‘Shark Tank’ contestant makes bold demands and still convinced two judges to invest in his company
While most entrepreneurs come to "Shark Tank" intending to bag a deal, some ambitious individuals come in with bigger demands. One such contestant was Justin Baer, the founder of Collars & Co., who was seeking mentorship in addition to a $300,000 investment. However, when he tried to play hardball with the Sharks, they felt like he was trying to make them work for him. Luckily for the entrepreneur, Mark Cuban and guest judge Peter Jones saw potential in the company and agreed to strike a joint deal.
In the episode, Baer entered the Tank seeking $300,000 for 4% equity in his company. Starting his pitch, he explained how traditional dress shirts are uncomfortable and impractical for transitioning between formal and casual settings. Thus, to solve the issue, he created "Collars & Co.", polo shirts with dress collars that pair with suits and adapt easily for after-work wear. He claimed that with his product, professionals get both comfort and versatility.
In his pitch, he mentioned that he needed the investment to fuel the growth of the company, but he wanted to get mentorship as well. He then shared samples with the Sharks, who were eager to know more about the numbers and the justification for the $7.5 million valuation. Baer shared that since its inception, the company has generated $5.4 million in revenue, with a 20% net profit margin. Jones then requested the cost details, and the entrepreneur shared that the shirts cost $15 to produce and sell for $65 to $75.
With everything laid out, Daymond John became the first investor to drop out. Kevin O'Leary complimented Baer on his execution skills, but Lori Greiner jumped in to express that it wasn't a deal for her to make. Mr. Wonderful told the entrepreneur that he was willing to break his rule for apparel investments before making an offer of $300,000 for 10% equity. However, Baer immediately declined the offer, saying he was not willing to devalue his company, which was growing 28% monthly with no external investors.
Next to make a move was Jones, who also made an offer of 300,000 for 10% equity, but he argued that his global reach and infrastructure would help the company. But Baer stood firm on his valuation. Cuban then jumped in to ask what Baer needed, and the founder explained that he required funds for inventory, marketing, building a team, and mentorship. John offered mentorship, but for 10% equity. When the entrepreneur didn't budge, Cuban and Jones teamed up to offer $300,000 with a $700,000 line of credit for 10% equity. When Baer countered with 5%, the Sharks were shocked.
"Justin, you're asking us to go to work for you! There is no amount you could pay to hire the two of us to mentor you and help you globally," Cuban said, almost dropping out. They then gave him one last chance, and Baer hesitantly accepted the deal.
According to MR Mag, Collars & Co. experienced immense growth, recording a 300% surge in website traffic, after the episode aired. By 2023, the company had grown to over $20 million in lifetime revenue, Shark Tank Recap reported.
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