Mark Cuban invests $1M in Austin startup after 'Shark Tank' appearance

Austin boxed cocktail startup BeatBox Beverages secured a $1 million investment for a one-third stake in the company from entrepreneur Mark Cuban during an episode of ABC's "Shark Tank" that aired Friday night.

Company officials said they have been flooded with calls since the episode aired from companies looking to distribute their products.

The capital from the Dallas billionaire will help the company, which launched in 2013 and has yet to reach $1 million in total revenue, expand quickly through both online sales and distribution in all 50 states.

Justin Fenchel, a founder and CEO of BeatBox, told Austin Business Journal in an interview Saturday that Cuban was the top target for his company's pitch when they taped the episode in June. A three-hour strategy session with Cuban this summer followed up by weekly calls and regular emails has shown him to be an involved and interested adviser, which markets wine-based cocktails in a box to young adults.

Cuban's investment will also help the company pay for increased production and efforts to market the beverages throughout Texas and the southwestern U.S. before expanding nationally.

Fenchel said he and his partners went into their pitch session seeking a $200,000 investment for a 10 percent stake, with the goal of luring Cuban into a bigger bid since "he doesn't get out of bed for a 10 percent stake."

That gambit led Cuban to counter with a $600,000 offer for one third of the company, with Fenchel upping the ask to $1 million for 33 percent, increasing the company's valuation to $3 million in the process.

"We knew Mark was our guy all along because he's a genius and he gets that we're not just selling drinks, we're selling fun," he said. "Since then he's been way more hands on than I ever would have dreamed of."

Chad Swiatecki covers Austin's creative industries, health care and education.