Keen Home co-founders Ryan Fant and Nayeem Hussain entered the Tank asking for $750,000 for 10% of Keen Home, their internet-connected HVAC vent business. The Keen Home Smart Vents, with help from a mobile app, help redirect airflow to rooms that need more or less heat or air conditioning at a given moment. (Though the setup would later include temperature sensors, they were not part of the package at the time.)

Kevin O’Leary was skeptical of the valuation, as their outside funding to date had valued the company closer to $5 million, but the news that 35,000 units had been pre-sold to Lowe’s — albeit with two years of exclusivity in the home improvement space — helped explain that. Mark Cuban opted out because he felt the vents were more a feature than a product while being too far away from licensing it to a bigger company, as did Lori Greiner, who thought the product was too confusing.

O’Leary offered $750,000 for 25%, feeling there hadn’t been enough growth for the asking price, while Daymond John matched the offer with the caveat he wanted manufacturing rights, only to later lower it to 20%. Robert Herjavec wasn’t troubled by Mark’s “feature” assessment and offered $750,000 for 20%, and at that point, the discussion shifted to how Fant and Hussain didn’t want to do a “down round” or sell at a lower valuation than the last investor bought in at. So Kevin shifted to a 36-month $750,000 loan at 8.5% for 10% equity, and Lori was willing to split that deal, but then Robert countered with $750,000 for 13% (just under a $5.8 million valuation), which was accepted.

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By mrtrv

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