'Shark Tank' contestants negotiated too much and lost deal with the only judge who was interested

Negotiating a deal with investors on "Shark Tank" is the real challenge, even after entrepreneurs impress sharks with their creative pitches and innovative products. Although it's important to stand one's ground and not give up too much of the business for an investor's money, overdoing it can cost founders a deal. The co-founders of 'Nutr', Alicia Long and Dane Turk, learned that their plant-based milk-making machine had just one offer from guest Shark, Daniel Lubetzky. They were cautious about giving up too much equity, but negotiated their way out of a $500,000 deal because of that.

They demonstrated how plant-based milks in stores had all kinds of preservatives, gum fillers, and processed sugars, which cause health problems for people. Thus, to find a better way of making plant-based milk at home, they created Nutr.

They explained that their machine is designed to simplify the process of making fresh nut milk at home, using just nuts and water. After handing out samples to the Sharks, they called up Lubetzky to the stage to use the machine and see how simple the process was.

The sharks then tasted the pre-made samples, and almost the entire panel fell in love. "Whoa, this is good," said Daymond John, while Lori Greiner said that the milk tasted pure and clean.

When Kevin O’Leary inquired about sales, Long shared that they make the machines for $42 and sell them for $169. They further shared that the company had generated  $793,000 in gross revenue and had already reached $2 million in sales since inception. Furthermore, 90% of their sales come from their website, where they sell a subscription for flavored blends for $45 biweekly and $75 monthly. Turn added that while they were expected to make $2 million in sales by the end of the current year, they had a $1 million debt as well.

With all the numbers laid out, it was time for the sharks to make the moves. Mark Cuban was the first to drop out of the deal as he had a conflict of interest. He told the entrepreneurs that he had an investment in NuMilk, so there was no way he would do a deal. Next to drop out was O'Leary, who didn't see a clear path to liquidity for the company.

John followed the lead to go out, saying he wasn't comfortable with the valuation, and Greiner soon went out as well. However, Lubetzky expressed his interest in making a deal. "I'll ask you if you want to make me an offer, and I will entertain it. But, I agree with Damon that you came in with an ask that is very hard to reconcile with the numbers," he said. 

The entrepreneurs then came back with an offer of $500,000 for 7.5% equity. When Lubetzky didn't seem convinced, they threw in 2% advisory shares, saying, "Daniel, you are the entrepreneur we've been admiring for years." However, Lubetzky didn't budge and refused to make a deal.

While Nutr left the Tank empty-handed, they did find some success after their episode was aired. As per Tasting Table, Nutr is still going strong and has expanded its product line as well.

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