- Tonight,
- hopeful entrepreneurs
who believe they have
the next big business idea
will enter the shark t*nk
seeking the financial backing
to make their dreams
come true.
We would need now
another 10%.
That was the fastest 10%
I ever lost.
Welcome to the shark t*nk.
The sharks
are ready to invest
using their own money,
but only for the right person
with the right idea.
We know that with just the right
amount just to help us,
it will make money.
Annie, you've gotta wake up
and smell the money.
There isn't any.
But first, the entrepreneurs
must convince a shark
to invest the full amount
they're asking for
or they'll walk away
with nothing.
What just happened?
You never even gave
an offer, did you?
He's just mouthing off.
Daymond, you know what
I've learned?
- Talk is cheap,
- and so is Kevin O'Leary.
And if the sharks hear
a good idea,
they'll fight each other
for a piece of it.
- So then why fight over this - if
you're gonna end up - being in on it?
And why do we need Barbara?
Whoa. no.
Shaft-o-Reno to you, honey.
♪♪♪
♪ the best things
in life are free ♪
♪ but that ain't really
good enough for me ♪
♪ I need money ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ what I want ♪
♪ that's what I want ♪
First into the shark t*nk
is Jill quillin
with a homegrown business
designed to help women
be creative and save money.
♪♪♪
My name is Jill quillin.
I'm from Knoxville, Tennessee.
And my product enhances
a product that most women love
and use every day.
Not only is my product unique
and useful,
but it also helps women
save money.
That looks good.
We're in tough times.
I mean, as a wife and a mom,
I know it's very important
for women to find ways
to save money.
This is cheaper.
- I began my business
- right at my kitchen table.
I started this company so that
I could work from home
and be with my children more.
Isn't this fun?
The biggest hurdle
that I have run into
is that this is
a female-targeted product.
And unfortunately, a lot of men
are the ones with the money,
and they just don't get it.
There's no awareness
of this product.
- I need the sharks
- to increase awareness
and to take this product
to market successfully.
♪♪♪
My name is Jill
with divine innovations,
manufacturer of the hot new item
for women who wear lipstick--
the lipstix remix.
I would like
to offer you today
in the company
in exchange for $105,000.
- This is lipstix remix.
- It's a one-of-a-kind system.
- It's not available
- anywhere else in the market.
It includes this lipstick mold,
which is the secret w*apon
- to creating
- beautiful lipsticks at home
in a few minutes
in your kitchen.
The reason why I needed
this product so badly is because
I had personally
over $250 worth of lipstick
that I couldn't wear.
I get down to the bottom
of that tube,
there's one-third of my lipstick
that doesn't twist up.
Many women are wasting that.
Now with lipstix remix, I could
take a couple of those colors,
mix them together,
and create a beautiful shade
that I love.
Now is the time
to take lipstix remix
and three tubes
of your favorite color,
and that's enough lipstick
to make a brand-new tube
for free.
- Jill, how does it work?
- Let me show you real quick.
- You take the colors
- you want to mix together.
Just put them
in your measuring cup.
Now you put this in
the microwave for 45 seconds.
You're gonna end up
with this, okay?
- You take your lipstick mold.
- It's really easy.
You just fill it up
to the top there.
- And that goes into the freezer
- for ten minutes.
Now I do have one that's already
ready here for us.
This is
the really exciting part.
- Okay, you just pop off the top.
- Okay?
So all you do is
you turn it upside down,
and you're ready to pull it
out of the tube.
And as you can see,
it twists up and down
and looks like
a brand-new tube of lip shade.
And it doesn't
fall out?
- No. - So would I be able to tell
- the difference between
new lipstick
and nuked lipstick?
Well, in fact,
you would not.
The major manufacturers heat
and reheat their lipstick
all the time.
Jill, I'm a guy.
I don't often wear lipstick.
Barbara, is this
a good idea or not?
It's so clever.
And not only
for the reasons you say,
but most importantly,
nothing's more exciting
than a new lipstick.
Exactly.
- Where are you selling it now?
- We have sold - almost 800 units
in a very, very small,
local market.
How?
- I set up a table in the mall
- for ten days at Christmas.
We sold 254 units--
a little over 6 grand.
How much do one
of these things sell for?
This is $19.95.
Jill,
agree with me on this--
if you don't get this on
a TV shopping channel
type of format,
it's never gonna sell.
This is purely a one-dimensional
go-to-market strategy.
This is never gonna work retail.
It's never gonna work wholesale.
It can only be sold through,
uh, harrington's format.
And I have no access to that.
I'm out. I'm out
because I can't help you.
- You know,
- I might disagree with you,
- because there are
- a lot of products
- on retail shelves right now
- that started out
in direct response.
In fact,
I'm not being unrealistic.
I understand that $105,000
is gonna get us a good test.
We're gonna do a test
in a small, local market.
And when we have
increased our awareness,
then we go to
the number-one TV retailer,
and all of a sudden,
we get 90 million more homes.
Then we go and we put them
on the shelves
because women know
lipstix remix.
That makes sense.
This will sell,
and we will sell seven
for every one we sell on TV.
Boy.
Presentation's great.
You're great.
You're a terrific salesman.
I gotta tell you.
But I'm very frustrated
because this is
one of these situations
where I actually...
I've got a little guy
on one shoulder saying,
"do it. It's a great idea.
And screw up harrington
while you're at it."
- The other side says,
- "you're not a lipstick guy.
What are you doing?"
- So I'm gonna listen to my "I'm
- not a lipstick guy" on this one,
and say I'm out,
but with huge reservations.
I think your business
is worth what you're asking.
But I don't want
to put in $105,000.
But I'll give you half the cash.
Okay.
- You're gonna have to hustle
- one of the other sharks
to get the rest.
Two sharks are out.
Barbara is interested,
- but only for half the money
- Jill needs.
- Kevin harrington or daymond
- must offer
at least the other half
for a deal to be considered.
I'll give you the 105,000
for...
♪♪♪
Barbara has made an offer
for half the cash,
and you're--made an offer
for all the cash.
So rather than make
a third offer,
I think
I'll have to join Barbara
in offering half the cash,
but I'm gonna say we need...
So then why fight over this
if you're gonna end up
being in on it, and then
I'll get you as a partner?
'Cause then I'll do the retail
end, and you do the TV.
And why do we need Barbara?
Whoa.
No.
♪♪♪
♪♪♪
Two sharks are out.
Kevin harrington has gone in
on Barbara's deal,
but daymond
has a plan of his own.
Why do we need Barbara?
Whoa.
No.
Why? I have retail,
and he has--he has TV.
Do you know why? Because I'm
the trustworthy one here.
Yeah, yeah, yeah.
It's worth nothing.
Shaft-o-Reno to you, honey.
That's what's happening.
Barbara, I-I'll throw this
back to you,
because I think daymond
has retail experience
on a global basis.
What if the three of us
split this three ways
for 40%, $35,000 apiece.
- I'm sorry, guys.
- I opt out on the threesome.
Three's a crowd.
So I have an offer then
from Kevin and daymond
for a 40% equity stake
for $105,000?
Whoa, whoa, whoa, whoa.
Wait. am I missing something?
- Kevin, you're only in this
- with daymond?
- Have you axed me out?
- No, I asked you in.
- With him, too.
- Yeah.
Forget it. Take the deal.
I'm offended by the way
he acted today,
so I do not want to be
in a deal with him today.
And unfortunately,
you're here today.
So, Barbara, you--you don't
want to reconsider
and partner with--
the two of them?
With the two of them, and--
not from what I just saw.
I'd have to go to bed at night
and get a bodyguard to watch
what they might be doing
while I'm sleeping.
No, thank you.
If I could make a quick phone
call to my business partner--
my husband--
and just bounce off the 40%,
- make sure he is good with that
- and for the full offer?
Yes.
♪♪♪
Two rats here who cut me out.
I don't believe it.
We didn't cut you out.
You certainly did.
You packed together--
no, we didn't.
Take the deal.
Hey, honey.
It's your favorite c.E.O.
Okay, listen.
I actually have an offer.
You're letting emotions
get a hold of you, Barb.
This is money.
Barbara, this--this
is gonna be a good one.
I gotta tell you.
It's a very clever product.
♪♪♪
Okay. well, thank you so much.
I love you, too, honey.
♪♪♪
I have some good news.
Wait, before you give us
that good news,
we might have
some other good news.
I've decided to forgive
these jerks to my right
and jump in with them.
Okay.
- Because I really think you need
- a female in the mix.
To make room for Barbara,
we would need now another 10%.
So we'd be at 50%.
Mm.
♪♪♪
That was the fastest 10%
I ever lost.
Welcome to the shark t*nk.
♪♪♪
Okay. yeah.
Seems like you have
a decision to make.
Neither one of us
can wear the product.
You wanted a female.
And not only a female,
but a really smart one.
Let's see.
Let me think about this.
So do we have
good news, Jill?
♪♪♪
Absolutely.
We have a deal.
Okay.
Fabulous.
All right.
- Whoo! - Thank you.
- Welcome to the club.
My pleasure. Let me get
some lipstick on you.
- Oh, thank you so much.
- Jill, thank you.
- Thank you all so much. - Thank you.
- Great, thanks. Good luck.
Barb, it's too early
for me to get a hug?
Ugh!
All right, all right.
You got me 10% more.
Wow. daymond,
you savage animal.
- You know what? You're forgiven.
- You're so clever,
I don't even care about
being insulted. It's great.
So now I have the dream team.
- I never in a million years
- thought that I would have
such a great package.
And I cannot wait to take
this product to market.
A short time ago,
we met entrepreneur
Lisa Lloyd
and watched her strike a deal
with daymond and Barbara.
I have the power to do this deal
and make you filthy rich.
What are we doing?
It would be best to work
with the two of you.
So thank you.
Oh, thank you so much.
- I'm gonna make you rich.
- Thank you.
Let's see
what she's up to now.
♪♪♪
I'm Lisa Lloyd. I'm the c.E.O.
Of treasure chest pets.
And I left the shark t*nk
with $150,000
from daymond and Barbara.
- Treasure chest pets
- are a line of organizers
that look like stuffed animals
with secret compartments inside.
Since making my deal
with the sharks,
my sales are up 1,000%.
Today I'm taking Lisa
to buy buy baby,
where I've closed a great deal
- to get treasure chest pets
- into their stores.
We want to show you
your new home for your pets.
Partnering with
bed bath & beyond online
and buy buy baby stores
is a huge opportunity.
- They are one of the nation's
- number one retailers,
and I think this is great
for the product.
Thank you.
We wish you the best of luck
and all of us much success.
A year ago,
my family and I
- were in danger
- of losing our home.
- And since doing the deal
- with daymond and Barbara,
that is no longer a thr*at.
♪♪♪
Next into the shark t*nk
is Tim gavern
with a business he believes
will bring out the kid
in everyone.
♪♪♪
Hi, I'm Tim gavern.
My mission is to bring happiness
to kids everywhere.
I'm captain ice cream.
♪♪♪
Ice cream trucks are everywhere,
but what makes
captain ice cream special
is my ice cream moped.
No one else
has anything like it.
Ice cream is my blood.
I'm a third-generation
ice cream vendor.
My mother and my grandmother
both had ice cream parlors.
It's been a tradition
in our family since the 1950s.
How you doing?
- I was a car magazine editor
- for many years,
- and the publishing industry
- was on a downturn.
So I was looking
for a way to make money.
And ice cream was a natural.
- I wanted to bring back
- that wholesome, clean-cut,
nostalgic image
of the ice cream man
that I remember as a kid.
Kids absolutely love
captain ice cream.
When they hear the bells,
see me coming,
they jump up and down.
Thank you!
Me! me! Me! Me!
The looks on their faces--
- that's what makes me want
- to do this forever.
Ice cream makes people happy.
With a little help
from the sharks,
I can franchise this business.
And my ultimate goal is to have
a captain ice cream franchise
in every little town
across the United States.
Thank you, captain ice cream!
♪♪♪
♪♪♪
Hello.
My name is Tim gavern.
I'm captain ice cream.
In exchange for $48,000,
I'm offering a 25% partnership
in the captain ice cream
experience.
Captain ice cream is a mobile
novelty ice cream vending
business.
Captain ice cream will be
a franchise
of my unique ice cream mopeds
and will also become
the next big
novelty ice cream brand.
Captain ice cream franchisees
will project a positive,
wholesome image
- by riding my unique
- ice cream mopeds
wearing traditional white
captain ice cream uniforms
and paper ice cream hats.
Do you own a national trademark
for the captain ice cream--
yes, I own the trademark.
If you have
the national trademark,
that means nobody else can call
themselves captain ice cream.
Do you have any ice cream
to give us?
Of course.
- Can I have some?
- Sure. would you all like some?
- You shoulda
- done that a long time ago.
- I'm gonna give you
- my number one selling product.
Captain, break open the box.
There we go. Now we're talking.
Tim, I want to be clear.
Did you make this ice cream?
No. this is bought
from a company.
But this is absolutely
my number one product.
It's delicious.
- Captain, what does it cost
- to make the, um,
captain ice cream moped?
A brand-new version of this
will cost about $7,000.
So what's the business model?
- How much do you sell
- in a day, captain?
Um, generally about $200 worth
of ice cream in--in 4 hours.
Oh...
I just want to be clear.
$200 a day?
Four hours.
In--in four hours.
- Generally an event is-- - is four hours.
- What's your profit?
It's easy to make
$25 per hour as a vendor.
But what's the business model
for me as an investor?
You want $48,000 for what?
I want to build
a couple of mopeds.
- I want to start working on
- an electric version of this.
Okay?
How many do you have now?
How many mopeds?
This is it.
Just the one?
And are you making a living?
I'm--I'm barely
eking out a living.
Do you think that's a problem
- when you're trying to sell it
- to other franchisees,
- and you're barely
- making a living?
I don't, because I'm still
learning the business.
- Okay, you said you're gonna
- franchise this.
- Have you hired
- any franchise lawyers?
- Do you have documents prepared?
- Anything like that?
- Kevin, he's making $25
- an hour selling ice cream.
- Right.
- Right now I'm selling...
- A concept.
- Several different brands--
- you're really selling a concept
- right now, aren't you?
Exactly. exactly.
Yes. if I buy a franchise
from you, let me walk
in that guy's shoes.
Okay.
How much could I reasonably
expect to earn if I was working
four hours a day,
five days a week?
- Because that's the number
- you threw out--four hours--
- more than you're making
- in real estate today.
Probably.
- You could easily make $25,000
- to $50,000 a year
as an ice cream person.
I get what you're doing.
You sell ice cream.
- But I don't know where
- the investment opportunity is...
Because anybody can make
a moped with a freezer on it.
Yeah, but can they?
That's the thing.
Can they? You know--
yeah, they can.
Tim, I think it's a-a crime
for me to insult
an ice cream man.
I think there's something
- just innocent and beautiful
- about an ice cream man.
- I can appreciate that.
- Thank you.
- But the business
- is not big enough for me.
But I do love your, uh,
your--your attitude
and what you want to do,
but I'm out.
I don't understand that, bec--
all right, think about it.
Okay, it's a very
inexpensive franchise--
- well, think about
- my point of view.
- All I care about is
- "how do I get my money back?"
- Well, you get your money back
- in two different ways.
How?
First of all,
say the franchise is $12,500
to be a franchisee
of captain ice cream.
Okay, so--
why would anybody give you
$12,000 when they could just--
- why not? You're gonna sell them
- ice cream at a discount
- that's gonna be
- their own branded ice cream.
But they could
buy ice cream anywhere.
Look, you've got a concept
of which nothing is...
Unique and patentable or--
you don't think
this is unique?
Admit it. It's unique.
At least give the guy that.
It's absolutely unique.
All right, you know
what I've decided?
- I'm gonna give--
- I'm gonna give you $48,000
of Barbara's money.
You know,
I--I'm holding myself back,
because I believe in children
and wonderful, warm, and--
and things from the past.
That's what I'm trying
to recreate here.
But--but I can't make any money.
And I want you
to get back on that thing
- and ride into the sunset,
- because--
- I don't think
- that's true, though,
- because you're gonna take
- a franchise fee...
- No, I really do because,
- I have to--here's the problem--
- and you're gonna make a profit
- on every bike.
- Here's the business - reality in this.
- Okay.
- In about five minutes, I'm gonna
- have to send you an invoice
for about $2,000 for my time.
I gonna take off 50 cents
for the ice cream, though.
Okay. it's $1.50, by the way.
$1.50? that's an outrage.
Are you kidding?
It's a 400% markup on ice cream.
There's just nothing here.
That's the problem.
Say the word.
I'm out.
I want to summarize
what you've told me,
just so I'm clear.
Okay, sure.
- You barely make any money
- doing this today.
You don't make the ice cream.
Not yet.
I'm working on it.
You haven't sold
a single franchise.
And you have
a long way to go.
It's a start-up.
What am I gonna tell you?
Um, the ice cream gave me
a brain freeze. I'm out.
Tim, I understand what
you're trying to do,
- but you have
- no franchise company, okay?
It's a small business.
Thank you for--for coming here
today, but I'm out.
I think I'd happily buy
ice cream from you.
You seem like the perfect
ice cream kind of guy.
But you're here too early,
you're here too unprepared.
I'm out.
Thank you, Tim.
All right. Thank you, all.
I appreciate your time.
All right.
All right. Thank you.
I don't think the sharks
saw the beauty in...
What this business could be.
I--I'm a little disappointed.
He's got a lot
of ice cream in here.
Okay, get out of the way.
I'm gonna start it.
Kick it. Kick it up, baby.
Boys will boys.
I'm leaving.
Bye-bye.
Later!
♪
Next up is Michael schiavone,
with an innovative
business strategy
he hopes will send the sharks
into a frenzy.
♪♪♪
- Hello.
- My name is Michael schiavone.
I call my idea
"caffeindicator."
And I'm seeking $200,000
in exchange for a 25%
equity position in this venture.
Now did you ever wonder why
there's a decaf market?
- It's either because people
- don't want caffeine
or can't have caffeine for
medical or for personal reasons.
The fact is,
- you don't know whether there's
- caffeine in your coffee or not.
Enter caffeindicator.
It's the first
litmus-like tester
- incorporated
- on a sweetener packet
which changes color
in the presence of caffeine.
- Is it ink in the paper
- or in the sugar?
- It's on the paper.
- It's an ink.
- It's microencapsulated
- in gelatin.
- But, Michael,
- does it really work?
- Oh, certainly it does work.
- Absolutely.
Let me demonstrate
a mock prototype.
As you can see, if there's
caffeine in the coffee,
it will turn pink.
It's dynamic. It's curious.
It's fun to share.
- And hey, I don't even use
- a sweetener in my coffee,
but I just used a packet.
The sweetener packet market
is roughly a $12-billion market,
of which, the blue guys
have market share,
- the pink guys
- have market share,
- the green guys
- have market share,
- the yellow guys
- have market share,
and the white guys
have market share.
- Now what would happen if
- any one of these manufacturers
- were able to dramatically
- increase their share
in this global market?
Does that have value?
Yes.
Of course it does.
Sharks, welcome to
the sugar bowl brawl.
These guys are all fighting
for market share.
So what does it take
to take a $500-million product
to a $1-billion product?
But is there an indication
of it heavily caffeinated
or whatever the case is?
- No, it doesn't tell me
- how much caffeine.
It tells me whether or not
there is caffeine.
Almost like a pregnancy test--
very similar. In fact,
that was part of the--
but doesn't--doesn't decaf--
has about 2 milligrams
of caffeine in it.
- You're absolutely right,
- versus 120 milligrams.
- But it's still
- gonna trigger the test.
- I can mask out
- the false positives.
- You're missing
- the point of this.
- It doesn't matter whether
- the person wants to know
whether there's caffeine or not.
It's the fact that the white guy
can say to the yellow guy,
"my packet's better
because it does this."
I get it. I get that.
- And I agree with you.
- That's it!
That's why I'm here.
This is a great opportunity.
The manufacturing
and the distribution
is already in place.
What we're leveraging is market
share in a global industry.
And I'd like to know
if you're interested
- in partnering with me
- on this venture.
So, Michael, when you
went to the blue guys,
and said,
"I have this great idea.
Buy my product,"
what did they say?
I have not gone
to the blue guys yet.
Why not?
I came to you guys to see
if you can open the doors
and partner with me in--
on this.
- You've never tried to talk
- to any of the white, yellow,
green, pink, blue guys?
No, sir. I have not.
And do you own the patent--
I do.
How much will this add
to the cost of each packet?
It has to be negligible.
You don't
know the number?
Uh, uh, no. The fact
of the matter
- is that anything you
- make in mass quantity,
the--the--the--the price
of it drops.
What's your cost
to make one pack now?
- I don't have a cost to make
- one pack right now.
- What--give us a number. We just - want a feel for the number.
- Volume--yeah.
Here's my thought on that.
- Um, if I increase
- market share dramatically,
the cost of production
goes down, profit goes up.
Yes.
Give us a number.
Yeah, we--we get that,
but can it be made
for a fraction of pennies more?
Absolutely.
It can?
Absolutely.
So, Michael,
what you've done, basically,
is you defined
your entire market.
That's good. It's very clear
who we have to sell it to.
The bad is, it's very clear
who we have to sell it to.
If one of these color
don't buy your product,
there is no market.
Would you agree?
That's correct.
But wait a minute. Your strategy
is to go to all five and say,
- "which one of you wants to
- increase your market share?"
- So the real question
- on your deal
is if I'm one of these
marketeer manufacturers,
I have to buy into your premise
that putting an indicator
for caffeine
- is going to
- significantly increase
the number of times
people use my packet.
I think that's a given.
Absolutely.
- However,
- there's another angle.
What is it?
What if I don't want my--
my competition to have this?
And they bury it.
You know, there's something
nasty about you I really like.
Oh. I'm... I think
I'm happy to hear that.
No, no, I like it.
What you're trying to do
is create a bidding w*r
in a very,
very structured market.
And speaking plainly,
there's the feeding frenzy.
Right.
What do you do for a living?
Currently, I'm a mechanical
engineer. I'm in between.
And some day-trading
in the market.
- And where did you get
- this idea from?
I was on a business trip
and, 11:00 at night,
I stopped with my wife
and said,
- "let's have a slice of pie
- and cup of coffee."
I had a business meeting
the next day.
- I was up all night, and I know
- she didn't give me decaf.
But there's only one way to
tell, and that's to drink it.
So what's with the 200,000?
- It's just a number
- you pulled out of the air?
- There is, um,
- licensing fees.
- There's attorney fees,
- as you know,
- and we have to
- set up a corporation.
- And I need some help. - I need you guys
- to open up doors.
- If one of you are interested,
- I want to advance this.
I want to move it forward.
I'm gonna jump in--
- I'll--
- in here,
because I think there are two
real weaknesses to this idea.
I'm not sure the consumer
is that paranoid
about testing and mistrusting
whether they got
caffeinated coffee
or decaffeinated coffee--
that's one--
and the second reason
is with any of these
prospective buyers
you're hoping to sell to,
it's not just the minimal cost
of adding it to the packet.
But they've got to market
the idea
and let the consumer know,
and that's expensive.
It's not such an easy,
clear road to my mind
as you're positioning it.
So for those two reasons only,
I'm out.
- Those are excellent points,
- Barbara.
And I think that's
why Michael realizes
his 25% is ludicrous.
That sounds like
a negotiation, Robert.
- That's like basically saying
- that you'll do this deal,
but you want more than 25%,
and your greed is showing.
That should be familiar to you.
I saw your greed.
I saw your greed.
You know, Mike, I was
on the fence for a second,
but I agree with Barbara
that they would have to do
very pointed
and specific marketing.
- I like the idea
- that you're trying to att*ck
the number one drug
sold in the world.
But I am out.
Michael,
I'll pay for an option
to see if one
of the five guys do it.
I'll give you the 200,000
for...
Contingent on getting a deal
with one of the five companies.
♪♪♪
Michael, I have
a better offer.
♪♪♪
Two sharks are out.
Robert has offered $200,000
for a 60% stake,
contingent upon getting a deal
with a major sweetener company.
But Kevin harrington
is also interested.
Michael, I have
a better offer.
Same contingency,
but I'll--I'll make you
the offer at 50%.
All the offers are contingent.
It's worthless
if they don't want it.
But we all agreed on that.
But you've got two offers, okay?
Now I'm deciding whether
to Tr*mp both of you bozos.
♪♪♪
Mm.
O'Leary, are you in?
Are you out?
- I am thinking.
- I don't need the noise.
♪♪♪
I think you need to either
say yes to me or yes to Robert.
'Cause I don't hear any offers
coming out of Mr. O'Leary.
Now what are we waiting for?
Michael, you've got two offers.
I need an answer. I'm gonna
take my offer off the table.
I need an answer on my offer.
Oh.
Um...
I believe that I would take
the 50% partnership.
Are you accepting my offer
then, Michael?
I'll accept your offer.
Okay. thank you.
All right. Good job.
Nice job.
Thank you very much.
Thank you very much.
Nice to be partners.
It was a fair deal.
It was a fair deal.
- Thank you very much
- for your time.
- What just happened? - You never even gave
- an offer, did you?
I just needed--
I just needed control.
- He's just mouthing off.
- I wasn't giving him a chance.
I said if he accepts my offer,
it's a deal. We're done.
No, I got it.
I just--just--
somebody kept him quiet.
I wasn't quite there.
Daymond, you know
what I've learned?
- Talk is cheap,
- and so is Kevin O'Leary.
I feel like finally...
After 18 years of keeping
this thing bottled up,
I finally partnered
with the right man
- to help me bring this
- to fruition.
It's great!
I feel excited.
Next into the shark t*nk
are Jeff and Annie Hughes,
a husband-and-wife team
with a new twist
to an old profession.
♪♪♪
Hi, my name is Jeff Hughes.
And I'm Annie Hughes.
And our company
is legal grind,
and we are seeking $200,000.
And in exchange,
we will give you
Mm. that must mean
there's profit.
Oh, yeah.
- from loyola law school
- in Los Angeles
and passed the bar exam.
- The economy was in recession,
- and there were not
- a lot of opportunities
- for young lawyers.
- I decided
- to pursue other interests.
- I always wanted to open up
- a coffeehouse.
- I ended up spending more time
- in coffeehouses
than courthouses.
And then it hit you.
And then it hit you.
It hit me.
I realized that a coffeehouse
would be the perfect place
for a legal resource center...
That could cater to the unmet
needs of the middle class.
Why the middle class?
- Well, the middle class--
- I'm from the middle class.
So am I.
Well, in--people with,
uh, lower incomes,
they have access to legal aid.
And the wealthy have
their own lawyers on retainer.
The middle class has neither.
So what did you do about it?
- I moved back home, and with
- the help of my family,
- I opened up
- legal grind coffee & counsel
in Santa Monica.
Legal grind offers its
trademark--coffee & counsel--
and an à la carte menu
of legal services
at affordable prices
for purchase.
It is your one-stop shop.
It's a place where anybody
can conveniently access
affordable legal information,
services,
and representation.
With your funding.
With your funding
and expertise,
we will franchise
legal grind locations.
- So for the sake
- of justice,
- we ask that you please - fund us.
- Jeff and Annie,
whatever happens here today,
I want you both to know this--
you have a future
in bad theater.
Thanks.
Annie, do we get a coffee?
Oh, yeah.
Can you serve him one?
I don't know
if it'd be any good.
You don't actually sell
any legal services yet.
This is a concept.
No. Jeff started this
in 1996 in Santa Monica.
You've had this for?
So are you making any money?
Uh, we're grossing
about $200,000 a year.
Are you netting any money?
Um, I think... you know,
Most--most of the income
go to our salaries,
'cause we've had to raise
a family.
- Well, how much
- do you take in salary
before that leftover money
for profit is there?
Uh, maybe $50,000.
Each?
So, Jeff and Annie,
just so I'm very clear...
Okay.
You've combined a coffee shop
with legal services.
- Yes, to serve
- the middle class, because--
tell 'em. I mean, there's--
the middle class is...
Not getting
their legal services met.
I get the idea.
I like the target market.
Okay.
But you're losing me on the fact
that to get into your business,
I have to go into
the retail coffee business.
No, you don't.
- Actually,
- it's a coffeehouse setting.
- It's just a place to start,
- because all of our lawyers
have their own offices
and everything.
- So it's not like
- you would be coming there
- for all your relationship
- with that lawyer.
- Can you explain to me
- why you want to be
- in the low-margin
- legal services business
and coffee has anything
to do with it?
Well, I-i don't think
it might be low margin. Uh--
I'm looking at these prices.
I can't get five minutes
of my lawyer's time
for any of those numbers.
But the document services
are not performed by a lawyer...
You don't--are not hiring
a lawyer.
They're having documents
prepared,
- because maybe, you know--
- and then this also
helps us, too, with upselling.
Okay, Annie,
walk me through one.
I'll take health care directive
for $100.
Okay.
- How much of your time
- does it take
to actually service that deal?
I can prepare one
in ten minutes.
All right, so you're--
you're telling me
- while they're having a coffee
- which you sold for $2.50--
I can interview them and have
them prepared in ten minutes.
And have you
done that before?
Yes.
I've managed the Santa Monica
store for seven years.
So do we have to find
lots more Jeff and Annies
that want to work?
No, we don't.
Well, you said you're
franchising them, right?
I know, but it's us--
- it's training
- the right person.
- But, Jeff,
- you're an accredited lawyer.
- Is there any laws
- about having coffee waitresses
providing legal services?
No, as long as she's not
providing legal advice.
She's a document assistant.
- Isn't this much better done
- on the Internet
where there's no
brick-and-mortar cost involved?
Why the coffee shop?
People like to actually
talk to a...
- They do. I can't tell you - how many times...
- A warm-blooded human being.
I've had somebody come in that
did services over the Internet,
and they were not happy.
When it comes to
certain legal services,
they want to interact.
Annie, crazy idea.
Just open up a store
that says "legal services."
Right.
Nobody would come in 'cause
they don't trust lawyers.
- There's truth in that. - What if
you're just sitting - in a coffee shop,
talking to a lawyer?
It's bringing
somebody together--
people go
to other places and sit
- and meet with their lawyer.
- All right.
- Coffee has to do - with just making
somebody - feel comfortable...
Yes.
- Addressing their difficult
- legal issues.
- But why is it--
- why is it coffee and lawyers?
Why isn't it pizza and lawyers?
- Why isn't it
- dry cleaner and lawyers?
- Where's the dignity
- in pizza and lawyers?
What, there's
dignity in coffee?
Can I show you a list
of franchisee requests
that we've received?
You have a list
of franchisee requests?
Oh, over a hundred.
So why don't you just
take down payments
on the franchisee requests?
Then all you have to do
is take 20 franchisee requests
worth 10,000 apiece.
Right.
Because we're not even
in the position to know
- how or what to do
- when we get these requests.
- Yeah, but then - what are you gonna do
- once we give you the 200,000?
- You're still not gonna know.
- Well, you hire--
yes.
You hire legal consultants.
Hmm.
Not legal--
fr-franchise consultants.
You're gonna
go to the coffee shop.
- Do you see the irony?
- Do you see the irony there?
You're gonna
jump over the counter
and sit with a lawyer.
- Let's say I say, "look,
- I want to be in the coffee
and legal services business."
Then I'd ask this question--
how much money does
your coffee-legal store make?
And that answer is zero.
No. it makes money.
No, it doesn't.
Yes, it does.
After you pay yourselves
a normal salary,
there's nothing to make.
Annie, you've gotta wake up
and smell the money.
There isn't any.
How am I gonna pay a franchise
fee to you if I'm not profiting?
Well, okay. All you have
to do is put a little bit
of money in marketing.
Jeff, answer this for me.
- Let's say I take my hard-earned
- 200,000 bucks
and hand it to you today.
What are you gonna do
with that money?
Well, I think, Barbara,
you and I
would have to discuss it.
But you don't have a plan
- as to how you're going
- to make use of that money?
We take $115,000
and open up
a prototype store.
That store should
be making $300,000.
- And find another
- little Annie there
- to sit and serve the coffee,
- to make friends with everybody.
- A legal document assistant,
- so the--
- a lawyer doesn't have to
- be there the whole time.
How do you get the people
to come in to your store?
Word of mouth.
'Cause you said you--
if you--if you said
- if you said
- it's a legal place--
- it's all word of mouth,
- all word of mouth.
And because we're every--
- we're in a location
- where people are constantly,
- "oh, what's that place?
- What's that place."
We know that with just the right
amount just to help us
put a location
in a high-foot-traffic area,
market it, and advertise it,
it will make money.
Annie, you make no money.
Yes, we do.
You barely get by today.
If you add marketing costs...
- Because we don't advertise
- and we don't market.
- You're not gonna make
- any money.
- Every money that we make,
- unfortunately, we have to turn--
you've never advertised?
If we work properly--
Annie, Annie, Annie, guys,
I think you've had
a little bit
too much coffee today.
You have to just calm down
and listen to us.
You barely get by today.
We make more--
- Annie, - Annie, Annie--guys,
- I think you've had
a little bit
too much coffee today.
You have to just calm down
and listen to us.
We're getting a lot of,
uh, negative feedback on--
it is our money.
Yeah.
I know.
That's it.
Right.
But you're not having
an open mind.
Guys, I'm gonna just say
where I stand on this.
I'm not saying
it's not a good idea.
- I'm a little afraid
- of getting into a business
with a bunch of lawyers.
I'm gonna have to say
I'm out.
♪♪♪
I happen to think you've
got a great gimmick here.
But I don't trust
your ability to replicate it
through a franchise network.
I'm out.
A franchise is built
on a success
that you have gotten
all the bugs out
and then you have a beautifully
well-oiled machine,
and now you're gonna say,
"I'm gonna take this
- and duplicate it
- times a hundred."
I don't think you've got
that oiled machine yet.
I'm out now. Thank you.
Well, in 2001, we won
the American bar association's
legal access award.
And that award is given
to an organization
that is exemplary
and "replicatible."
That was eight years ago.
Eight years ago.
We still never had the capital
to run a business the right way.
All of you know
you need capital to do it.
Come on. That's crap.
You have a bad idea here.
You've been doing it
for 14 years,
and you wake up one day and say,
"I'm gonna take my idea
- and now I'm gonna franchise it.
- Give me $200,000."
No, we didn't just wake up.
I'm out.
Jeff and Annie, the only thing
I saw of value here today
was some really bad theater.
But I don't see a business.
I'm out.
What do you mean
by "bad theater"?
It was funny.
That's what I mean.
Well, why is that bad?
It's not bad.
I said it was valuable.
You said it was bad.
It was funny.
It's not funny to thousands of
people that we are able to help.
I think we're all--i think
we're all out. Thank you.
Thank you.
Thank you.
♪♪♪
I didn't even get a coffee.
That was
terrible presentation.
Absolutely terrible.
I like Annie--
Annie get your g*n.
She was ready to fight.
Kevin, I thought you
were pissing her off
with the bad theater thing.
She was mad.
She was mad as hell.
I thought she
was gonna come after you.
She might, but I'm still right.
They're not open-minded
to new ideas for, like,
maybe this generation, okay?
And we're in a recession.
- You don't think people
- looking for different ways
- to spend their money
- on legal services?
♪ The best things
in life are free ♪
♪ but that ain't really
good enough for me ♪
♪ I need money ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ that's what I want ♪
♪ what I want ♪
♪ that's what I want ♪
01x14 - Episode 114
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Shows entrepreneurs making business presentations to a panel of five venture capitalists (investors in start-ups) called "sharks" on the program, who decide whether to invest in their companies.
Shows entrepreneurs making business presentations to a panel of five venture capitalists (investors in start-ups) called "sharks" on the program, who decide whether to invest in their companies.