'Shark Tank' judges weren't convinced until this founder revealed one document that got him a deal
A popular saying is that one should never judge a book by its cover. Well, the sharks on “Shark Tank” found that out in an earlier episode of the show. None of the investors at first believed in an entrepreneur, but once they heard that he had secured an international deal with millions of dollars, they were scampering to get a deal. The entrepreneur even received multiple offers from multiple sharks to sell his company to them right there.
Joe Moore is the founder of First Defence Nasal Screen, a product that fits over your nostril and prevents the entry of disease-causing bacteria and viruses. The entrepreneur even wore the contraption as he made his pitch on the show. However, none of the sharks were impressed. After the pitch was done, Mark Cuban even said, “Are you kidding me?” in disbelief. The entrepreneur had asked for $500,000 for 10% of his company.
When asked what his sales figures were, Moore said that he had sold 1.7 million units, but he then added that he hadn’t gone to market yet, so he could not give them a number in terms of money. This confused the sharks. How can a company that has never gone to the market sell 1.7 million units? That’s when the entrepreneur brought out his trump card. “We have one big client out of the United Arab Emirates that has actually put in their first order and given us a contract for $8 million over the next six years,” he said.
The mood in the room changed dramatically the moment he said that. Moore was even prepared with a copy of the contract he was offered. “You know, you don’t sound like the bozo I thought you were,” Kevin O’Leary said. At this point, he had realized that this product had more of an international appeal than in the States. No one, apart from Barbara Corcoran, was willing to let that go.
Mr. Wonderful was the first to lay down and offer. He offered Moore the money for a 20% stake in the company and a 15% royalty fee for each unit sold. When the entrepreneur said that he’d like to listen to other offers, O’Leary said, “They’re not interested.” That’s when Mark Cuban came in, but he wanted to be partners with Mr. Wonderful on the same deal. Daymond John was having none of it as he came in next with an offer of $800,000 for 30% equity and a 10% royalty.
O’Leary then offered to buy the company for a million dollars. That’s when Moore said that he wasn’t willing to give up the company without a royalty fee, but in all honesty, he still wanted to be a part of it as it was his passion. John then upped his offer to a million dollars for the same terms he was offering before. Robert Herjavec, who had been a silent observer in all this, finally came in with a $2 million offer to buy the company and a 10% royalty fee that the entrepreneur would receive.
O’Leary really wanted the deal, so he went all out to sell himself to the entrepreneur. “Let me finish with one thought that’s going to stick in the back of your mind. There are only two sharks here that have ever sold a company for over a billion dollars. I am one, Cuban’s the other guy. It’s billions. B. Everybody else is an M,” he said. Herjavec made his case after this, but the entrepreneur declined to sell the company at $2 million. The shark then went up to $4 million and promised Moore that he would be an employee running the things. This was an enticing offer but not quite enough yet. Moore wanted $5 million and 15% royalty along with a prominent role in the company.
However, this was too much for the shark, and he backed out. The three remaining sharks were O’Leary, Cuban, and John. The three of them ultimately decided to team up to offer $750,000 for 30% of the company and a 10% perpetual royalty. They were open to financing purchase orders as well. This was the final offer on the table, and the entrepreneur took it.
