The founders of Storage Scholars, Sam Chason and Matt Gronberg, went on ABC’s “Shark Tank” to ask for a $250,000 investment in exchange for a 5% stake in their company.
Mark Cuban paid his way through college with a variety of side hustles. On Friday’s episode of ABC’s “Shark Tank,” a pair of founders who started a company from their dorm room that helps college kids make extra cash struck a nerve with Cuban, prompting the billionaire investor to offer them a $250,000 investment deal.
Sam Chason and Matt Gronberg went to Wake Forest University together. In 2017, they started their own business called Storage Scholars. It started as a way to make extra cash to pay down their college debts: They charged their classmates to pack up their belongings and store them between school years.
Storage Scholars is a real business that runs at 48 schools all over the United States. Before they filmed their “Shark Tank” episode, it had already made $1.86 million in 2022. All of the people who pack and move the boxes for Storage Scholars are college students, so Chason said that the company is “creating high-paying jobs on campus.”
Gronberg told the Sharks, “When we were 18 and worried about getting into debt for college, we started Storage Scholars, which helped us all graduate debt-free.” He then asked, “Who’s ready to join us on our mission to help students across America do the same?”
Chason, who is 24, and Gronberg, who is 23, asked for a $250,000 investment in exchange for a 5% stake in the company. Several sharks were interested in what they had to say, but Chason and Gronberg seemed most eager to work with Cuba.
Gronberg told Cuban, “I know college debt is important to you because you’ve talked a lot about it.” In fact, Cuban has supported plans to lower student debt, such as President Biden’s recent plan to forgive some student loans, as a way to help young borrowers and boost the U.S. economy.
Chason said that when he went to Wake Forest, where tuition and housing cost more than $70,000 a year, he was worried that he might end up with a six-figure debt. Early on, the two went door-to-door in the Wake Forest dorms to find customers. Chason also said that the business only made $18,000 in its first year, which is a tiny amount compared to what it makes now.
Today, Storage Scholars’ service of packing, moving, and storing costs about $559 per student, according to the company’s founders. Part of the job is to deliver empty boxes, sellotape, and other packing supplies; pick up packages; store them over the summer; and deliver them to students’ new dorm rooms for the next school year.
All those services, including labor, cost Storage Scholars around $199 per move. After passing on offers from Kevin O’Leary and Daymond John, each of whom was willing to invest $250,000 for 20% stakes in the company, Chason and Gronberg mulled over Robert Herjavec’s offer of $500,000 for a 20% stake before listening to the Cuban pitch.
The Dallas Mavericks owner countered with a $250,000 offer for a 12% stake, which the Storage Scholars founders negotiated down to a 10% stake. That meant Cuban offered the same $2.5 million valuation as Herjavec but with half the investment capital.
Cuban argued that he could give the Storage Scholars founders “something you can’t get elsewhere.” “I’ve got a platform. There are schools that I have connections to, and if I get out there and start talking about them… the phone’s going to ring for you to open up new schools,” Cuban said. “That’s the value that I can bring.”
Ultimately, Chason and Gronberg agreed with Cuban’s argument that “it’s not just about the money,” and they sided with the Shark, who they felt best supported their company’s mission of building a successful business that can also help its workers chip away at their college debt. “We’re just over the moon,” Chason said of their deal with Cuba.