'Shark Tank' judge Robert Herjavec spends big on pet speaker deal, but founder loses way more equity

“Shark Tank” sees a lot of different types of products, but perhaps none apart from one has claimed to make animals talk. Quite frankly, the whole concept sounds like a cheap trick. However, that is exactly what one entrepreneur put forth to the Sharks and was able to get a whopping $499,000 deal from Robert Herjavec. However, it was not an easy one to make as the entrepreneur had to give up a big part of the company.

Michelle Winowich had originally asked for $499,000 for 9% of her company, G.O.A.T Pet Products. The item that she pitched was a speaker that attached to the back of your pet’s collar. The company’s app lets the user type in whatever dialogue they want, which would then come from the speaker attached to the pet’s collar. For her demonstration, she had bought a retired K9, which was a German Shepherd.

Winowich also said that one could play music on the speaker during walks and that it could even be connected to cell phones via Bluetooth. The dog had a field day on the set as it received all the praises and pets it could get, especially from Herjavec. The problem was that this was just a glorified speaker, and the entrepreneur believed the company to be worth $5 million. That meant that she had tremendous sales.

The entrepreneur said that she had earned revenue of $2 million in the six months leading up to the taping, which shocked the Sharks. “You sold $2 million of this crap?” Kevin O’Leary asked in disbelief. Winowich was dressed like Snow White, which Daymond John didn’t really appreciate at first. “You look amazing in that outfit now,” he said after hearing the sales. However, they did not realize that there was a catch.

“I saw PetSmart and they said they were extremely interested, but they like exclusivity,” she said. “They bought over $2 million worth.” It might sound impressive, but what this means is that the retailer had purchased that much of the product, but it had yet to be sold. So realistically, the entrepreneur could not give enough data to prove that her company was worth $5 million. O’Leary was the first to drive this point into Winowich’s mind before saying no to making an offer.

Lori Grenier said no for the same reason. Mark Cuban did not want to invest in the company as he had no idea how the pet industry worked. John believed his offer would be way too aggressive for the entrepreneur. Herjavec also believed the same thing, but he ended up making the offer: $499,000 for a third of the business. This was way too much beyond what Winowich had asked for. However, Herjavec made it clear that he had no flexibility. After all, $499,000 is a boatload of money, and no Shark would take that risk for low equity. Ultimately, the entrepreneur had no choice but to take the offer.

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