Tuesday, December 15, 2015

The Profit - KOTA Longboards Update

Tonight on The Profit Marcus Lemonis is in Denver, Colorado with hopes of making a deal with KOTA Longboards.  KOTA Longboards is a skateboard company owned by former US Navy pilot Mike Maloney that specializes in handcrafted high quality longboards.  The problems the company faces include a high employee turnover rate and a limited production line.  Also, Marcus brings in skateboarding legend and entrepreneur Rob Dyrdek to offer some advice on this episode.

Let's take a look at some information related to KOTA Longboards as well as what kind of deal was made on the show.

News and Links Related To The Company: 
  • Here are some preview videos of the episode from the CNBC website - Video 1, Video 2, Video 3, Video 4, Video 5, Extended Sneak Peak.
  • Here is the KOTA Longboards website and here is their Facebook Page.
  • KOTA stands for Knights of the Air .
  • The company was started in 2012 when Mike lost his job and decided to start the company.  He thought longboards should appeal to a larger demographic.
  • In January 2015, KOTA Longboards won a $150,000 grant from Chase.  The grant was one of 20 (out of 25,000 applicants) awarded by Chase and the grant aims to help entrepreneurs take their business to the next level (Link).
  • In that article, Mike said business increased 240 percent in 2014, and he has a broad target demographic of 10- to 60-year-olds, 40 percent of them female.
  • The company had a Kickstarter campaign in June 2015 to try to raise $56,000 for a custom CNC machine that screws trucks on the bottom of the longboards. They fell short by only raising $12,300. (Link)
  • The company does a lot of work with military charities and hires a lot of veterans.
  • KOTA longboards are available for sale on Amazon.com.

The Deal From The Episode Plus Post-Show Updates (this will be updated continually):
  • The Deal - $300,000 for 40% of the business to be used to pay Josh his $50,000 back and the rest would to go towards working capital.  The 40% of the business would be divided up where Marcus gets 25%, Chris gets 5%, Sandy gets 5%, and Josh gets 5%.  Marcus is 100% in charge.
  • When Marcus came back, Mike wanted to renegotiate a deal and Chris had quit.  Mike wanted to only give up 10% to the employees.  Marcus countered with 35% for himself if the employees were only getting 10%.  They finally settled on the original deal again. 
  • Marcus ended up walking out on the deal due to Mike and the high employee turnover rate.
  • The price point for the boards is still $329 for a finished board on the KOTA website and there is no smaller version of the longboard available.

*To see how all of the businesses from The Profit are doing, go to the The Profit Updates page, and also Like us on Facebook or Follow Us on Twitter  to stay up to date with all things involving The Profit

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