The X-Craft drone meets the sharks

Subject: Culture
Type: Expository Essay
Pages: 2
Word count: 438
Topics: Drones, Entrepreneurship, Finance, Investment, Popular Culture

The shark tanks episode, Shark Tanks – All sharks on board for the first time! posted on YouTube gives an intriguing narration of two entrepreneurs meeting the five sharks in a bid to raise capital. The drone company, X-Craft is owned by Charles and J.D. The current essay aims at reviewing the episode with a view to shading light on why all the sharks bought into the X-Craft owner’s investment proposal.  Additionally, some accounting information about the company will be provided.

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The entrepreneurs asked the sharks to invest half a million dollars in their drone company (X-Craft). In exchange, the investors were to get 25 percent equity share in the company. Half the requested money was for upscaling production of their XPlusOne drone. The remaining amount was for finalizing the development of their other product, the Phonedrum. One of the sharks saw great potential for the application of the drone in various sectors of the American economy ranging from surveillance of property, gas and oil to security.

Initially, the owners had valued X-Craft at 2.5 million dollars but revised the figure to 10 million dollars after meeting the sharks. Recently, 30,000 XPlusOne drones have been sold through the company’s website. At a retail price of 1,800 dollars per drone, they made sales worth 54 million dollars. However, at a production cost of 400 dollars per unit means that their total cost for drones sold was 12 million dollars. Therefore, they made a profit of 42 million dollars. Consequently, the net operating income is 42 million dollars. Their fixed cost entail payment of salaries, rent and maintenance of their website. Currently, the company has 143,000 drones ready for sale. Accordingly, the projected sale is 257,400,000 dollars. The projected net income amounts to 200,200,000 dollars after deducting the total production cost.

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The Sharks’ interest in X-Craft was sparked when the entrepreneurs unveiled phonedrum. Additionally, their design admission that they have the capacity to patent their unique design prompted the first offer of 750,000 dollars for a 25 percent stake in their company. After offers and counter offers from all the sharks, the X-Craft owners reached a deal with all the sharks. The deal was to have syndicated equity where each shark would invest 1.5 million dollars for a five percent stake in the company. Consequently, the entrepreneurs managed to raise 7.5 million dollars in investment for a 25 percent stake in the company.

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  1. “Shark Tanks – All sharks on board for the first time!” YouTube, uploaded by Mz Tube, 10 March 2017.
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