'Shark Tank' contestant turns down $200,000 offer from Mark Cuban, later builds million-dollar business

Entrepreneurs on "Shark Tank" are usually seen putting their best foot forward while pitching products and negotiating with sharks to bag an investment. But some of them choose to stand their ground and refuse to take whatever offer comes their way, which works in their favor in the long run. One such founder was Derek Pacque, who sought $200,000 for a 10% stake in his seasonal ticketless coat check system, CoatChex. He got Mark Cuban's attention. Pacque said, "I have risked a lot to turn this business into a career, I've put in all my savings, I've taken money from family and friends, and turned down many great job offers, getting a deal with the sharks is exactly what I need."

Paque continued by showcasing the computerized system that matched coats to owners using facial recognition. In order to enable bars and nightclubs without coat check services to quickly and easily implement the Coatchex system and generate extra income for their operations, the business graduate intended to franchise the technology. According to Paque, he even made tens of thousands of dollars during Super Bowl week in Indianapolis when he tested his basic check-out coat system. However, when Daymond John inquired about the actual sales, Paque fumbled. "No, I've not made the technology, we just started," he said, referring to his partnership with his college professor, Hayes.

Paque sticks with his franchise-building strategy that doesn't go down well with the sharks."I can get 50 franchises open, I'm willing to put down $150,000 to start off with equipment to get this out there," he argued. Cuban called out his business model of selling to area developers and said, "Horrible idea, let me ask you something, how do you really feel about it? Horrible because you haven't tested anybody who's done anything in technology, knows that the only certainty is that it's going to screw up."

Kevin O'Leary dismissed it as a 'seasonal' business, while Barbara Corcoran and Daymond John felt that the system was overvalued and didn't want to invest. Robert Herjavec lingered because he felt the business still had some value as it came with a patent. Paque tried to negotiate and went up 15% but Herjavec refused and dropped the deal. Cuban finally offered $200K for 33%. Paque couldn't decide and called his professor for guidance.

He then asked for $200,000 for 20%, which Cuban didn't agree to. "I'm in dead shock that I just turned down a deal from Mark Cuban," Paque reacted in the end. But, after the 'Shark Tank' appearance, Paque rebranded his venture to Chexology and turned it into a thriving $7 million business. As per Shark Tank Blog, it now operates not just in nightclubs but also in museums, Barclays Center, House of Blues, hotels, and other popular restaurants.

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