Joe Altieri is a former window screen salesman and the president and creator of FlexScreen, a flexible alternative to traditional screens. Recently, he appeared on ABC’s hit show Shark Tank—where entrepreneurs pitch ideas to five big-name, big-money investors. He was asking for $800,000 for 6% of his company.
FlexScreen started in 2013, and took off rapidly. Year one, the company generated $400,000 in sales—a number that grew to $2 million just a year later, Altieri said. By 2018, he continued, FlexScreen’s annual revenue had increased to over $5 million.
However, Altieri has had trouble with profitability: While the screens sell for $11.50, they cost $10 to make. His gross margin, he said, was only $700,000, or “roughly” 15%.
The Sharks were flabbergasted. Shouldn’t your margins be higher?
“Window manufacturers can only get so much for a window,” Altieri told them. “The market is huge.” When pressed on the possibility of a sales premium, Altieri suggested that “window manufacturers are not terribly good marketers.” He told the Sharks that another challenge was that screens have to be custom-made for windows, and so can’t be mass produced.
Ultimately, despite their questions and reservations, the Sharks were interested. Altieri sold them on the idea that flexible screens are the way the market is going. When they become “the standard,” he wants FlexScreen to be the No. 1 option. The offers started coming one after the other, forcing the investors to counter each other’s bids. Altieri eventually accepted a deal from Lori Greiner, who has experience in the hardware space. He received $400,000 in cash and a $400,000 line of credit at 6% interest for a 10% stake in the company.