Claire Corlett

Fish Food, Fish Tanks, and More
How the Founder of Blueland Saved Their ‘Shark Tank’ Pitch With a Clever Offer | Inc.

How the Founder of Blueland Saved Their ‘Shark Tank’ Pitch With a Clever Offer | Inc.


– Hi, I’m Emily Canal, I’m Inc.’s resident Shark Tank expert, and this is Tips from the Tank. (upbeat music) – Today we’re talking about Blueland, which is a company that’s trying to reduce single use plastic by making
refillable household cleaners. Founders Syed and Sarah came into the tank asking for $270,000 in exchange for two
percent of their business which they created in New York City. When we normally think
about household cleaners, it looks something like this. You run out of a product, and you go and replace it at the store, but founders Syed and Sarah wanna change that behavior in consumers. – Our tablets come with a beautiful reusable forever bottle, so you never have to throw away another plastic cleaning
bottle ever again. Together we can eliminate approximately five billion plastic
cleaning bottles each year. – That really got the attentions
of on of the guest sharks on this episode of Shark
Tank, Daniel Lebetsky who is the founder of KIND Snacks. – We are all aware of the
problem with plastics, we’re trying to do everything we can to not destroy our planet
before it’s too late. What’s your unique selling
proposition or differentiation? – Syed and Sarah couldn’t
really answer Daniel’s questions about what differentiates them which cause some concern for him. While Daniel was asking these questions, the Sharks were also
firing their questions about fundraising, money,
evaluations of the two founders, so, we didn’t really get a clear answer as to what they think differentiates
them form other brands; however, we did learn
that the two founders have raised three million dollars at a 13.5 valuation and that
was from Venture Capital and other successful euntrepenuers. Those kind of numbers always
get the Sharks excited, and the then the founders
started talking about sales, that they had sold about
$200,000 worth of product just in the first month
that they were online, and that was direct to consumer. The fact that the
entrepreneurs were hoping to give away just two
percent of their company, is a big indicator as to how
the negotiations were gonna go. Very, very badly. – I don’t think you really
came here for a deal. You came for the commercial. I’m out. (upbeat music) – There was some side
negotiations happening while the sharks were
offering their deals, but Kevin was really the first
to get a concrete deal out. Sarah and Syed countered
Kevin O’Leary’s offer, by asking for three percent equity, which got Mark Cuban
laughing hysterically. At this point the sharks are
getting pretty pissed off. If you’re not willing
to budge on that equity, it’s a little disrespectful and doesn’t incentivize your
investor to work for you. Then, Sarah makes this genius call. She clearly understands Kevin O’Leary, and knows what he likes to do when he makes deals on Shark Tank. She turns to Syed, they
whisper for a minute, and she comes back at Kevin. – So Kevin? – Yes. – We know you like a good royalty. – Oh! – [Sarah] What if we kept
you at three percent for 270, but then we give you a
royalty of 50 cents per kit, until you make your money back? (dramatic music) – Done. (laughs) – Woo! – [Emily] The three
tips for this pitch are: know what makes you different, don’t mess up an opportunity, and strategize for your shark. Number one, know what makes you different. These founders had a
really compelling product, they had a really compelling story, but there was one thing
lacking in their pitch, and that is how they would
stand out against other brands, trying to do something similar. There are lots of
companies trying to produce more eco-friendly products, and products that will cut
down on single-use plastics. So what was this company
doing, that makes them special? Why should the sharks invest in them? And that was a question
they really couldn’t answer on Shark Tank. While they were still able to get a deal, that is something that every
founder should think about before they pitch investors, is what makes them different? Hopefully your idea is original enough that you don’t have to, but you should always have
that in your back pocket. Number two, don’t screw up an opportunity. The two founders came in, saying they were seeking $270, 000 for two percent equity. And right off the bat,
the sharks were gasping. That is a very, very risky
proposition for anyone. And yes, the sharks know that there’s going to be negotiations during the deal-making process, but that is still a very,
very low amount of equity to be willing to give up. Coming in, saying that
you’re willing to give up two percent equity sends a
message right from the start, and that’s what tipped off Mark Cuban. That’s why he got angry and said, I think you’re just
here for the commercial, for the publicity. So, off the bat, if you’re gonna go on
a show like Shark Tank, if you’re gonna pitch investors, you need to make sure that your equity is a reasonable amount to get them to work hard for you, and doesn’t insult them. Number three, strategize for your shark. Sarah made a brilliant move here, that ended up saving their pitch. It really looked like the
sharks were angry with them. They weren’t willing to
give up a lot of equity. Doors were closing very quickly, and then Sarah, seeing the opportunity to negotiate more with Kevin O’Leary, pulled out a royalty deal, which is something that Kevin O’Leary does very often on the show. If you’re gonna go on Shark Tank, or if you’re gonna pitch an investor, strategize a little bit ahead of time. Know which founders gravitate
towards which deals. That way, if you feel you’re
moment’s slipping away, like Sarah and Syed did, you can pull something out
that might save your deal. I’m Emily Canal, this
is Tips From the Tank, and never underestimate the
power of a royalty deal.

14 comments on “How the Founder of Blueland Saved Their ‘Shark Tank’ Pitch With a Clever Offer | Inc.

  1. We don’t need this video, how rude to nbc that you make a video and make money on their produced show. This lady is adding nothing to the actual episode, she’s boring.

Leave a Reply

Your email address will not be published. Required fields are marked *