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: Chris Spencer
THE COMPANY: Hydromax
SYNOPSIS: A way for kids to get hydration access in between plays on the football field.
SEEKING: $60K for a 25% stake
PRODUCT/SERVICE: A waterspout system that mounts to any pair of football shoulder pads that will allow players access to water on the field while playing.
WHAT'S THE SKINNY?: It costs $8.50 to manufacture and sells for $49.99. He had $100K in sales back in 2007. He hopes to get a distribution deal so he can shift his focus to his company and run his business.
STATS: Chris happens to have a very good idea, but his full time corporate job doesn't give him the time he needs to put into his business and the sharks notice this. Kevin O'Leary wants to sit at home and eat Bon-Bons while his money works for him. He likes the idea of saving kids, but takes note that Chris doesn't have the time to put into his company and he's out. Daymond thinks Chris's evaluation of his company is way off and he's out. Barbara doesn't have the contacts or the time to put into it and she's out. Robert thinks Chris idea is clever, but also doesn't think Chris has the time and that he needs to find a way to make sale's calls to make it happen. Four sharks down, 1 to go. Jeff thinks Chris has a great idea but doesn't have the time to do it. His solution is that Chris needs to go out there and find someone to help him run his company. He loves the idea. He offers $50K for a 50% stake. Chris takes it and walks away with the investment.
CAME IN SEEKING: $60K for a 25% stake
WALKED WITH: $50K for a 50% stake
GRADE: (Guppy): B
GRADE: (Sharks): A+
COMMENTARY: Chris got his deal reluctantly but I think if he could just find a way to put more time into his company or, find someone who will, he would be in a much better position. He didn't get the $60K he wanted, but got only $10K less than that, and considering that he doesn't have a lot of time to put into his company, that's pretty good. Good Luck Chris!
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...........