Let me tell you a story about how a lost coat sparked the creation of a multi-million-dollar tech company. It’s a story of innovation, resilience, and the power of saying “no” at the right time. This is the journey of CoatChex, now known as Chexology, and its rise from an Indiana bar to becoming a global leader in digital hospitality solutions.
The Beginning: A Coat and a Lightbulb Moment
It all started on a cold Indiana night when Derek Pacqué, then a student at Indiana University’s Kelley School of Business, lost his coat at a bar. Frustrated by the lack of coat-check services, he asked the bar owner why such systems weren’t available. The response was simple: traditional coat checks were inefficient, prone to ticket loss, and costly to manage. That conversation planted a seed in Derek’s mind.
Determined to solve this problem, Derek developed CoatChex—a ticketless coat-check system that used photo identification and digital tracking to eliminate the need for paper tickets. Customers could check in their coats using their phone numbers and have their items securely stored without worrying about misplaced claim tickets. This simple yet innovative idea would soon revolutionize the coat-check industry.
The Shark Tank Experience: A Bold Pitch
In September 2012, Derek stepped into the spotlight during the Season 4 premiere of Shark Tank. Armed with his ticketless coat-check system and boundless energy, he pitched CoatChex to the sharks. His ask? $200,000 for 10% equity in his company, valuing it at $2 million.
The Pitch Highlights
Derek’s pitch was memorable for its creativity and humor. He used props like a coat on a leash and even showered confetti to grab attention. Despite his enthusiasm, the sharks had mixed reactions:
- Mark Cuban criticized Derek’s franchising model as “horrible.”
- Kevin O’Leary dismissed it as too seasonal.
- Barbara Corcoran questioned whether it was enough of an upgrade over existing systems.
- Daymond John felt Derek wasn’t knowledgeable enough about his business.
- Robert Herjavec balked at the valuation but liked the concept.
Mark Cuban eventually offered $200,000 for 33% equity. Derek countered with 20%, but Mark declined. Ultimately, no deal was made.
The Decision to Walk Away
Turning down Mark Cuban might seem like a risky move for any entrepreneur, especially one with no sales at the time. However, Derek believed that retaining control over his young company was crucial for its long-term success. In hindsight, it was a bold but wise decision.
Post-Shark Tank: Building Momentum
Walking away from Shark Tank without a deal didn’t spell doom for CoatChex—in fact, it was just the beginning. The exposure from the show proved invaluable as Derek focused on building his business.
Key Milestones
- Rebranding to Chexology (2015): As the company expanded its services beyond coat checks to include luggage storage, valet systems, and rental management, it rebranded as Chexology to reflect its broader mission.
- Seed Funding: In 2015, Chexology secured $1.2 million in seed funding to fuel its growth.
- Major Partnerships: The company landed deals with high-profile clients like Madison Square Garden, Lincoln Center, Nike, Delta Airlines, and American Express.
- Technology Innovations: Chexology introduced features like ChexPass—a digital claim ticket integrated with Apple Wallet and Google Pay—to streamline check-in/check-out processes further.
A Data-Rich Overview
Here’s a detailed snapshot of CoatChex/Chexology’s journey:
| Category | Details |
|---|---|
| Product Name | CoatChex (rebranded as Chexology) |
| Founders | Derek Pacqué |
| Season & Episode | Season 4, Episode 1 |
| Ask (Investment & Equity) | $200,000 for 10% |
| Final Deal | No deal |
| Shark(s) Involved | None |
| Memorable Episode Moments | Mark Cuban’s critique of franchising |
| Current Net Worth | Estimated between $1M–$10M annually |
| Current Business Status | Active (rebranded as Chexology) |
| Revenue Since Shark Tank | Estimated $7 million annually (2023) |
| Social Media Presence | Active on Instagram and other platforms |
| Key Achievements | Partnerships with Nike, Delta Airlines; presence at events like New York Fashion Week |
Expanding Horizons: Beyond Coat Checks
Chexology didn’t stop at solving coat-check inefficiencies; it ventured into other industries where short-term storage solutions were needed.
Diverse Applications
- Luggage Storage: Partnered with airlines like JetBlue to allow passengers to store winter gear before tropical vacations.
- Valet Systems: Modernized valet parking experiences by eliminating paper tickets.
- Event Rentals: Simplified headphone rentals for events like Quiet Raves.
Client Success Stories
One notable success was its collaboration with New York’s Museum of Modern Art (MoMA). Chexology designed a custom dry-cleaner-style carousel integrated with its app to reduce wait times during MoMA’s Free Admission Day. The result? Smoother operations and record-breaking attendance.
The Present: A Thriving Business
As of January 2025:
- Chexology generates approximately $7 million in annual revenue.
- It serves clients across industries including hospitality, entertainment, and retail.
- Its technology is trusted by global brands like Nike and Live Nation.
The company continues to innovate by integrating data analytics into its platform. Businesses using Chexology gain insights into customer behavior—such as dwell time and transaction speed—enabling smarter decision-making.
Lessons from CoatChex’s Journey
Reflecting on this story offers valuable lessons for entrepreneurs:
- Exposure Matters: Even without securing a deal on Shark Tank, the visibility helped launch CoatChex into new markets.
- Retaining Control: Turning down Mark Cuban allowed Derek to steer his company without significant equity dilution.
- Adaptability is Key: By rebranding and diversifying its offerings, Chexology stayed relevant in an ever-changing market.
Looking Ahead: The Future of Chexology
The possibilities for Chexology are endless. With its focus on innovation and customer-centric solutions, the company is poised for continued growth in hospitality technology. Whether it’s modernizing valet services or introducing new rental solutions, Chexology is well-positioned to lead the charge.
As I think about Derek Pacqué’s journey—from losing his coat in an Indiana bar to creating a global tech company—I’m reminded that every setback can be an opportunity in disguise. For aspiring entrepreneurs out there: sometimes saying “no” can be your greatest yes!