Why I Invested Alongside Mark Cuban in This History-Making Startup
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| By Chris Graebe |
I’m not one to brag, but I do like to share stories about some of the most successful startups I’ve invested in over the years.
My hope, as always, is for you to learn some of the same lessons these startup journeys have taught me.
The company I’m about to talk about is one of the fastest-growing and disruptive brands in the alcohol industry … and the drink of choice for millions of Millennials.
Here are a few highlights:
- Revenue grew from around $7 million in 2020 to $100 million in 2023.
- In 2023, the company sold 55.2 million units of its product.
- Today, it employs 174 full-time workers.
- When they aired on Shark Tank, Mark Cuban invested in this company!
Today, I’m breaking down my BeatBox Beverage deal.
So, without further ado, here’s how I found this startup, what pushed me over the edge to invest in it and, ultimately, where I believe it’s going!
As I already pointed out, Cuban invested in the company after the founders appeared on the hit TV show Shark Tank in 2015. I, on the other hand, invested in BeatBox a few years later.
Regardless of timing, we’re both winners because BeatBox is on the fast track to hitting a $1 billion-plus valuation. That would result in a massive payday for everyone who invested in the startup. But I’m getting ahead of myself.
Let’s go back to 2011 and the beginning …
3 Scrappy Founders & Their Bold Move
Three college students at the University of Austin in Texas — Justin Fenchel, Aimy Steadman and Brad Schultz — envisioned a ready-to-drink party punch that would appeal to 20-somethings.
The convenience and fun of a new alcoholic beverage available in so many flavors certainly whet the appetites of a very influential generation.
Fast forward to today, and BeatBox has evolved into an entirely new category of alcohol.
Experiencing that first-mover advantage in the space is huge and not very easy to do. Initially, the founders funded BeatBox by themselves — maxing out credit cards and running the business from their apartment.
They’ve been very transparent about how those initial years were some of the hardest along their journey. The company even came close to completely shutting down multiple times over the years. But this scrappy trio kept finding ways to keep the lights on and the engine moving forward.
Then came time to make the biggest decision about BeatBox in its short history: They applied for and then got accepted to appear on Shark Tank.
When they entered the tank, Brad, Aimy and Justin pitched the idea to the Sharks and asked for $1 million in return for 10% equity in their company.
Cuban didn’t bat an eye. He loved their scrappy story and saw major potential in the brand. Maybe it had something to do with the Texas connection. Whatever it was, he decided to invest a full $1 million.
Cuban’s investment immediately tagged Beatbox with a $1 million valuation. His capital and, more importantly, his guidance resulted in rapid growth.
Revenue grew quickly, hitting around $7.5 million a year in sales by 2020. That rose to $100 million by 2023. That’s mere pocket change compared to the company’s standard today.
BeatBox Beverage’s sales are projected to skyrocket to around $237 million this year. I’ll even drink to that!
Cuban’s connections helped BeatBox establish partnerships with major chains like Target, Walmart and Kroeger. Getting the product on all of these shelves nationally was not easy, but absolutely necessary. Distribution is key to any beverage company’s success.
As a result, BeatBox’s distribution expanded from a couple hundred stores to over 10,000 nationwide … and growing.
When I met the founders of BeatBox back in 2020, they still needed more cash to continue to grow their operations and fulfill their dreams. That’s when they decided to raise money from everyday investors like you and me — in other words, the crowd.
So, my team and I dove headfirst into the numbers. And let's be honest, we asked the hard questions.
We pried into their plan for profitability, which is always important to figure out. We examined their growth plan. We searched through countless spreadsheets of data to make sure they were spending their money reasonably and strategically.
After performing that due diligence, I flew to their headquarters and met them face-to-face … with boots on the ground. I wanted to shake their hands and find out what kind of founders and leaders they were.
The Path to Startup History
Now, I often get asked if I invested in BeatBox because of Cuban. While he added value to the company, we follow a process before investing in any startup. I need to make sure it has a solid plan, a solid team and, ultimately, a solid exit strategy.
Those attributes instilled the confidence that I — and anyone else who might invest alongside me — would see a return on our money.
My team’s due diligence process is very extensive, and I'm truly proud of it. After this thorough and time-intensive review, we liked what we saw and heard. We decided to invest in the company and raised around $1 million, at a $60 million valuation.
That cool million came from everyday investors, some who invested as little as a couple hundred dollars. That’s pretty cool to potentially own part of a billion-dollar company for an amount that won’t break most peoples’ banks.
This is why I love the world of equity crowdfunding so much. It opens the doors for everyday investors to be a part of the amazing startup world and successful companies like BeatBox Beverage.
So, what does all of this mean for those who invested alongside me in that same round? The story is still being written, of course. But with BeatBox doing around $100 million last year, that should put its current valuation around $700-$750 million.
That valuation didn’t only increase for the company but also for those who invested in the early stages.
Of course, we all know that markets can change, and businesses can stumble along the way. However, as we currently sit …
- BeatBox is poised to hit $1 billion in annual revenue by around 2028.
- If that happens, the company could garner a value of $5 billion to $7 billion (or higher) should it be acquired.
- That would make BeatBox the most successful startup in the history of crowdfunding.
I know I'm hoping for that to happen, and I'm sure those who invested alongside me are, too. Without a crystal ball, I don’t know for sure. But the company is certainly on track to hit those lofty, yet realistic, valuations.
Who doesn’t love a story about how three young, scrappy founders who disrupted a huge, established industry with the right product and right partnerships? Oh, and let’s be honest, a little luck always helps the cause.
Happy hunting,
Chris Graebe
P.S. Having a platform like Shark Tank can go a long way to success. But most early-stage startups don’t even need that.
In the cryptocurrency world, startup tokens and cryptos have already been able to make 205 times as much in investor returns than Bitcoin.
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