Max Nelson hopes to find a fit for Hood, his Merino wool baseball caps that celebrate localities, in Shark Tank episode 1521. Max is a realtor in the Los Angeles area. He went looking for a simple hat to wear one day and he emblazoned it with a logo that said “Brentwood,” the city he was doing a renovation project in. When he went into a store, the sales clerk suggested he get a Merino wool cap since they were nicer. He did just that and again emblazoned it with “Brentwood.”
His fellow realtors liked the hat and began asking if Max could get them one for themselves and as gifts. Soon he was manufacturing the Hood hats at a facility in New York City. At first he made hats with California community logos, Next he did a set of New York neighborhoods and he set up a website to sell them online. Things took off when Jay-Z started wearing a Hood hat with a “Bel Air” logo. Other celebrities enndorsed the product and things really took off for Max.
As for the hats, you can search to see if your city or neighborhood is in the vast inventory of Hood hats or you can customize one right on the website. There are also state logo hats, sports logo hats (not licensed) even “Swiftie” logo hats, plus many more. Hats cost $70 or as much as $90 for a custom hat. Max is likely looking for help with licensing and inventory.
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Posts about Hood Hat on Shark Tank Blog
Hood Hat Shark Tank Recap
Max enters the Shark Tank seeking $500,000 for 5% of his company. Hood Hat designs and manufactures the world’s finest customizable luxury ball caps. He created a category – luxury headware – but it’s more than that. Max believes that your neighborhood and where you’re from are essential to your culture and who you are. So he built custom hats for those people. Max’s hat says “Castleton Corners,” that’s where he grew up – in Staten Island, New York. The hat takes him back there, he never leaves it behind.
Max designed hats for each of the Sharks to celebrate where they’re from and where they grew up. Mark has a Mount Lebanon cap. Barbara has an Edgewater cap. Kevin’s says Mount Royal. Lori’s says North Side Chicago and Micael’s says Lafayette Hill. Hood sources the finest fabrics they can get their hands on from courdaroy to cashmere to gabardine then they empower you to tell the world where you’re from through customization. He’s already where the fish are swimming, but he needs a Shark to help him navigate deeper waters.
Q&A
Lori immediately questions the valuation. She says Max must have some big sales. He says he has $1.9 million in lifetime sales. Max started iin the spring of 2018 out of the trunk of his car. That year he had $18,000 in sales. In 2019 he moved into the guest bedroom and did $23,000 in sales. In 2020, after hearing customer feedback, he realized he had to design a customization platform and when he did, he did $364,000 in sales. 2021 had $508,000 in sales and 2022 saw $693,000 in sales. So far in 2023, he’s on track to do a little over $1 million in sales. Unfortunately, the company is not profitable yet.
Mark’s Merino wool cap costs $14 and change to make and it sells for $90. Max says his secret sauce is broadening the “offering suite.” He has gabardine, cashmere and more. Michael says he owns Lids, the largest hat retailer in the world. He sells 30-40 million hats per year. Lids customizes hats too, he wants to know how Hood can differentiate beyond the “luxury headwear” category.
Valuation
Kevin states that Max is asking for a 66 times multiplier on his valuation for a commodity business. Michael says it needs to be a $100 million company. Mark says they’re both telling him the same thing: that he overpriced his ask by a lot. Mark says he’s asking for half of thiis year’s revenue and says “that’s insane; I’m out.” Max tells the Sharks he did a note last year at a $7.5 million valuation. Kevin says he’s not worth even close to $10 million. The old Mr. Wonderful would have ripped Max to pieces, but Kevin’s been in anger management class; he’s out. Michael thinks there isn’t enough differentiation and the valuation is way off; he’s out. Lori thinks there’s a lot of competition; she’s out. Barbara doesn’t like the fact he hasn’t made any money; she’s out.
Hood Hat Shark Tank Update
The Shark Tank Blog constantly provides updates and follow-ups about entrepreneurs who have appeared on the Shark Tank TV show. As of the first re-run of this epissode in late July, 2024 – about 2 months after the original air date – there are no notable developments for this business. Read my Interview with Hood’s founder for some more info.
The Shark Tank Blog will follow-up on Hood Hat & Max Nelson as more details become available.
