A 13-year-old founder showed up on 'Shark Tank' and the judges were in awe of her negotiating skills
Negotiations on "Shark Tank" could get intense and even intimidating for some entrepreneurs, but this back-and-forth is also one of the elements that make the show entertaining. The stage was set for one such deal when 13-year-old Sofia Overton walked into the show to pitch her sock company, 'Wise Pocket Products.' While she got a 'multi-shark' offer right off the bat, the teenager did not accept it without negotiating.
Overton entered "Shark Tank" and asked for $30,000 for 15% equity in her company. She explained to the panel that as a kid she came across a problem that their clothing did not have pockets to hold items like mobile phones. Thus, she came up with a sock design that perfectly secured anything.
"I'm still in the eighth grade I have a PhD in sockology," she said. She further claimed that her socks provided a secure pocket that could hold things even during intense activity. "I created a patent-pending sock design for kids to safely stick their important items into Sock Pockets. So if you're playing soccer, rock climbing or you know spontaneously breaking out into dance with your friends. Wise Pocket Products has you covered," she explained. To demonstrate the efficacy of the product, she brought a dance group who performed a routine wearing her products.
After explaining her business and handing out samples, she told the Sharks that she self-funded the company with $5,000 in savings and another $5,000 that she won from other business competitions. When the Sharks asked her what she planned on doing with the $30,000, Overton explained that she needed the investment to expand and streamline production. "I'm only able to produce around 100 units per month," she said, which prompted Kevin O'Leary to say, "That's horrible!"
Furthermore, Overton shared that each pair costs her $5.47 to manufacture, and they retail for $15 and wholesale for $11, making them a bit expensive. However, she shared that she did some social work as well as with every pair of socks sold, she donated a pair to a kid in need. O’Leary said he simply didn't want a sock company in his portfolio, so he was out. Mark Cuban then took over to sing praises for Overton, calling her intelligent and an ideal 'kidpreneur.' However, citing a lack of expertise in the business, he dropped out too.
All was not lost for the young entrepreneur as two Sharks, Lori Greiner and the king of clothing, Daymond John, were still interested in making a deal. "So, you've got everything that it takes to really be a great entrepreneur, and Damon and I want to help,' Greiner said.
John added that he helped a similar business called 'Bombers' to go from $800,000 in sales to $120 million. Making the offer, he said, "Lori and I will do the $30,000 but we will be a third partner." Greiner explained that their goal would be to find someone to license the design to and then figure out what to do next.
"Do you want to take the $30,000 and give up one-third of your company?" O'Leary asked Overton. The young girl then shocked the panel by making a counteroffer. "You are right Mr Wonderful. It's a lot of my company. I'd like to make a counter," she said. She then changed her ask to $35,000 for 25% equity prompting Cuban to say, "Wow! She got some negotiating skills!"
Greiner and John did not fight over the deal anymore and accepted Overton's counteroffer. "I'm so impressed by you, congratulations!" Greiner said to the young entrepreneur as they shared a hug to close the deal.
