- 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're gonna make you
- $24 million in revenue.
I'll bet half my company
on it.
Wow, what blind confidence.
I love that.
Not blind.
In the t*nk, the sharks
are ready to invest
using their own money,
- but only for the right person
- with the right idea.
I have no doubt in my mind
you guys have a home run here.
- Barbara, you have absolutely
- no business here.
This guy will eat you for
breakfast at every opportunity.
Believe me. He's an animal.
We just knocked us--
our equity down
because of
the bank of bozo Barbara?
But first, the entrepreneurs
must convince a shark
to invest the full amount
they're asking for
- or they'll walk away - with nothing.
- Wait a minute.
I called him a pig,
and you called him a liar,
so he's a lying pig.
Yes, but a talented lying pig.
And if the sharks hear
a good idea,
they'll fight each other
for a piece of it.
I'd like to offer you $115,000,
'cause I don't think there's--
all right, you know what?
I'll do the same deal he did.
Wow.
- Okay, that's just illogical, - that you're matching me.
- You know, Robert,
I am going to cloud your waters
because you're a bozo.
Who are the sharks?
Kevin O'Leary
is a venture capitalist
- who started a software business
- in his basement,
which eventually sold
for $3.2 billion.
- Barbara corcoran
- is a fiery real estate mogul
who turned a $1,000 loan
into an empire
worth hundreds of millions.
- Kevin harrington
- is the king of infomercials.
His genius marketing
of products
- has amassed
- billions of dollars in sales.
- Daymond John
- turned rags to riches
with his clothing brand fubu,
which has grossed
over $6 billion.
And Robert herjavec,
a technology tycoon
who sold his Internet companies
for over $350 million.
♪♪♪
♪ 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
are d.J. Stephan
and Sean Conway
with an innovative business
that could benefit
underachieving
and overachieving
college students alike.
♪♪♪
My name's Sean Conway.
My name is d.J. Stephan.
- I met Sean
- about eight months ago
at the university of Arizona.
So I'm gonna--I'm gonna
bust out my laptop.
You got it.
I'm gonna start working
right away.
I like it.
- We both had
- a very entrepreneurial spirit,
and we've been, uh,
great friends ever since.
While I was in college,
I always struggled
during class.
It got to the point
where I had to go see a doctor,
- and the doctor diagnosed me
- with a.D.H.D.
♪♪♪
- Have you guys heard
- of notehall?
I created a service
where students can buy and sell
class notes and study guides.
Notehall is a win-win
for both students,
because students who take
great notes can upload them
- and earn supplemental income
- for it, and students that
- happen to fall behind
- for any variety of reasons
can now log on to notehall
and get caught up instantly.
- Given the competitive nature
- of the Internet,
we have to move fast.
We need the expertise
and financial backing
of the sharks
to take this worldwide
- and literally help
- all future generations.
♪♪♪
Hello.
My name is d.J. Stephan.
This is Sean Conway.
Our company is notehall.
- And we're here
- asking for $90,000
in exchange
for 10% of our company.
- Notehall's a web site
- that allows college students
- to buy and sell class notes
- and study guides
- in each
- of their college courses.
- So, Kevin, let's say you have
- a huge exam coming up.
- So you're naturally
- gonna create a study guide
to prepare for that exam.
You're gonna load it
on notehall.
At the same time, Robert,
you have been distracted
- by the cute blonde girl - in class.
- Absolutely not.
I've been married for 20 years.
That would never happen.
- But he has been
- stealing my notes for years.
- But you're gonna go on
- and download Kevin's notes
- and pay a few dollars
- doing this,
- and then Kevin's
- gonna earn a commission
- on--on his transaction.
- It's that simple.
- We launched it
- at the university of Arizona,
and within eight months,
our web site was being used
- by over 40% of the students - on campus.
- Wow.
- We pilot launched
- at Arizona state university
- and Kansas university, and we
- saw relatively great traffic
- with basically
- zero advertising costs.
- We're planning on launching
- at 24 universities
- this upcoming fall,
- and with your help,
- we feel we can go nationwide
- in just a short period of time,
making notehall the next dorm
room name on the web today.
Is it legal?
Yes, it is.
Absolutely. what we're doing is
pretty much giving the students
a better understanding
of the actual course,
and we're teaching those
students how to take notes.
How do you know
the notes are good?
- Do you get--kind of get a chance - to take a little peek...
- Of course.
And review it
before you sign up?
- Right, so there's
- actually a preview
that's automatically generated,
and it shows 30% of the notes.
- What if it's
- the wrong information?
- We offer 100% money-back
- guarantee
if students aren't satisfied
with the content they buy.
Oh, that's better.
And we've only refunded about 25
out of over 5,700 documents
- that have been uploaded-- - but quick question--
- I just want to know
- how much you guys sold
- in one year?
Uh, so we had 5,900 credit card
transactions in 8 months,
and we had $30,000 in revenue.
What's the price
of a typical note download?
So the actual
transaction price--
- our average transaction
- price--is around $4.90.
Do you get a cut
off the fee I'm paying?
So on average,
notehall will withhold
and then note takers
will earn 40%.
This is a great idea,
- and like other great ideas
- on the Internet,
- they get copied right away.
- Right.
- Tell me about
- your competition.
- We do have some other players
- in the space,
- and no one
- has gained traction yet.
- That--when I say we saw
- relatively great traffic
at k.U. And a.S.U.,
- it's because we gained 1,500
- new users in 6 weeks time.
Some of the leading competitors
in the space have been there
for a year and a half--
- Why the difference? Why weren't
- they able to get as many people?
- We've discovered a way
- to get content creators
- efficiently and effectively,
- and that's the lifeblood.
- Our competitors are just
- focused on trying to get
- as many users as they can,
- and no one's uploading
- any valuable content.
- And if they don't get
- the valuable content,
- students are not gonna continue,
- and not gonna grow virally
- like we've seen so far
at k.U. And a.S.U.
What are you
gonna use the money for?
- It's all
- for customer acquisition.
- You're gonna expand this - into other colleges.
- Ex-exactly.
And how many customers
can you get for that money
if you spent it entirely
on acquisition?
We can get at least
Sean, you came here asking
for $90,000...
That's right.
For 10% of the business,
and you think that the company
is worth $900,000.
Why is it worth $900,000?
Guys, I'm--
I'm gonna make it easy.
- It's too much of a start-up
- for me, so good luck to you.
I'm out.
You know what, guys?
I think it's a good idea.
It's just not for me.
I'm out.
Why is it worth $900,000?
You have 30 grand in sales.
At k.U. And a.S.U., we got
Of which you're not profitable
on that.
This is
your pivotal moment.
Your answer to Kevin's question
will determine, for me,
- whether I have an interest
- or not.
- It's because we're gonna make
- you $24 million in revenue
in four years.
What?
I'll bet half my company
on it.
How much?
Half.
- Whoa.
- Wow.
Wow. what confidence.
I'm that confident in notehall.
I-I know it's gonna succeed.
Wow, what blind confidence.
I love that.
Not blind.
All right,
I'll give you $90,000
for 51% of your company
and stay out of your way.
You run around,
you sign up every single college
base of students you can,
you deliver me
that $20 million,
and I'll take you public.
Or I'll sell you to a strategic
and make you filthy rich.
Or you could keep
that 1% for yourself,
and I'll take 50%
of the business for $90,000.
Barbara, what do you want
to do with this?
What--you have absolutely
no business here.
I have every business
being here. You know why?
- The single best business deal
- I've ever made
was when I used to trade
my english diagrams in english
class for math homework.
And I did it for six months,
and I got good grades
until I got caught.
- Absolutely don't need you
- near these guys.
- It works. That was illegal.
- This is legal.
You're gonna corrupt
these young minds, Barbara.
Not at all.
Right now it's 51%
for $90,000
from someone who's done it
to the tune of $3.2 billion.
- Let that roll off your lips--
- billion, billion--
- as you--
- Sean, before I hear
- that "billion and billion
- and billion," keep in mind,
there's one very, very
important thing. Don't ever...
- Do you have an offer
- on the table, Robert...
- Don't ever be...
- Or is it just noise?
- Don't ever be enamored
- by what something sells for.
It's more important what you get
to keep in your pocket.
Of course.
I didn't sell my company
for billions of dollars,
but I had 100% of the equity
when I did sell my business.
- It's about what goes
- into your pocket.
- Are you just trying
- to botch his deal?
- It's just--
- it's just noise.
Is this your first venture,
the two of you?
Yeah.
- I'm gonna tell you
- right now, poo-poo happens.
- Stuff you had no idea
- was gonna happen to you
- is going to happen,
- bad things will happen to you,
- and you're gonna
- have to endure all that.
- And I know that's gonna occur.
- You're gonna need more money.
I know all that already.
So we're giving 50% now,
but if you're saying
we need more money,
- we're gonna have to give
- another 20%, 30% then.
- We're not willing to make
- that sacrifice.
- What--okay, but look,
- 10%'s ludicrous for 90 grand.
What's your counter?
So we want to give 15--
For $90,000.
And we're gonna give
an insurance policy
on top of that.
What's the insurance policy?
don't hit $1 million in revenue,
Sean and I will give you
our portion of the company.
Now I look at you as guys
that are just like me with hair,
I'm just gonna take a taste
of your flesh, not all of it,
'cause I want you
to stay motivated.
I would do the deal
for 35% for $90,000.
This guy will eat you for
breakfast at every opportunity.
If you've gonna
be eaten for--
every little niche and a turn,
he'll be grabbing
some more stock.
- And believe me,
- he's an animal.
I have no doubt in my mind you
guys have a home run hit here.
Thank you.
Thank you.
I'm gonna offer you 25%
for the same amount of money--
- $90,000. I think you
- should take that seriously.
Definitely will. Thank you.
And I don't want
your guarantee.
So, Sean, I think
that you agree with me
that there is value
in having experience.
- The key
- to Internet businesses--
- you gotta know what you're
- doing. this is all I do.
I start from zero and ramp up
to $50 million like this.
This is your only play.
I'd like to offer you
$115,000
for $35%.
There are three offers
on the table,
but Robert has offered $25,000
more than the asking price
for 35% of the company.
All right, you know what?
I'll do the same deal he did.
It's time
to make a decision.
♪♪♪
- Robert herjavec has outbid
- Barbara and Kevin O'Leary,
offering $115,000
for 35% of the company,
but Kevin O'Leary
will not give up.
All right, you know what?
I'll do the same deal he did.
Even he doesn't want it.
And then you can--then you can
decide. then you can decide.
- Oh, all of a sudden,
- my offer's not very good,
- but you're matching it. - You know,
Robert, - I am gonna cloud your waters,
because you're a bozo.
So you're offering
what I offered.
All you did
is you tainted my deal,
- and now I have to match
- your offer,
and you will pay dearly
in the future.
- He's giving you
- a little window of opportunity
- to see your future,
- doing business with him.
- So let me--
- let me be clear.
In your inability
to be creative...
No, not at all.
- You--you're actually matching
- my offer?
- All you did....
- You called--
- guys, is that the kind
- of copycat thinking
that's gonna get you--i don't
think these guys are that dumb.
You know, the track--
the track record here
is all that matters.
- This guy has never done
- anything in consumer space,
anything in education.
There is no one else here with
my track record in your space,
end of story.
So now you have to make
a decision.
Before you make the decision--
because I think
my lack of experience
has been hit upon here, and I
think that's entirely unfair.
Because it's the truth.
Come on. I invested
in a young guy five years ago,
when he was desperate for money
on an Internet play.
I gave him only $100,000.
That's all he wanted.
Every dollar I'm spending
on the "shark t*nk"
is a result of that
smart investment.
- And, you know, the only thing
- I knew about the guy
is he was a winner.
Don't you dare underestimate
the power of your own instinct
on here.
And if you're feeling needy for
guys like this, you're dreaming.
- You really don't need them.
- You are going...
- It's picking
- the right players.
- You are going to pay dearly
- for this verbiage.
I-I hate to admit it, Barbara,
but that was a great speech.
It's the truth.
What--what is your offer?
My offer is $90,000 for 25%.
And you know what else?
If you don't like it,
six months later,
you can buy me out.
What?
Okay, that's just illogical,
Barbara.
Are you out of your mind?
$90,000 for 25%.
- In six months time, from
- the day we sign the contract
to that 6-month period,
at that point, you guys decide
if you want to buy me out,
- and if you do,
- you give me my money back,
plus 20% interest.
Did you come here today
just for cash?
I think you came here
for experience.
So I think I can put together
a better offer, but--
- and remember, I surround myself
- with Internet guys.
I know all the big players.
But I think that
a $90,000 offer for 25%--
and I think I can
persuade Kevin to come in,
and you've got two people
with experience.
What just happened there?
I think Kevin--
we just knocked us--
our equity down
because of the bank
of bozo Barbara?
Is that what happened?
I think it's really simple.
Do they want cash or do they
want money with experience?
All right, I'll do that deal.
Kevin O'Leary and Robert
have joined forces,
offering the same amount
for the same equity as Barbara,
but they are also bringing
their experience
- in education and the Internet
- to the table.
The new offer is,
we go in for 90k for 25%.
And, Barbara,
your--your madness--
I-I-i don't want you to infect
this company with your insanity.
You have to stay away
from it.
Do you take a loan--
- which is really
- what Barbara's offering you.
Not at all. Gosh.
Let's call it--hang on.
Let's call it what it is.
Or do you take the cash
with the experience?
Okay.
Barbara's deal?
Let's make millions.
Let's do this.
Yeah.
I love these guys.
All right.
You made a huge mistake.
Oh, gosh!
- Thank you.
- Thank you so much.
You're dead to me.
Barbara b*at you
with your own trick.
I forgot their names. I don't
want to talk about it anymore.
And it felt so good
to b*at him.
- I don't want - to talk about it anymore.
- You wore him out.
Barbara, you have infected
that company with your madness.
That's what's happened.
You've tainted that deal.
- I-i don't even want to hear you.
- I'm so happy.
I can't even think of
anything but the future.
The--the whole thing is--
- it's gone into some other place
- because of you.
- It feels so good to b*at
- this guy. I don't know why.
You're okay, Robert. I don't
get joy in b*ating you.
You know--
- but b*ating you?
- Oh! I love it.
Sometimes it's just worth
the money, right?
I can't believe it.
I got it.
What's he doing?
Yes.
Yes. that was awesome.
It was awesome.
It was funny. Yeah.
Barbara--she--she had confidence
in us from the very beginning.
Right. right. That's--
you know, she wasn't trying
to high--lowball us with 50%--
hold on. Hold on.
Hold on, guys.
Ho--oh.
Listen, what happened in there
was insane.
You just made a deal
with a real estate agent.
Does that make sense to you? She
doesn't understand what she did.
I'm gonna send her off
for therapy or something,
because that was insane.
If you were in our shoes,
you would've really taken
- And look,
- I'm not saying I blame you,
- but I don't know
- who the shark is here.
I think it's you.
I don't think so.
I don't think so.
Yeah, I think so.
Anyways, I just wanted
to congratulate you guys.
Yeah, thank you.
I think it's a fantastic
business. good luck with you.
Thank you, Kevin.
But I just--it--it's--
that never happens to me,
- so it didn't sit well with me.
- That's why I came in here.
- Anyways, good luck.
- Thank you.
Thanks.
We picked Barbara,
- because she was authentic
- with us from the beginning.
- Kevin was trying
- to take advantage of us,
- and we couldn't be happier
- with our decision.
Just weeks ago,
we met entrepreneur duo
Amy and Allison
and watched as they made
a $350,000 deal
with Barbara corcoran.
Time to make a decision, Amy.
All right, Barbara.
You're in.
All right.
- I think you made a mistake. - You made
- a big mistake...
You did not.
Horrible mistake.
- I don't think we did.
- Ladies, it's over between us.
Let's see
what they're up to now.
Oh, my god. Oh, my god.
- Here we are at the largest
- baby products show
in the United States.
This is
the most amazing product.
It's actually a slipcover
for portable play yards.
- Since making the deal
- with Barbara,
we've had so many doors open.
Soon coverplay will be
available at babies "r" us.
This is such a great idea,
because the one I have at home
is so gross inside now.
We have more orders than
we could ever possibly imagine.
Okay, so I want to do probably
the patterns for each store.
We contacted one of the largest
hotel chains in the nation,
and we're in the process
of closing a deal
that would put coverplay in
every one of their properties.
Sorry, we've been, like,
bombarded the whole day.
You can't just walk into a bank
and get a loan for $350,000,
so closing the deal
with Barbara
was the best thing that
ever happened for our company.
♪♪♪
♪♪
My name is Lisa Lloyd,
and I'm from Tucson, Arizona.
- My company is called
- treasure chest pets,
and it's the next,
best plush toy line.
I live with my husband
and three children,
my mother-in-law,
father and stepmom.
It's a very full house,
to say the least.
I personally have invested
about $100,000
and leveraged all my credit
for this business.
My house is even in danger
of foreclosure.
My entire family is counting on
this business
becoming a success.
It's become
more and more stressful,
and I have cried myself to sleep
more times than I can count.
Without the investment
from the sharks,
I can't fill the orders I have,
and my family could lose
our home real soon.
♪♪♪
Hi. my name is Lisa Lloyd,
and my company is called
treasure chest pets.
I am seeking $150,000
in exchange for 20% equity
in my company.
Treasure chest pets
is a new, patented line
of award-winning organizers
that look like stuffed animals
for children.
The puppy here has a pillow
that attaches magnetically
with different
secret spaces inside.
She has pockets
in both of her ears,
a secret drawer
that's hidden behind the pillow,
and pockets also
on both sides of the body
for storing more goodies.
When they're all done playing
and storing, they put 'em
right back together,
and it's like a secret.
The monkey here's real popular
with the boys.
- His pillow head also attaches
- magnetically.
This one opens up like
a treasure chest instead.
- They're made of foam,
- and that's how they're actually
maintaining their shape
and the continuity of a toy
while doing the function
of an organizer.
Okay, so what are
they gonna retail for?
$19.99.
What do they cost to make?
$4.75.
Are you selling them today?
I am. I'm in
about 200 stores now.
We just launched. Actually,
I started testing in the mall.
I sold 600 pieces by myself--
working very long hours--
at $30 to $19.99, te-testing
different price points.
How much sales have you done
in one year, the past year?
About $100,000.
Lisa, why aren't you
in a large retail store?
- Because you've gone to them,
- and they've said to you, what?
There's three box retailers
that sell 60% of the toys
in this country.
That's right.
- You and I know both know this.
- That's right.
- What did they say to you?
- What'd they say to you?
- I have not brought it
- to any mass retailers.
I've been focusing on
the boutiques for two reasons.
- Number one, I haven't had
- the capital to be able to grow
the company at that rate,
and I didn't want
to put my cart before my horse.
I wanted to make sure
we had the right product,
- the right manufacturer. - But, Lisa, why
can't you go - to a large mass retailer
with those three guys?
Because I'm undercapitalized.
I've gone, I think,
as far as I can without
the next infusion of cash.
- How much more
- inventory do you have remaining?
I have about, uh,
and I get orders every day.
Do you believe that those pieces
are gonna sell through?
They're already sold.
I have a stack of orders
- sitting on my desk
- for fourth quarter
- that I haven't even put
- in the system yet.
You know, engrained in my mind
like a laser are these numbers.
Toys--$30 billion.
- Plush--$2 billion.
- I know this market inside out.
I also know how brutal it is
to get distribution.
Lisa, if I invested
in a toy business again,
I would wake up
with nightmares.
You've done a terrific job
of presenting it,
and there's no question
in my mind
that this is a giant
distribution Jigsaw puzzle.
For me, it's not a place
I want to be in. I'm out.
Lisa, this is
where I have the issue--
when it's age-specific...
Mm-hmm.
- You know, 3 to what?
- 14.
- 14, okay.
- Mm-hmm.
- So that's--that's what
- I call a niche product.
Other than the other niche,
which is seasonal,
- this is a Christmas-time-type
- product,
so the age
and the seasonality of it
are two strikes against
the business for me.
I'm out.
- Lisa, what are you gonna do
- with the money?
Order more inventory
to handle
- the fourth quarter orders
- that I have.
Do you have those orders?
Hard copy, firm?
Yes, sitting on my desk
right now. Yes.
Lisa,
I would be
very comfortable investing...
But only $50,000,
which creates an opportunity,
but also a problem for you.
But I must have
my third share of 50%.
Barbara has made Lisa an offer,
but only for a third
of the money she needs.
Lisa must get another shark
to go in on the deal
to secure $150,000--
the full amount
she's asking for.
I have the power to do this deal
and make you filthy rich,
which would in turn,
make me richer.
Sounds good.
- I have unlimited
- manufacturing capabilities,
- so if you have orders
- up to $10 billion,
I could ship that tomorrow.
That would be awesome.
So here's what I'm offering--
I will offer you
all the manufacturing you will
ever need and distribution.
You'll handle sales.
But I would need 60%
of the company,
because you have
no more worries after that.
Now, Barbara, if you feel
you want to come in...
Am I being invited in?
Are you happy today, daymond?
Gee, I'm suspicious.
Yes, Barbara.
I'm going to invite Barbara
into my side of the deal.
Lisa has an offer
from daymond and Barbara
for $150,000,
but for 60% of her company.
Hang on, Lisa.
I think this is all crap.
I don't think they're being
as nice to you
as they think they are.
Fundamentally,
they're giving you 150 grand
for 60% of your business.
I'll make you an offer.
♪♪♪
Daymond and Barbara
have offered Lisa $150,000
for 60% of her company,
but Robert might be throwing
a wrench into the deal.
I'll make you an offer.
I'll give you $150,000 as a line
of credit against orders,
'cause that's
what you really need.
You just need cash flow.
It's the same thing
they're giving you.
And I'll give you that
for no equity in your business.
We'll work out
a standard loan rate.
If all you need is
a little bit of money
to get to the next step,
I'm happy to help you,
simply help you.
And he can go sell
his girl scout cookies.
What are we doing?
- She's a great lady.
- If she needs a helping hand,
I'm happy to be there.
The money
is not gonna solve it.
It's gonna be the shipping,
it's gonna be the billing--
well, listen--
it's gonna be--
let me talk.
Midnight, when it's lunchtime
in Taiwan and China,
and we're sleeping here,
they need customs
and clearances
and everything else.
I'm offering you everything--
the whole back office.
The value with me--
it helps her a little bit
to move forward,
but she doesn't have
to give up any equity.
The value with you is she has
to give up 60% of her business,
but she might get
more help long-term.
So I think Lisa needs
to decide.
- So this is
- the loan shark t*nk?
That's what you're doing?
Why don't we let her decide,
daymond?
I think that you're right.
If all I need is money,
that this would be
the best way to go--
a line of credit--
if I only needed money.
Um, but if I only needed
money, I'd need a lot more
than $150,000.
So I think what's in the best
interest of this company
and where--what it needs--
just put him
out of his misery.
It would be best to work
with the two of you.
Thank you.
So thank you.
Oh, thank you so much.
- I'm gonna make you rich.
- Thank you.
Thank you so much.
Thank you.
The Robin hood crap
doesn't work with me.
Yeah!
Oh!
Thank you.
- I can't help her in the way
- you can help her.
- What if you had made her
- second-guess it?
- No, you know what?
- I just needed her to be sure.
- Where is this coming from?
- Do you know her?
- I don't know her,
- but I've been where she's been.
- I just hope you're like this
- for everybody,
- because the next time
- I see something like that,
I'm gonna say, "Rob, stick your
nose in it and just be so kind."
- Ooh, I'm so scared, daymond. - Ooh!
- "I'm so kind."
I'm so relieved. This deal
is gonna change everything.
It's been so many sleepless
nights and working so hard.
- So many people in my life
- has seen how much I've put up,
um, put on the line for this,
and it all came together today.
Next into the shark t*nk
is Edwin heaven,
who believes
he has the solution
to an age-old mystery.
♪♪♪
Hello, hello, hello.
I'm Edwin heaven.
I'm the creator of throx,
the cure for the missing sock.
Throx likes to do things
in threes,
and we aim to please
in threes.
And I'm asking for $50,000
in exchange for 25% equity.
Let me ask you, what do you do
when you lose a sock?
Do you scream bloody m*rder?
Do you kick the washer/dryer?
Well, I have a solution--
throx--three socks.
One, two, three.
So when you lose one,
you still have a pair--
the cure for the missing sock.
Throx beats the competition
by a foot.
Edwin, I wonder,
is this a real product
or is this a cute gift item
that my wife is gonna buy
one time for our kids?
No, I believe
that throx has legs.
What are your sales today?
My sales today are $38,000.
For the year?
For--for the year. I've sold
I predict 80,000 units
in 2010.
Listen, Edwin, if you actually
started to take any market share
from the established
sock makers,
they could crush you like
the vampire cockroach you are
in two seconds.
You have no sales.
You have--
you don't even have .001% share
of this market.
I entered the market,
and I had to do it all myself.
Okay, if it works, and your
sales get to $10 million,
and I'm a large sock guy,
and I say, "you know,
hey, there's three socks here.
They're selling a lot."
"Get my secretary in here.
- "Get the head of production
- and marketing.
You see this? It's taking share
from us. Crush this cockroach."
Have you patented this?
You cannot patent
a package of three socks.
Right.
I am out.
I see it as a novelty product.
I can't see you ever making
money with this, so I'm out.
Edwin, I'd love to buy one
or two for Christmas
and get a smile
on someone's face,
but I don't see it as a repeat
sale, so sadly, I'm out.
You keep doing it,
but this is far, far too small
for me, as an investor,
to make any money.
For that reason, I'm out.
I'm gonna agree with Robert
that you should do this
by yourself for a while.
As an investor,
I would have to say, I'm out.
Thank you, Edwin.
Thank you very much.
All right, thank you.
The fact that the sharks
saw it as a novelty
is a bit disappointing.
Up next...
I actually come from a family
- that's got a huge background
- in the fashion industry.
- If you walk out of here
- and a bus runs you over,
you're gonna be sparkling
on the pavement.
I look both ways, always.
- The guy is the real deal.
- He's got orders. He's got--
he's the real deal
and he's a pig.
♪♪♪
My name is danon beres.
My company is
washed up Hollywood.
We manufacture designer buckles
and belts for men and women.
- Hey, guys.
- Hey-o.
What are you working on?
- My dad is a very successful
- belt designer.
- He's been in the business
- for over 30 years.
He's designed for very high-end
boutiques and celebrities.
I grew up watching my dad
design belts.
- I wanted to do the same thing
- he did,
and I decided to create
my own belt company.
Washed up Hollywood
is already successful.
- We've sold to major department
- stores and to celebrities
around the world.
I love this. I just
absolutely thing this is...
- This is cool.
- This is gonna be in
- a little bit later
- in the season.
- Washed up Hollywood
- is a family business.
- My brother and sister
- work with me.
It's very important to all of us
that we make our father proud.
I know my product's awesome.
- I know with
- the right investment,
- my company can grow
- much, much bigger.
You guys did
a really, really great job.
I have huge aspirations
- to make washed up Hollywood
- a huge business.
- If the sharks invest,
- I can guarantee
- their pants
- will never fall down.
♪♪♪
Hi, my name is danon beres.
- I'm c.E.O. Of the innovative
- fashion accessory brand
washed up Hollywood.
We're seeking an investment
of $500,000.
This is in exchange for 25%
of our emerging company.
Now our company
is most notably known
for our unique hardware buckles
and belts.
Ladies.
Thank you.
Thank you.
That's cool.
As you can see,
our belts are hot.
- They're designed for the elite,
- for the celebrity in mind.
But they're affordably priced
for everyone.
Our target market's
the 18-to 40-year-old males
and females.
Our belts have appeared
in magazines worldwide.
- I personally come from
- a strong family background
in the fashion industry.
In barely three years time,
- with my own
- small capital investments,
- we've steadily grown
- and become profitable.
Our belts have sold in over
This includes one of
- the top upscale department store
- chains in the U.S.,
- as well as a major chain
- in Canada.
- You sort of dropped some names,
- but I didn't hear them.
Out with them.
We're in parasuco jeans
in Canada.
- Okay.
- We're in nordstrom right now.
So what are your sales,
danon, overall?
In 2008, they were $435,000.
Did you make any money
on $438,000?
We're $50,000 net profit.
What's the price point--
the belt
you're wearing right now?
- The retail price point's
- from $55 to $99.
This is a $99 belt.
So the prices are good
for the quality.
You sell that belt for $100,
you have on?
Yes.
And what did you pay
to make that?
- This belt?
- It cost $40 wholesale.
How many belts have you sold
in the last 12 months?
Uh, it's about 10--
a little over 10,000.
You sold 10,000 belts
in the last year?
Yes.
Danon, didn't say your family
was involved in the business?
- You're correct.
- I actually come from a family
- that's got a huge background
- in the fashion industry.
My father, al beres,
designed belts for 35 years.
He sold to the high-end stores
and celebrities--
expensive, $1,000 belts.
- So basically, what I did when
- launching washed up Hollywood,
- I worked under his wing
- for 15 years,
- going to the trade shows,
- learning the business.
I wanted to make a product
that was at a lower price point
that could be sold
to the masses, basically.
- Who's your competition
- right now?
- We don't have
- a very strong competition
- for directly what we do.
- No one's at our price point.
- None of them really have
- the type of buckle--
the type of product that we
make, a stage-presence product.
Why--why are you better then?
You guys see the belts?
I mean, what--what do you see
- about all the belts
- that makes them different?
- What's the first thing - that catches your eyes?
- The design.
The buckle.
Who's your designer?
I'm the designer.
You're the designer,
and you're the c.E.O.?
That's pretty rare.
How much do you have
invested into this company?
I have over 120,000
of my own dollars invested in.
You're saying your company
is worth $2 million,
because you're asking
for $500,000...
Correct.
For 25%.
- We have over $150,000
- in assets.
Our sales
have been growing rapidly.
I like the product.
- I like the product.
- I like the revenue stream.
I think he's growing.
The only thing I don't like is,
I don't like the value.
It's a $2-million valuation.
You've got something
you've created
- that's gone
- from zero to $400,000.
But there's no chance
it's worth 2 million bucks.
I give you the $500,000,
how do I get my money back?
I think we can build our company
into a $32-million company
in five years.
I love the arrogance.
I love the confidence.
Apparel companies
are expl*sive.
I hate your valuation.
The guy is the real deal.
He's got orders. He's got--
- he's the real deal
- and he's a pig.
- What do you do
- with a guy like this?
- I think
- he's just playing with us.
Any second now,
he's gonna say...
- "Just kidding. Just kidding."
- "I was just joking a--"
- "I'm really worth..." - And give us
- the real valuation.
"$650,000.
Let's work together."
Is that what he said?
You think
we're worth $650,000?
Yeah.
I don't believe so.
Our sales are already--
you're worth--
our sales are approaching--
you're worth one and a half
times sales right now.
Look, you're
a very interesting character--
a c.E.O./designer.
Now there's a little bit
of a risk there.
- If you walk out of here
- and a bus runs you over,
- you're gonna be sparkling
- on the pavement with that belt.
That's the problem.
I look both ways, always.
Look, danon,
here's the reality--
- I think the business is probably
- worth $600,000 to $700,000.
If you wanted 25%,
I'd give you $100,000, $200,000.
But I can't give you $500,000,
'cause I'd have to own you
and every belt buckle
that you've ever made.
And all the ones you're going to
make for the next four years.
How frustrating you are.
You've got a real business,
but you're a pig.
You're greedy.
You're not leaving anything
for me to wet my beak
with at all.
Danon is seeking $500,000
for 25% of his company.
He must get the full amount
he's asking for
in order to secure a deal.
What does
the clothing guy say?
Is this a real business
or not?
That price is outrageous.
I do like the product,
but there's nothing different
from the product.
I can't tell that's his brand
- when it's sparkling
- and walking by on somebody.
As well as, these are buckles.
- Buckles are hidden under
- your shirt most of the time.
- And I just don't believe that
- he's sold that many units
- and did a half a million dollars
- in this kind of market.
- No, I can back that up.
- Of course.
- Wait a minute.
- I called him a pig,
- and you called him a liar,
- so he's a lying pig.
Yes, but a talented
lying pig.
What do we do with this guy?
♪♪♪
Danon is seeking $500,000
for 25% of the company.
He must secure the full amount
he's asking for
or he will walk away
with nothing.
- The sharks are interested
- in the business,
but they've hit a wall
in the negotiation
because he's valued
his company too high.
What do we do with this guy?
You have to
throw him out
because he was greedy
setting the price.
- Daymond, you've been
- in the fashion business.
You've seen how quickly it can
go from zero to a crazy number.
So I don't see
why this couldn't--
- because we're valuing you
- on today
and not the crazy number.
That's only--
danon, what you're
asking for is gambling.
There's a difference between
investing and gambling.
- Gambling is,
- you throw your money down,
- and maybe it rides,
- maybe you lose it.
Investing is, you take
the value of the business today,
add some multiple
for the future
and make a decision.
Why can't we have some upside?
We're taking all the risk.
- Well, you have no upside - at $500,000.
- That's my point.
- That's my point. - You're not giving us
- any upside.
- You're just taking our money
- and screwing us.
We're paying as if you were
doing $2 million in sales,
and you're doing $400,000.
It's crazy.
But the--
- look, there's--
- there's nowhere to go here
because there's no chance
I'm giving you $500,000.
I'd need 112%.
We need $500,000, though,
to take us to the level
- we want to be at.
- And I believe that our company
is worth $2 million. One of the
top denim brands in the world
- just started working with us
- on producing
some private-label products.
We're in the initial phases
of designing. It would increase
our business fivefold.
- It's an early-stage thing. - Danon, do
you understand, - on a private-label deal,
it doesn't extend your brand,
washed up Hollywood, at all?
That business, to me, is worth
less than building this brand,
washed up Hollywood, up.
Danon, I can't give you
$500,000 for anything...
That isn't
more than you own today.
I--it's crazy.
Big mistake
with the valuation.
I'm out.
I understand.
The numbers don't work for me,
and--and the risk doesn't
work for me, really.
- I'm--I'm gonna say,
- I'm out.
If you had come in here
with that right number,
- you would have with you,
- right now, the right investors.
It's really a shame. So I'm
so sad to say, I'm out.
You know, I've gotta say...
You've wasted
your own time today,
putting a crazy number on it.
That's become very clear to you.
- I think you know that now.
- That was a mistake.
- But worse?
- You've wasted my time.
I'm out.
You remind me of me
when I started.
You are confident.
- You're--you're running
- the company.
You're designing it yourself.
- But you're asking for just,
- something that we can't do,
and that's why we're mad.
You worked so hard to get here,
and you worked so hard
to destroy your opportunity,
just by that number.
Because of the number,
I have to be out.
Okay.
Yeah, we're all out.
Thank you.
We're done.
Thank you.
That's it.
♪♪♪
The sharks couldn't see
the big picture.
I don't regret going in there
asking for the amount
we asked for.
- I think the sharks
- definitely lost out today.
- I think they missed it today.
- They missed a big opportunity.
I like the guy.
He's a pig, though.
There's no way that company
is worth $2 million.
Not a chance.
All right. He's gone.
He's dead. He's vapor.
- I'll never think of him again,
- even when I look at my belt.
But you have a belt buckle.
I know, from a dead man.
Is it possible
that larger-size women
don't care about fashion
as much?
You are really ruthless.
You are really right.
I... don't know that much
about the beverage industry.
Ooh.
That's not something
you should've just said to me.
- Are you cutting him a check?
- I am gonna write you a check.
No!
Are you crazy?
Give me the money.
You must be out of your mind.
Don't do it.
Don't do it.
I'll give you $20,000
for therapy.
Oh, my. My, my, my.
01x08 - Episode 108
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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.