Mark Cuban offers up to $500,000 to back Chicago-based inflatable lights startup
University of Chicago Booth School of Business teaches its students to question everything. That rigorous training came in handy when MBA student Andrea Sreshta and her business partner Anna Stork walked into the ABC TV show "Shark Tank" to seek funding for their inflatable solar-powered light startup.
After their pitch in front of millions of viewers, the co-founders of LuminAID received offers from all five investors, a rare achievement on the popular reality show.
Entrepreneur and billionaire investor Mark Cuban made the winning bid, offering $200,000 for a 15 percent stake in LuminAID plus an option to lead the next round of investing with $300,000.
It was Chicago Booth training that allowed Sreshta and Stork to score big on "Shark Tank," thinking quickly on their feet, fielding questions and analyzing the offers in a matter of minutes.
"I asked Booth classmates and friends to come to the Gleacher Center and pretend to be the five sharks and stress test us, help us prepare for those questions we may not have seen coming," Sreshta told Chicago Booth Magazine. "They would give us two or three hours in the evening. They asked us a lot tougher questions than the sharks did."
The grilling took the edge off when the founders entered the real "Shark Tank," Sreshta said. As the competition for a deal intensified, the entrepreneurs remained calm until Cuban jumped in with a strategic offer.
"Hold on, hold on," Cuban said, quieting his fellow investors. Turning to Sreshta and Stork, he asked, "How big can you make the inflatables? Because if you can make them big, that creates a whole new category."
Cuban understood the potential behind their idea, Sreshta said. She believed his offer would help LuminAID expand the sales organization, finance production and distribute around the world.
"We wanted to work with somebody who can help us differentiate our brand and help us stay competitive," Sreshta told Chicago Booth Magazine.
LuminAID was created in 2011 when Sreshta and Stork, both graduate students in architecture, wanted to design a product to help relief efforts after that massive earthquake in Haiti. They turned their class project into a humanitarian mission by inventing a solar-powered light that is inflatable and waterproof to help people in emergencies.
In 2012, LuminAID won the John Edwardson Social New Venture Challenge (SNVC), a yearly competition organized by the Chicago Booth's Social Enterprise Initiative and the Polsky Center for Entrepreneurship and Innovation. LuminAID also won the first-place prize of $100,000 in the 2013 Midwest Clean Energy Challenge, sponsored by the U.S. Department of Energy. It was also named an "Up-and-Comer" winner at the 2014 Chicago Innovation Awards.