ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

'Shark Tank' turns down $400,000 deal because the founders made the 'biggest mistake' most startups make

Most of the sharks had concerns about water pressure even though the product impressed them.
PUBLISHED DEC 8, 2024
Screenshots showing Shark Tank judge and the co-founders of Boona (Cover image source: YouTube | Shark Tank Global)
Screenshots showing Shark Tank judge and the co-founders of Boona (Cover image source: YouTube | Shark Tank Global)

"Shark Tank" is a show where entrepreneurial dreams turn into a reality, but founders face tough competition and tough questions from investors before they can secure funding. In the words of Kevin O'Leary, also known as Mr. Wonderful, "Shark Tank" sometimes becomes an 'advice tank' where entrepreneurs often learn important lessons the hard way even if they don't walk away with cash. This happened to former Amazon engineers, Brett Skaloud and Jeff Feiereisen, who failed to secure funding for their startup, Boona, on the show. While the two presented their innovative product called Tandem, which added an extra shower head for couples to bathe together, the sharks didn't show they any love.

Screenshot showing Brett Skaloud and Jeff Feiereisen presenting their product (Image source: YouTube/Shark Tank Global)
Screenshot showing Brett Skaloud and Jeff Feiereisen presenting their product (Image source: YouTube/Shark Tank Global)

Biggest Mistakes Startups Can Make

Skaloud and Feiereisen made a presentation with two models taking a shower together on the set of the show. They explained that they had created a technology that maintains pressure throughout the two shower heads providing a spa experience to couples. Tandem can be attached to most standard extant showers without help from a handyman. The co-founders sought an investment of $400,000 in exchange for 10% of their startup, explaining that they wanted to expand Boona beyond Tandem.

Screenshot showing the demonstration of the Tandem (Image source: YouTube/Shark Tank Global)
Screenshot showing the demonstration of the Tandem (Image source: YouTube/Shark Tank Global)

They claimed that the Tandem, which was priced at $249, and their other products had been successful, earning Boona a customer base of 5,000 people and a rating of 4.7. Furthermore, they had raked in millions of views on social media and more than 50 thousand followers on TikTok. 


@tandemshower The Tandem Shower is super renter-friendly and takes less than 10-mins to set up. No tools needed 😉 #tandemshower #boona #doubleshowerheads #showertok #renterfriendly #showerupgrade #renterfriendlymakeover ♬ bounce (i just wanna dance) - фрози & joyful

 

When asked about the numbers, Skaloud and Feiereisen projected $1.7 million in annual revenue by the end of that year, and $5 million the following year. The Sharks were mighty impressed when they learned that the company had a 54% profit margin. It all seemed to be going well until the Sharks asked the two about their goal with the company. “We want to build a brand,” Feiereisen said. “We have a lot of IP [intellectual property] around this product, but we’re not banking the business on it. I mean, the next obvious opportunity for us is just the handhelds."

The answer did not please the Sharks, particularly, Mark Cuban and Kevin O'Leary. Mr Wonderful was the first to raise concerns over the idea, saying "Some of the greatest deals in ‘Shark Tank’ history [are] when the entrepreneur focused on that one application and maxed it out.” Even though Skaloud assured them that it was their focus as well, O'Leary wasn't convinced.

Screenshot showing Kevin O'Leary speak to the entrepreneurs (Image source: YouTube/Shark Tank Global)
Screenshot showing Kevin O'Leary speaking to the entrepreneurs (Image source: YouTube/Shark Tank Global)

Cuban expressed that it was the biggest mistake that startups make and falling into the trap of building a brand is not feasible for them. “They want to be a brand, as opposed to just executing on selling their product. [But] what builds a brand is your execution," Cuban said. 

The co-founders quickly pivoted by saying that the Tandem was their main focus and the other products would only support it. However, by then, the sharks had already stepped back from the deal.

Screenshot showing Mark Cuban sharing his advice with the entrepreneurs (Image source: YouTube/Shark Tank Global)
Screenshot showing Mark Cuban sharing his advice with the entrepreneurs (Image source: YouTube/Shark Tank Global)

Barbara Corcoran dropped out saying she couldn't relate to the product and was concerned with the water pressure being cut in half. Robert Herjavec and Lori Greiner also cited similar reasons before moving on. 

Screenshot showing Barbra Corocan speaking to the Boona co-founders (Image source: YouTube/Shark Tank Global)
Screenshot showing Barbara Corcoran speaking to the Boona co-founders (Image source: YouTube/Shark Tank Global)

Welcome to the "Advice Tank"

After the others dropped out, the Boona co-founders were left with only Cuban and O’Leary. Cuban said that the Tandem was going to be a cash-generating machine for the company, and he advised the two co-founders to just grab the cash and not try to grow too fast. He then went on to discuss the deal on the table and said, "But that’s not conducive to an investor because if it’s $400,000 for 10%, you have to generate $4 million in after-tax profits just for me to get my money back ... I’m out." 

Screenshot showing Mark Cuban talk to the entrepreneurs (Image source: YouTube/Shark Tank Global)
Screenshot showing Mark Cuban talk to the entrepreneurs (Image source: YouTube/Shark Tank Global)

O'Leary then offered Skaloud and Feiereisen two choices. The first offer was an investment of $400,000 for a $40 royalty per unit till $1.2 million is paid back, and a 10% equity stake. The second was $400,000 to become their third partner with a 33.3% equity stake.

Screenshot showing Kevin O'Leary make his offer (Image source: YouTube/Shark Tank Global)
Screenshot showing Kevin O'Leary make his offer (Image source: YouTube/Shark Tank Global)

When the co-founders countered with an offer of 20% equity for $600,000, Cuban jumped in with some advice. He told the co-founders to not give up so much equity as they didn't need the $600,000 with the kind of sales they had.

Screenshot showing Mark Cuban's reaction to Kevin O'Leary's offers (Image source: YouTube/Shark Tank Global)
Screenshot showing Mark Cuban's reaction to Kevin O'Leary's offers (Image source: YouTube/Shark Tank Global)

When the two spent too much time deliberating, O'Leary retracted both offers. “You’ve got to make a decision, and you can’t do it, that tells me you’re not sharp enough ... You came to the advice tank," O'Leary said. 



 

The pair left the tank empty-handed but were grateful for the crucial advice and learnings from the Sharks.

MORE ON MARKET REALIST
The entrepreneur shared that it was a habit of his to reward the people who worked hard for him.
2 hours ago
Pointing at the shelf full of Great Value Orange Juice, the creator said that the brand is trying to fool people.
3 hours ago
For the contestant named Linda, the deal was further sweetened as she got to meet a celebrity.
1 day ago
When it was her turn to play, Mama Doris went blank on the fifth answer costing her team.
1 day ago
She herself couldn't believe that she had come up with a solution that seemed impossible.
1 day ago
Carey called the aspiring actor a 'future star' while celebrating his win on the show.
1 day ago
He got too close to the contestant but she played along while the audience laughed awkwardly.
2 days ago
The answer is one of the most absurd things that a contestant has said on the popular game show.
2 days ago
The farmer did admit that he could be biased in his explanation but made points many agreed with.
2 days ago
Fans joked that the host had a "senior" moment on the show while Carey also took it in a light-hearted way.
2 days ago
While Steve Harvey was eager to start the Fast Money round, the players were busy dancing.
3 days ago
The woman shared that one package had a single banana and an industrial size box of ramen.
3 days ago
Seasoned viewers took to the internet to call out the blunder while the woman seemed unaware.
3 days ago
His mother also joined him in celebration and walked right to the car.
3 days ago
Belz later said that nothing is as good as the win and it was his dream to be on the show.
4 days ago
Several commenters pointed out the possible reasons behind this issue.
4 days ago
Her technique was unusual but it did the trick and everyone was elated about the spectacular win.
4 days ago