'Shark Tank' contestant accepts offer from Lori and Robert — despite Mark Cuban calling it a 'bad deal'
Even if entrepreneurs don't bag a deal on "Shark Tank," they still leave the show with a lot of lessons. But Jennifer Stein-Bischoff, the founder of Supermix Studios, ignored advice from Mark Cuban himself and decided to go for a deal. The ambitious creator of a "Build-a-Bear" model for kids' clothing was told by Cuban that she was accepting a bad offer, but that didn't stop her. Bischoff negotiated a $25,000 royalty deal with two sharks, Lori Greiner and Robert Herjavec.
In the episode, Bischoff entered the Tank seeking $250,000 in exchange for 10% equity in her company. Along with her kids, she pitched Supermix Studios, an interactive, custom children's clothing brand that allows kids to add their own designer touches to clothes. She explained that as a mom, she noticed that her kids got a lot of confidence whenever they got to pick out their own clothes. As a designer, she put her thoughts into action to create a brand that allows kids to pick various patches of their choice and add them to their clothes to design them.
Greiner complimented the high quality of the materials, while Herjavec was in awe of his custom jean jacket that said, "Haven." He then asked about the cost of the items, and Bischoff shared that the jacket costs $13.75 to make and it retails for $55. She further added that all of the patches are propriety, and designed by her.
She explained that she had been in the industry for 20 years and had designed for Gloria Vanderbilt and Tommy Hilfiger. She came across the idea during the pandemic and chose to pursue it full-time. Apart from the website, Bischoff shared that she wanted to roll out design kiosks in stores as well, and she was in talks with 'Claire's' already. Coming to the sales, she shared that during the year of filming, the company had made $110,000 from sales.
After gathering the information, Kevin O’Leary made the first move, but not in a favorable direction. He said that he hated the kiosk idea and the fact that Bischoff wanted to go into retail. "Before COVID 19 you got a different virus. It's called 'Retail 19' and it's it's running through your veins even now. You can't let it go. It's 30 to 40% of your margin forever. It's a curse," he commented before dropping out.
Mark Cuban agreed with O'Leary and told the entrepreneur that it was not about customer acquisition. "I think you're going to have people walk up to it and maybe put in some information which is great for customer acquisition and then expect it to pop out and you're going to get a lot of canceled cards because that product isn't right there So for those reasons I'm out," Cuban said. Daymond John followed suit, saying the business was too risky for him.
However, Greiner and Herjavec loved both the idea of the business and the kiosk. After a brief discussion, they teamed up to offer $250,000 for 25%, but they demanded a 5% royalty until they recouped their investment. This immediately prompted Cuban to say, "What a bad deal." However, Greiner, Herjavec, and O'Leary disagreed.
"Mark you're not putting up any money. I do not find that a bad deal in today's market. Capital is completely dried up, particularly in your space. The fact you have an offer goes to your credibility in your past. Even though you are infected with retail 19," O'Leary commented.
Bischoff countered the offer by putting up 20% equity and a 2% royalty. However, the Sharks weren't willing to settle for that. Herjavec made the final offer of 20% equity plus a 3.5% royalty, and Bischoff accepted it.
According to the "Shark Tank" blog, as of May 2024, the deal with the Sharks had not been closed. However, the website of Supermix Studios is fully functional with increased offerings.
