'Shark Tank' contestants convince Mark Cuban to seal a $500,000 deal — even after he backed out
It's very hard to get an offer from "Shark Tank" judges even after impressing them with a pitch, and getting a shark on board after they have already dropped out is a rare feat. It did happen when the co-founders of 'Truffle Shuffle,' Jason McKinney and Tyler Vorce, walked into the show to pitch their culinary experience. While the entrepreneurs managed to get multiple offers, they eventually convinced Mark Cuban to jump back in and close a $500,000 deal, just to beat his fellow investor Robert Herjavec.
In the episode, McKinney and Vorce entered the Tank seeking $500,000 for 5% of their business. They started their pitch by sharing information on the gourmet food item, truffles. They shared that their initial business was supplying truffles to restaurants, but when the COVID-19 pandemic shut down California restaurants, they were left with 20 pounds of truffles worth about $20,000 in their apartment. Thus, to stop the gourmet item from going to waste, they decided to launch online cooking classes with high-end ingredients and fancy chef techniques, and it took off.
After sharing a demo of their classes, they handed out samples of their truffle products and dishes to the Sharks. The panel loved the samples, and Daymond John asked how much the truffles sell for. "White truffles go up to $55,000 a pound," McKinney responded.
When asked for the numbers, the duo revealed that each kit for their classes costs between $95-$125, including the virtual cooking lesson, along with the ingredients to make the meal. Furthermore, they shared that the company's year-to-date sales for the online classes were $1.4 million, but they made only $8,000 in profits.
Lori Greiner became the first to back out, followed by Daymond John. Cuban followed their lead, citing many challenges for the business. However, both Kevin O'Leary and Herjavec seemed interested in the business. Herjavec made the first offer of $500,000 for 20%. O'Leary, who didn't understand the business model, also offered, $500,000 but as debt at a rate of 9.5% over three years in exchange for 25% of the company.
After a brief discussion, the entrepreneurs turned to Cuban again, asking if he would join Herjavec in the deal. When they offered the two sharks just 14% equity, both of them decided to pursue deals on their own. "Why do I need Mark? What am I, chopped mushroom?" Herjavec said before offering the $500,000 for 20%. Cuban also offered the same deal, and the negotiations started. After a little back and forth, Cuban and the entrepreneurs settled on $501,000 for 18% equity.
According to the Shark Tank Blog, the deal went through with Cuban, who reinvested another $400,000 at a $60 million valuation. The company also witnessed a 1,600% growth since its appearance on the show, as per Tasting Table.
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