- Hi, I'm Emily Canal.
I'm Inc.'s resident Shark Tank expert,
and this is Tips from the Tank.
(upbeat music)
Ron, Taylor and Kobe Johnson were pitching their company,
Tailgate N Go.
- Tailgate N Go is a portable, modular outdoor kitchen
and dry box that you can take anywhere:
camping, fishing, tailgating, any outdoor adventure.
- Ron, Taylor, and Kobe Johnson were seeking
250 thousand dollars for 10% of their business.
They were very early to Shark Tank.
They had been in business for about a year and a half
and had sold about 100 of their boxes through trade shows.
Also, Kobe is the first entrepreneur in Shark Tank
to communicate with the Sharks via signing.
- [Interpreter] Tailgate N Go is a one-of-a-kind product.
There's nothing like it in the marketplace.
- So, Sharks, let's all think outside the box
and start an outdoor revolution.
- So the Sharks really liked the idea of their business.
They thought it was very creative,
and they have two patents which also impressed them,
but they did think that the entrepreneurs were there
a little bit too early.
- I always like to kind of know what's the landscape
before I invest in something
that's so at the beginning stages.
- [Matt] To me, I think you're actually
just here a little bit early.
- They knew with these kind of products
that have a lot of innovation to them and a lot of building
that there's gonna be glitches and kinks
that you have to solve and work out through trial and error.
Guest Shark Matt Higgings who's also Vice Chairman
of the Miami Dolphins, he noted that he spends a lot of time
at tailgate parties and that a lot of people who go there
already have their gear.
They have their equipment and their setup,
so they might be less inclined to spend a lot of money
on a product like this.
Kevin O'Leary was the first and only shark to make an offer,
and it was very true to Kevin O'Leary
and also very, very bad.
- I'll give you the 250 line of credit.
I want a 10% interest on it.
I want the 10% equity if somebody buys you out,
and I want $100 royalty per unit against the 250.
(Sharks groaning and grumbling)
I don't hear any other offers.
- He made an offer that you could tell the entrepreneurs
didn't wanna do from the start.
They actually didn't even address it
until Kevin pressed them for an answer,
and they had to politely decline.
It was an awful, awful deal for them.
They're gonna leave the tank, they're thanking everybody
for their time in the tank, and, you know,
they're so proud of what they've accomplished.
As they're about to leave, Daymond John tells them--
- You guys could have countered.
- And this is when the family huddles, regroups,
and instead of pitching Kevin O'Leary and his crap offer,
they go after Matt Higgins
who has the experience tailgating,
and say to him like we want to make a deal with you.
Matt Higgins was a better Shark for them.
They end up closing a deal with him for 250 thousand dollars
for 20% of the business, plus a $50 royalty
until his initial investment is recouped.
I have three takeaways from this episode.
The first is time your pitch.
This family had a great company and a great idea,
and they did have a proof of concept,
but it was still a little too early for them.
Granted sometimes meetings can come up,
and you don't get to always dictate when you get to go.
However, they should have been able to show the Sharks
that while they were still early, they had options to scale.
Here's how they were going to do it.
Here was how they were going to make it cheaper.
They touched on that with mentioning the fact
that they wanted to go into plastic over metal,
but there were holes in their pitch that weren't answered,
and I think that left some uncertainty for the Sharks.
If you're going into a investor meeting like Shark Tank,
think about maybe lowering your valuation,
so it doesn't seem too high,
and also think about how you can show them
how you're growing.
Even if you don't have a lot of business yet,
show them the options and the optics
that could lead to future growth.
The second takeaway is know who you want.
Despite the fact that Kevin O'Leary
was the only one who offered them a deal,
after Daymond John recommended that they counter,
they did not even look at Kevin.
They looked past his awful deal and right to Matt,
and they were like, Matt, we want to make a deal with you.
You know our business.
You can help our business.
Kevin doesn't have that expertise.
He doesn't camp.
He doesn't get it.
He wasn't the right Shark for them.
So Matt Higgins was, and they went after him,
and they closed a deal really quickly.
I think it impressed Matt Higgings
that they knew that they wanted him,
they weren't faffing around.
And the third takeaway is counter.
Don't lose this opportunity.
Push for something else, a little less equity,
a little more money, or even just a deal at all.
I can't say this enough, but if you have this experience,
you have this opportunity, don't screw it up.
Ask for something.
Do it politely and push hard.
I'm Emily Canal.
This was Tips from the Tank,
and remember, always counter.