The following are actually REAL negotiations between entrepreneurs and investors (Guppies & Sharks). The sharks invest their own money at their discretion. The guppies get devoured into a belly of finance, or spit back into the ocean of hard knocks to fend for themselves. The entrepreneurs must convince the sharks to invest the FULL AMOUNT, or walk away with NOTHING.
THE GUPPY: James Mitchell
THE COMPANY: Pure Ayre
SYNOPSIS: Pure Ayre is the only safe and natural odor eliminator on the market today.
SEEKING: $150K for a 10% stake
PRODUCT/SERVICE: Pure Ayre is the only 100% food grade edible odor eliminator on the market.
WHAT'S THE SKINNY?: The product is not patented. He's sold almost $315K worth last year. the year before he sold $1/2 Million and $170K of it was to Walgreen's but they lost distribution at Walgreen's when a large competitor had them terminated. He hired a CEO to bring in a consulting firm to project how much money it would cost to support national retail for the product and the answer was $4 Million.
STATS: Hurry, hurry, step right up, welcome to Ringling Brothers Barnum & Bailey Circus. This guppy is very interesting, his interaction with the sharks is somewhat comical making the show very entertaining to watch. James has an investor that he co-owns the company 57% with. Family and friends own the rest. He raised $600K for the business and it's all gone. He got kicked out of a national retailer, and there are other competitors. James says, the guy he hired was not even a professional CEO before he hired him. Robert wants to know if James called a large company to try to license it and James said that was his job to do that, but it never got done. Daymond wants to know also if anybody affiliated with his company has talked to a major producer of this type of product in the last two years. James finally admits that he talked to a division about a week ago. Barbara wants to clear the field early and drop out asap. Kevin Harrington drops out due to the fact that James ran through $600K with nothing to show, and he also thinks James doesn't know what he's doing. Daymond offers to bring his knowledge to the market for $150K for a 50% stake. Kevin O'Leary decides to make the bold and daring offer of buying the whole company outright for $150K with 100% equity + a 7% Royalty to James for the rest of his life, but promises to FIRE him as soon as he does, telling him it's the best news James has heard today, and that his deal will make James very rich. James thinks he has star power, but he can't seem to answer anyone's questions directly. Kevin doesn't care, he wants to fire James anyway. Robert also wants to know if James is willing to walk away from the company. James can't seem to answer Roberts question and Robert drops out. James decides to step out in the hall and call his wife. While he does that, Kevin O'Leary decides to pull Daymond to the side and split the deal with him and fire James the second he writes the check. The new offer is that Kevin and Daymond offer to buy James company for $150K take his formula, license it, pay James 7% for the rest of his life and fire him the second they write the check, LOL (sorry James, I didn't mean to laugh). James looks shocked and undecided and turns the offer down. Then Robert hops back in the water and offers to bring another $75K to the table, splitting the deal with the other 2 sharks, bringing the offer up to $225K for 100% + 7% Royalty. James turns it down also. The guppy swims back into the ferocious waters of commerce to fend for himself with no investment.
CAME IN SEEKING: $150K for a 10% stake.
WALKED WITH: Not a chance in hell ..... well, maybe
GRADE: (Guppy): F
GRADE: (Sharks): A
COMMENTARY: I don't even know what to say after this one. I'm with Kevin O'leary, ............ "UNBELIEVABLE." good luck James. Maybe the competitor that shut you down at Walgreen's will buy you out to eliminate you now that you got a lot of free pub.
WHAT DO YOU THINK? COULD HE HAVE GOTTEN THE SAME CAPITAL (OR HIGHER) WITH A LOWER STAKE? WHERE THE SHARKS FAIR IN THEIR NEGOTIATIONS? DID BOTH PARTIES COME OUT ON TOP? POST YOUR COMMENTS AND TEST YOUR NOODLE AT THINKING LIKE A BILLIONAIRE...........