I love watching the show Shark Tank. And occasionally I'm shocked because
business owners make some crazy mistakes. So, first in this video, I'm going to
introduce you to one of my very favorite shark. Somebody that I would love to
partner with. And then somebody who totally blew it and passed up an amazing
opportunity to partner with. Then I'm going to show you a company that goes
before the Sharks. And I don't really think they understand how valuable these
sharks are and what they can do for their business. And you've got to see
what happens there. And you know, the retired basketball player Charles
Barkley is a shark. He's actually a very smart investor. And you'll be surprised
what happens there. Okay, then a lady comes along who really does understand
the value of the structure. She really wants to partner with one and there's a twist
ending on that one.
Okay. Then I've got one more awesome one and one crazy one. The awesome one, it
seems like all the Sharks one in on this deal. And the 2 guys kind of recognized
that they really have a good opportunity here. You've got to see how that one ends
up. And then there's this crazy offer. I've never seen any offer like this on
Shark Tank before and I don't think I'll see anything like this again.
Okay. So again, this first one Robert Herjavec. He's one of my favorite sharks.
It would be a dream to partner with him in business. And the ending of this one
really, really surprised me. -Robert Herjavec, the son of an immigrant
factory worker is now a technology mogul who sold his first Internet companies
for over 350 million dollars. -Okay. So, that's Robert. Now, this couple, they make
this flaxseed hair gel product. The Sharks are impressed and they want to
invest. -We didn't grow at all. We would make 115 for the next 12 months.
-Now, in order for a shark to make money, this investor, you know, they're investing
their money. They have to have a significant amount of ownership in the
company in order for the it to be worth it. They have to know that they're gonna
make a return on their money. Now Robert offered to give them $400,000.
And he didn't require to be a 50/50 partner. 400,000 for 20%.
I'm not going to change that. -So, to me, this is a huge opportunity. They get a
partner with somebody who's made hundreds of millions of dollars in
business. And they get a retain 80% of their company which means 80% of the
profits go to them. And Robert will be paying $400,000 to them for that. -Yes,
which is why I need 20% today. -And you're getting a Shark.
-They showed hesitation and another Shark kind of had to chime in and say like, "And
you're getting a shark." You know, like to emphasize do you realize what you've
been offered here. So, in my mind, I'm thinking, "Yeah, they've got to say yes to
this deal." But watch what happens.
-Sorry Robert. So, I think they blew it. I think they passed up a real big
opportunity. They've never taken a company big-time before. I do think their
company will succeed. I think they'll grow but I think they're going to grow
gradually. They'll be able to keep 100% of six-figure revenue
instead of 80 percent of multiple 7-figure revenue. The next company I
want to show you it's called a Terneva, they take ashes from like a cremation
and they turn it into diamonds. So, you have a keepsake that you can wear or
something. So, Mark Cuban makes them an offer. -I actually love what you're doing.
What I can't get my arms around is how how serious you are about one of us as
an investor. -We're here to negotiate more. We would love to have you our team. -Then
I'll make you an offer. $600,000 for 15%. -He's making a pretty
significant investment. He's offered $600,000 and in order for his time to be
worthwhile he needs 15% equity in the company.
Now, the countered saying they only wanted to give him 6% of their company
for that investment and the Sharks begin to wonder if they really are there to
make a deal or not. Proving my point about why you're here.
You know... -No. I mean we would love to have you guys. -I understand what Mark is
saying in he may be right. But it's a great business. -Even Robert began to
question. I mean he saw value in their business but he wondered if they really
wanted to make a deal with him. -All I can speak to that with is my offer. Because
if you value us, you've got to pay a premium for that. So, Robert did put in an
offer and he lowered it. He went all the way down to 10% for the same
$600,000 investment. So, I'll give you the 600,000 for
10%. It's half the valuation you're asking for but I think we bring twice
the value. -So, we explained here that this isn't just a financial transaction where
you're getting an investor for your business. But in addition, you're getting
a business partner that will help you succeed that's got relationships and
connections and obviously the experience to help your business grow. The guy's
provide a counteroffer to both Robert and Mark. -Robert and Mark would you guys
be willing to go in at 500 for 5% each?
-You're walking your line at... You know, your evaluation from your previous
investors is driving your negotiation. -These guys have gotten money from banks
before and they're treating these guys the same. They don't really see the value
of the Sharks. -The only place your pitch fell apart is when you tell us about the
investors. Kind of just you went right off the clip. So, if you want a Shark, pay
a premium. -I wonder if these guys have even seen Shark tank before. So, Robert
goes out and then mark negotiates a little bit more and finally lowers his
offer to 9%. -If you get me to 600k for 9%, I'll do it. And that might mean each of
you giving up 1 point. 1% from each one of you... -So, as I watch this, I'm thinking,
"Man, are these guys going to miss the opportunity to partner with a Shark for
something so small?" And to my relief they did accept the offer. So now, let's check
out this deal with Charles Barkley. All the other sharks are actually out. But he
is interested. -I will give you the 250 but... -Hang on. -20%. -So, I have a question for
you. If you are on shark tank, you came here to partner with a shark,
all the other sharks are out now but one of them makes you an offer. They offer to
give you a quarter of a million dollars and they just want to be a 20% partner
in your company. What would you do? -Would you come down to 14? -That's a long way down.
Listen, you've
already gave somebody 15% who didn't put a dime in. -Yep. -I used to take my
office fair. -So now, let's say you made a counteroffer like they did. But the shark
is still firm. Now, what would you do? Would you accept the offer now? -I don't
think we were willing to give away that much equity but... -What? It's Charles Barkley. -I do
have good news. That came to their senses and they accepted the offer at 20%. Okay,
this next lady really gets it. Her business is off to a great start. She actually
has a lot of investors wanting to give her money.
Because one Shark dollar is worth 5 regular dollar... That's why. -She came in with a really low
offer asking for much less than the Sharks were expecting. What she really
wanted was a Shark as a partner. And so, she just asked for $100,000 for 10%
equity in the company. -There are teams plant-based investors out there and
they've already come knocking on my door. And they're ready to give me half a
million for 10% of my business. -Why would you do offer to us for 100? -So, if we do
the math here, an investor offered $500,000 to have 10% equity in the
company. She comes here to the Sharks asking $100,000 for that same 10%. So,
when she says here that they are worth 5 times the amount she really gets it.
She really understands the value of a Shark versus an investor. -So now, watch
what happens. Mark Cuban really wants this deal. -I'll give you $250,000 for 20%.
-Okay. But this is right now do-or-die? -I'll
the poster child for it. We'll go, We'll hustle. -Mark Cuban, you've
got yourself a deal. -Very smart. Very smart decision there.
Okay, I've got one more awesome one to show you. And then the crazy one. So, these
2 guys totally impressed the Sharks. And Robert offers them $500,000 for 10%.
Before they can respond, Kevin and Lori come in and they offer $500,000 for a
total of 15% for both of them combined.
Now, the offer that in my mind is obviously better is Roberts. 500,000 for
10%, it's my favorite Sharks. -I made you an offer that's fundamentally better,
500,000 for 10%. You've gotten it this far. -But
these 2 guys came up with another idea that really shows that they understand
the value of Sharks.
-We get the 3 of you guys for 15%? We'll do that deal right now. -500 for 15? -500 for 15 if we get the 3 of
you. -Done. -Done. -Done. -You're up. -I really didn't see
that coming. But when you think about it, now, they have 3 powerhouses in
business that's going to ensure that their business succeeds. Okay, you might
want to make sure you're sitting down for this next one. This guy made a new
bike invention. It's probably a pretty cool invention. But the guy has not made
$1.00 in profit yet. And yet he came in asking for 5 million dollars for 49%
of his company and then watch what he says next. -The investment is
100% financially secure, risk-free. -So, he's telling them that this is a
risk-free investment. It's impossible to lose. And I love the reaction on the
Sharks faces. Now, it gets even better. -And the projected return is 5 billion
dollars by the year 2020. -I'm sorry. -Was that 5 billion? -5 billion,
yes, 5 billion.
-So, what do you think is going to happen here? I mean they allow him to
demonstrate the bike. They ask him a few more questions. He even makes crazy
claims about this bike is going to win the Tour de France next year first place. And
then Steve Baxter chimes in. -I honestly don't fundamentally believe your
business. I actually think your numbers are crazy. You've asked us to trust you
that this is going to work that you can win the Tour de France with a bike. I
don't believe it actually eligible. You've actually given us a fundamentally
ridiculous investment proposal. I'm out. Andrew banks is next. -Richard for
entrepreneurs the worst lies you can tell are the ones you tell yourself. I
don't want to waste any more time. It's a ridiculous valuation. Just
preposterous but I'm out. -Janine and Naomi, they came in quickly. -I'm a firm
believer if something sounds too good to be true, it's never true. I'm out. -Richard, I
look forward to seeing your journey but I'm out.
-Then Richards really wants to be nice. But as you can guess... -I think this is the
rude position of commercial reality that you have such a long way to go and
you're asking so much in terms of the valuation of your company. I can't go
there. So, where I'm sitting, I'm out. -So, if you have a business and you'd really
like to partner with a Shark, know that they are way more valuable than the
money that they invest. And also make sure that yours is a legit business
opportunity. So, in my business experience, I've hired a ton of people in the
Philippines and I've made a ton of mistakes in doing that. So, the video that
you're going to enjoy watching next is the 5 major mistakes I've made when
hiring people in the Philippines. Make sure you watch the part about Dame. You
won't believe who he got away with.