'Shark Tank' offers $1 million deal to founder but one minor mistake changed everything in seconds
As long-time fans of "Shark Tank " know, getting a million-dollar offer on the show is not an easy task. Furthermore, getting such an investment from the shrewd Kevin O'Leary is nearly impossible. Thus, when the founder of OverEZ Chicken Coops, Chet Beiler got the offer and lost it too, everyone was left shocked.
For his pitch, Beiler walked into "Shark Tank" holding a live chicken named Chuckles. After putting Chuckles in the coop, Beiler started the pitch for his business OverEZ Chicken Coop.
He explained that backyard chicken keeping is one of America’s favorite pastimes and to facilitate it, his company makes modular chicken coops that are easy to assemble at home. He then revealed his shocking ask of $1 million in exchange for just 4% of his company. This immediately prompted groans from the Sharks with O'Leary asking Beiler why his company was worth $25 million.
Coming down to the numbers, Beiler shared that his company had made $21 million from sales. He added that year-to-date (in 2021) the company made $9 million from sales and generated a 12% or $1.35 million profit.
Describing the growth, Beiler shares that the sales in 2019 were $2.2 million, for 2020 were $6.8 million, and in 2021 he expected to close at $20 million. He shared that he planned to expand to Europe, for which he needed help from the Sharks, especially Robert Hervajec who had made a name for himself in the region.
While Herjavec was Beiler's primary interest, the Shark expressed concern over his fixation on Europe and his disorganized pitch. “The most valuable is my time,” Herjavec said. “My fear of going into business with you is that it is going to take me longer than the lifespan of a chicken to find out the details of your business," he added before going out.
Mark Cuban and Lori Greiner also declined to invest, citing similar problems with the entrepreneur's European focus. “I think you’re coming in talking overseas and Europe because you think that sounds good to us, I don’t think you’ve really projected it out," Cuban said.
In the end, only two Sharks stayed with Beiler, as they were drawn in by the OverEZ’s revenue figures. O'Leary said he sees the upward ramp in the numbers and he loves cash flow. Thus, he made the first offer of $1 million as a loan to be paid off at 11.5% interest in three years. He added that he would also take the 4% equity in the business. Next was Daymond John who expressed concerns over the cost of materials. Despite that, he offered $1 million for 25% of the company’s equity.
Even with two million dollar deals on the table, Beiler seemed overly distracted. He kept going back to Herjavec, trying to bring him onboard on his Europe strategy. This naturally agitated O'Leary and John, who asked him to stay focused on the offers. “I can speak chicken, and those chickens are saying right now: ‘Why don’t you get focused on the two offers then talking to a guy who has been out for 15 minutes?’” O'Leary said.
For a moment, Beiler negotiated with O'Leary, ignoring John entirely. This did it for the Shark and he pulled out of the deal. Beiler noted that he would like to do the deal with O'Leary but he would need more support from him in the future. “If you actually come in with business that makes sense, and I can make more money with my 4%, I’m going to support you. That’s what I do with all of my entrepreneurs," O'Leary said assuring him.
However, before finalizing the deal, Beiler again turned to Herjavec, saying he “just wanted to talk a little more about Eastern Europe.” This blew O'Leary's gasket and he swiftly withdrew his offer. "I am out! You do not understand! I was the only Shark... who was going to fund your business,” O'Leary said.
Despite the loss, Beiler appeared to be in good spirits as he bid all the Sharks goodbye, hoping they would someday enjoy his backyard chickens.
