Outer Shark Tank Update – Terry Lin, Chief Design Officer, and Jiake Liu, CEO, co-founded Outer Patio in 2017. Terry earned a bachelor’s degree in design from the Rhode Island School of Design.
Terry and Jiake are interested in partnering with a Shark who would invest $750,000 in exchange for a 4% stake in the company. Outer has sold $800,000 in their first four months on the market, which are the only historical sales figures required to provide to the Sharks. The Sharks are initially perplexed by the valuation but quickly realize it is based on market size, not actual business projections.
Kevin O’Leary makes a $750,000 offer to Terry and Jiake in exchange for a 20% stake. Lori Greiner also extends an offer to them, which includes royalty until she recovers her investment. Lori counters and the two agree to a $750,000 loan in exchange for 5% equity. She will earn a $30 royalty on each unit sold until she recoups her investment of $1 million. The royalty will then expire, leaving her with only her equity percentage. They are pleased to collaborate with Lori, who specializes in consumer sales.
Jake is a University of Alabama graduate who has made a living investing in several start-up businesses as an angel investor. Both men remain in their current positions with the company.
The company’s concept began with an idea for a reimagined stylish outdoor sofa collection. While on vacation in China, Jiake visited an outdoor furniture manufacturer and was so impressed by what he saw that he surmised there was a market gap in the United States.
He envisioned an outdoor sofa with a removable outer shell cover that could be pulled over the seat cushions to protect it from the elements, including rain and UV rays. Along with being lightweight, it features handles that make bringing it inside when not in use a breeze.
As stated on the company website, we spend 90% of our time indoors, frequently unused backyards or patios—leaving any outdoor furniture to rust. And no one wants to sit on drenched cushions following rain. He reached out to Terry for inspiration via LinkedIn, and the two quickly set about developing the idea and company, with funding provided by their respective families.
Additionally, they developed the novel concept of paying existing customers a commission to showcase outdoor furniture to other potential customers in situations where a showroom is not available. They achieved a staggering $800,000 in sales in the first four months after going to market! With these impressive numbers, they decided to seek investment.