'Shark Tank' contestant turns down offers from three judges as he refused to give up 10% of his firm
Entrepreneurs with dreams of making it big arrive on "Shark Tank" seeking investments from some of the most prominent names in the business. This is why the most common assumption is that no one would turn down a deal after an impressive pitch, followed by sharp scrutiny by sharks, and ruthless negotiations. But an entrepreneur proved everyone wrong when he turned down two deals on the table, as he simply wasn't ready to give up 10% of his business.
Wylie Robinson was seeking $600,000 for a 4% stake in his company, Rumpl. The company sells breathable and portable blankets that feel like sleeping bags and are made from plastic waste. Robinson also claimed that they donate 1% of their sales each year towards environmental causes and even had brilliant sales figures, the highest in a calendar year being a whopping $8.8 million.
The year after that, sales dropped to $6.5 million, but according to the founder, that was because they had lost a corporate contract. In the year when he appeared on "Shark Tank," the company was projected to do $8 million. However, the bigger problem was that Robinson was only making 5% to 6% profit pre-tax on those massive numbers. The entrepreneur also said that he wanted a sports licensing deal, which was one of the reasons why he came to the show.
Mark Cuban simply did not buy into that and said that he was out, and Lori Greiner followed suit. The other three sharks, however, were interested. When the entrepreneur spoke of a royalty deal, Kevin O’Leary was more than happy to hear him out. Robinson said that he’d be willing to take the $600,000 as a loan with 10% interest payable over two years and then 5% of all revenue generated in a sports license channel.
Daymond John was quick to offer him a different deal, as this was something he believed he could help with. He offered the money as a loan at 10% interest and 5% of sales for two years. The shark believed that he could open up several licensing channels. Guest shark Blake Mycoskie wanted in on the deal as well. The two of them offered the entrepreneur $600,000 as a loan for a royalty of 5% of all sales over two years and 4% equity.
O’Leary offered the money for a $10 royalty fee per product until he made back $1.8 million and a 4% equity. John and Mycoskie then raised their equity percentage to 10%, which the entrepreneur was not willing to give up at all. Robinson also said he wanted to work with Mycoskie more than anyone, and as a result, John backed out of the deal.
The problem was that the guest shark did not believe that anything less than a 10% would get him out of bed for this business. The entrepreneur was not willing to give up that much equity and said no to all the offers in front of him, much to the surprise of the sharks.
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