinan first came up with the idea when Campbell was lounging on the beach trying to enjoy a beer. It was a hot day and within minutes, Campbell's brew was "simmering" in his red party cup, according to the brand's website. That's when he thought, Why not put a beer bottle in something like those stainless steel water bottles designed to keep water cold?
Bottlekeeper was born.
Campbell and Callinan, who handed out samples complete with cold beers to the Sharks, came to the Tank seeking $1 million in exchange for a 5 percent stake in the business, which launched in 2013.
That's "very aggressive, even on 'Shark Tank,'" Kevin O'Leary said of the $20 million valuation.
But the entrepreneurs said they had the sales to back it up. Callinan explained that (at the time of the taping in June) the company had done over $1 million in sales in the previous 10 days, $2 million in the previous 30 days and over $20 million over the last three years.
"Wait. Reel it back, say it again, slower," a shocked Greiner said, making the entrepreneurs repeat their impressive sales figures.
Campbell and Callinan explained that they needed an influx of capital and help scaling the company; they had over 3,000 U.S. retail stores on a wait list for product, Callinan said. (Currently, Bottlekeeper is only sold online.) The entrepreneurs said on the show that in the previous 12 months, the business has grossed $9 million and netted $400,000, as they had to spend a lot of money on shutting down knockoffs (they have patents) as well as marketing.
O'Leary bit, offering the business partners $250,000 for a 10 percent stake in the company and a $750,000 line of credit at 11 percent interest. Guest judge Alex Rodriguez jumped in, proposing to partner with O'Leary with a different offer: $500,000 for a 20 percent stake and a $500,000 line of credit at 11 percent interest.
But the entrepreneurs didn't want to give up that much of their company.
That's when Greiner started to express interest. Cuban tapped her on the shoulder and whispered in her ear.
"That was interesting," Greiner said of the exchange. She then offered Bottlekeeper a deal of $1 million for a 3 percent stake and a royalty of $3 per unit until $2 million is recouped.
The entrepreneurs countered $1 million for a 3 percent stake and a royalty of $1 per unit until $1.5 million is recouped.
"If you stay at the 5 percent, I'll do that deal," Cuban suddenly responded to the entrepreneurs' counter.
After some more back and forth among the investors and founders, Cuban has a final offer: Greiner and Cuban will go in together at $1 million for a 5 percent stake and a $1.50 per unit royalty to be paid until $2 million is recouped.
Done, the cousins said.
"That's what you get for giving beers," Greiner said, while Cuban joked, "Why is it I always drink myself into spending a million dollars?"
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Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank." This story has been updated to include comment from Bottlekeeper.