Kevin O'Leary hated her business model but this 'Shark Tank' founder walked away with a $500,000 deal

Kevin O'Leary is one of the most unforgiving and harsh judges on "Shark Tank," and it's very hard for entrepreneurs to please him, even after they impress him with a creative pitch. Shahira Marei, founder of "Dirty Cookie," experienced this firsthand as O'Leary hated her business model. But two other Sharks, Lori Greiner and Robert Herjavec, wanted a deal with her so bad that they fought each other for it. In the end, Marei walked out with $500,000 and a perfect partner for her business.

Marei sought $500,000 for a 5% stake in her company, and introduced her company's product as the revolution in edible gifting. "We've taken shot glasses and turned them into cookies, and they may look like hard cookies to you, but they're actually super soft and chewy. These are edible shot glasses that you can fill with any beverage from milk, coffee, sweet liqueur, or my personal favorite, chocolate ice cream," she explained. After trying the samples, most Sharks were in love with the product. Both Herjavec and Greiner showered the entrepreneur with compliments.

Coming to the numbers, Marei shared that a dozen glasses sell for $49.99 and they cost her $12.82 to make. As for sales, she shared that in 2018, the company made $300,000, and in 2019, the revenue went up to $345,000. Furthermore, in 2020, it was $1.27 million, and in 2021, she projected sales worth $2.6 million. When asked about the profits, Marei revealed that she made only $50,000 in profits in the previous year. She explained that the reason the profits were low is because she invested in a $400,000 machine that helped her make 15,000 cookie shots per week, or 4000 glasses per hour.

When Herjavec questioned the valuation, Marei explained that she multiplied the $2.6 million projection by four to arrive at the number. She added that the company had licensing deals in place with FTD and in the works with 1-800 Flowers as well.

While the numbers looked satisfactory, not all Sharks were intrigued. Mark Cuban was the first to drop out. "One of the challenges you have is that you compete with all gifts. You compete with all things fun and all things tasty, so you kind of are kept on how much you can charge. You're kind of in that really, really stressful gerbil cage, just running and running and running, trying to keep up," he reasoned.

O'Leary then chimed in with a harsher analysis. "I give you three years to make money; if you can't do that, then it's just a hobby," he said to the entrepreneur. He further added that the costs weren't justified because of which he was also out. "I think the reason the business model is broken is that for 12 goods cost, it has to be four. That's the only thing you should be focusing on. Still with your vision, your cogs aren't going to go down that much. I'm sorry, I hate your business model. I'm out," O'Leary said.

Next to go out was Daymond John, who was followed by Herjavec. However, Greiner was still interested in making a deal, and she offered Marei a loan of $250,000 at 8% interest and $250,000 cash for 25% of the business. The founder told her that she wasn't willing to give up that much equity, which is when Herjavec jumped back in, offering $500,000 for 30%, with a condition that if the company makes $6 million in 2022, the equity would go down to 15%. Greiner then matched Herjavec's offer with a $250,000 loan and $250,000 for 30% equity. Herjavech countered with $500,000 for 25%, and the same contingency, and Marei took the deal. 

Thus, in the end, Marei walked away with a $500,000 deal and a perfect partner in Herjavec.