'Shark Tank' judges slam Kevin O'Leary as they believe contestant isn’t asking for enough money
Sometimes, even the simplest products can be worth millions of dollars if it has a compelling backstory. On an earlier episode of “Shark Tank,” an entrepreneur named Margaret Nyamumbo came to the show asking for $350,000 for 5% of her company, Kahawa 1893. What she asked for would put her company’s valuation at $7 million, which Kevin O’Leary did not agree with. However, he was shut down by every other shark, who all made offers.
Nyamumbo’s product wasn’t just with the goal of making a profit and selling great coffee from Africa. It was aimed at empowering the female coffee farmers on the continent who are never fairly compensated for their hard work. Each bag of Kahawa 1893 coffee had a QR code that linked directly to the bank account of a farmer. The customers can scan that code and send money to the farmers.
At the time of recording, the entrepreneur said that customers had given at least $20,000 to the farmers in Africa thanks to this. However, O’Leary, a man solely focused on the business side of things, did not believe that the company was worth $7 million, especially since it brought in $2 million in sales the year prior. Mark Cuban and the others quickly retorted and said to the entrepreneur, “You’re worth more.”
Nyamumbo got a scholarship to attend Smith College in Northampton, Massachusetts, when she was younger, and her village came together to raise the money for her to follow her dreams. Grateful to her homeland, she started the company a year after coming to the States and by 2022, had her product in stores like Trader Joe’s and Sprouts. Her story and her mission impressed the sharks, and everyone other than Mr. Wonderful made an offer to the entrepreneur.
Guest shark Emma Grede offered the entrepreneur $350,000 for 12.5% of the company. Robert Herjavec then jumped into the offer and said that the two of them could offer her $700,000 for 25% of the company. This was a good deal, but the entrepreneur countered with a more complex structure. She wanted $300,000 in cash and $400,000 as a loan for 16% equity. That’s when Mark Cuban and Lori Grenier said they’d accept that.
Herjavec did not like the complex structure of the deal and said that he’d give her $350,000 for 8%. Grede, not to be left behind, matched the offer. Nyamumbo accepted the latter’s offer, and her excitement knew no bounds. “This is just a dream come true for me, getting another Black woman supporting me and mentoring me. All the other women farmers that we work with - they’re going to be so excited,” she said.
The company has been doing exceedingly well and in 2023, sold coffee worth $3 million as per a report in CNBC Make It. “I wouldn’t have predicted it, but it’s something that I love doing. I don’t know what else I would be doing if I wasn’t doing this,” Nyamumbo said of her immense success.
