[Leslie Hsu and Greg Besner celebrate their "Shark Tank" victory in Friday's episode.Christopher Willard | ABC]Update March 21: After “Shark Tank” aired, Greg Besner told NJ Advance Media that Sunflow had further negotiations on the $1 million offer. Besner and Leslie Hsu, who first spoke to NJ Advance Media before the show aired, were barred from talking about the negotiations. The deal ended up falling through after the taping of the show in July.The company subsequently raised $3.5 million from its investors (more below).
Leslie Hsu has always been a beach person. In fact, Hsu and her husband, Greg Besner, are getting ready to move to one of their favorite Shore spots — Spring Lake. They’ll have a growing beach chair brand in tow ... a brand that nearly got a million-dollar boost on “Shark Tank.”
Hsu and Besner, who live in Short Hills, own the Sunflow beach chair company, with Leslie managing design and Greg overseeing marketing.The beginnings of the brand took shape when Hsu thought of all the times she had to lug beach gear to the sand.
“The chair would open and close,” she says.
Dragging the unwieldy beach perch was just that — a drag.
“That’s when the idea came that we should really clean up this whole exercise,” Hsu, 50, tells NJ Advance Media. She grew up in Potomac, Maryland and will sink her toes into the sand whenever and wherever she can.
Hsu wanted to build a better beach chair, one that wasn’t messy in its portability but also aesthetically pleasing. She brought her decades of experience working in handbag design and licensing — where she regularly merged fashion and function — to the effort.
The result was a chair that could be easily secured and strapped to a beachgoer’s back without hassle. Hsu devised add-on accessories like a sunshade, drink holder and waterproof bag to secure phones, wallets and keys.
“The fact that consumers responded so well was humbling and so satisfying,” says Besner, 56, who grew up on the beach in Margate and has lived with Hsu and their family in Short Hills for 11 years, and before that, in Millburn for 11 years.
Hsu and Besner began selling their Sunflow chairs online, but also tested the viability of the business at pop-up stores in The Mall at Short Hills and the Hamptons.
For six months, from the 2020 holiday season to Memorial Day weekend in 2021, the married team worked at the Short Hills store with their two daughters, Willa, 20, a student at James Madison University in Virginia, and Lana, 18, a student at Millburn High.
There and in the Hamptons store, which they opened in the summer of 2020, customers had one refrain:
You should go on “Shark Tank.”
So they did.
Bringing the product to a bigger stage seemed like a good plan. After all, they had watched as the chairs proved to be a success in limited retail operation.
Besner and Hsu signed a nondisclosure agreement saying they would not reveal details of negotiations on the show before it aired, and saying they would not talk about negotiations with “Shark Tank” investors after the show.
After the deal they minted with O’Leary fell through, their existing investors, who knew about the “Shark Tank” negotiations, provided $3.5 million, even more than their TV deal. There was nothing in the episode that indicated the deal did not proceed as planned, but Besner notes that it’s a common occurrence when the verbal promises on TV are not binding.
“Fortunately our business was very attractive to other investors,” he says.
[A Sunflow beach chair with sunshade, dry bag and drink holder attachments.]
Customers either buy the Sunflow beach chair for $198 and pay extra for accessories and attachments (the sun shade is $48), or go for a $296 beach bundle that includes the chair, sun shade, drink holder, dry bag for valuables and a towel.
Why are people willing to pay more for a chance at a better beach chair?
Hsu and Besner, who taped the “Shark Tank” episode in July, say shifting perspectives on work and rest during the COVID-19 pandemic helped their product.
“People care so much about their work-life balance,” Besner says, which might also be why they are willing to invest in quality gear for skiing or camping.
“I think it just resonates at this time where people are (working) 24/7, so when they have that earned time, having an experience that feels worthwhile,” Besner says.
He previously founded a business called CultureIQ with the aim of helping companies figure out work-life balance. Besner left to start Sunflow with Hsu.
Before Sunflow, Hsu designed bags but also started a personal shopper business and worked in interior design, offering room makeovers on a budget.
From idea to market, Sunflow’s launch took about three and a half years.
“I’m really, really happy that people responded to what we designed,” Hsu says. “It was a risk.”
The expanding line is intended not just for beaches but also anywhere a portable chair can be used: parks, pools, lakes, backyards and other places.
Hsu is working on a beach pillow and some other products, along with a broader range of colors.
Here’s how the “Shark Tank” segment played out.
Hsu and Besner arrived wearing beachy attire, seeking $1 million from the sharks for 6% equity in the business.
“Beach gear hasn’t changed for 100 years,” Besner said in the pitch.
“True,” said shark Barbara Corcoran.
Besner said that after launching the beach chair line 13 months prior, they had $2.9 million in direct-to-consumer sales.
“We’re on track to grow 409% this year,” he said
Shark Mark Cuban offered his congratulations and wanted to know the price of each chair, which is $198 without any accessories.
“It seems high,” said guest shark Daniel Lubetzky, founder of the Kind snack company.Besner answered his concern by saying that they sell three accessories for every chair. Hsu talked about her family background — her parents came to the United States from Taiwan 50 years ago with a small piece of gold in a toothpaste tube. Her father, who built his construction business into a multimillion dollar company, died about a week before the taping of the “Shark Tank” episode.
“He’d be so proud,” she said.
Hsu told the sharks that she has more than just accessories in the pipeline for the beach brand. Future products include a higher chair (for other settings, like tailgating), table and lounger.
Lubetzky made the first offer: $1 million for a 22.5% stake in the business, which was almost four times what they brought to the negotiation table. Besner claimed that Sunflow will grow to be a $100 million-plus business — in 2021, it was due to bring in $4 million; the goal in 2022 is $10 million.
But Lubetzky was visibly impatient. Hsu and Besner didn’t give a counter offer quickly enough, so he was out. In quick succession, so were sharks Cuban, Corcoran and Lori Greiner.
That left “Mr. Wonderful,” Kevin O’Leary. He offered $1 million for a 4% stake — less than Hsu and Besner originally offered. But he wanted a royalty of $5 per chair until he recoups $2 million from the deal.
Besner rejected the offer as “too aggressive,” countering with $5 a chair up to $1 million. Cuban encouraged O’Leary to accept.
O’Leary countered again with a 6% stake — the original percentage — and royalty of $5 a chair up to $1 million. Hsu and Besner countered that offer with a 5% stake for the same royalty per chair.
“Done,” O’Leary said.
Original article can be found here.