Mark Cuban offers $400,000 deal to 'Shark Tank' founder because his 'daughters would like' her product
Mark Cuban is one of the sharpest minds among investors, along with his "Shark Tank" co-judge Kevin O'Leary, among others. But sometimes, even he could miss out on a detail that makes a deal lucrative, only to realize that later on. That’s exactly what happened on an earlier episode of “Shark Tank” which saw him back out of a deal and then come back with an offer.
The name of the company was Youthforia, and its founder was a woman named Fiona Co Chan. She came to the show asking for $400,000 for 5% equity. It might be a low percentage for a hefty amount, but she had a product and the numbers to back it up. Youthforia makes organic, plant-based cosmetic items, which the founder claims one could sleep in. Sleeping while wearing makeup is a big no-no, but these products were designed to change the game. Not only do these products work as cosmetics, but they can also work as skincare products. So sleeping in them would make one’s skin healthier. One of the top-selling Youthforia products at the time of recording was a blush that adjusted its color based on the user’s skin tone. That is something truly revolutionary as customers often find trouble in purchasing a blush perfect for their skin. What’s even more impressive is the company’s sales numbers.
Within a year of launching, Youthforia earned $2 million in sales. More than 80% of those sales were organic as Fiona started marketing via TikTok videos, which blew up. All of this was enough for Kevin O’Leary to be impressed, and he offered the entrepreneur $100,000 for 20% of the company, along with a $300,000 loan and a cut of the distribution pay.
The entrepreneur might have wanted the other sharks to come in as well, but they all backed out. Robert Herjavec and Mark Cuban both said that they didn’t have much experience in this industry and with this type of business. Lori Greiner was not a fan of the oil used in the blush. Barbara Corcoran seemed interested, but when Fiona said that she was releasing three new shades of the blush, she was confused.
She sensed uncertainty and backed out. Mr. Wonderful O'Leary was the only one left, and a negotiation battle broke out between him and Fiona. A royalty deal was suggested, and O’Leary offered $800,000 for 10% equity and a $1 royalty on each unit after a little back-and-forth. That’s when Cuban swooped back in. “Maybe my daughters will like this,” he said. “I know they’ll understand it, but I need more equity ‘cause you’re getting three of us: Alyssa, Alexis, and Mark. And Tiffany, my wife, too,” he added. He then offered $400,000 for 10% of the company.
Mr. Wonderful didn’t see this coming and came down to 7.5% but wanted the total royalty fee to be a million. Cuban wasn’t going to back down either, and he came down from his 10% to 8%. That was the deal struck at the end of the day, and Youthforia had one of the most successful investors in the world today on its side.
