Featured Image Credit: ABC
Topics: Business, Technology, Money, Film and TV
Michael Slavin
Agreeing to be on a show like Shark Tank must be especially stressful for everyone involved.
If you’re the person going in to pitch your business, you will know that not only does the next meeting play a huge factor in the success of your livelihood, but millions will be watch you if you crash and burn.
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Now, if you’re on the side of the sharks, you may be cushioned by their mile high stacks of money surrounding them, but if they drop the ball and miss a hall-of-fame level idea, everyone will know about it.
Unfortunately for them, that is exactly what happened back in 2013, when the Sharks not only missed a big idea – but missed out on being on the ground floor of what would later become a literal billion-dollar company.
Believe it or not, prior to changing their name – the company behind the Ring doorbell appeared on Shark Tank.
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Back then, they were called ‘DoorBot’, but with predominantly the same concept.
Jamie Siminoff, the founder of the company, went on the show to ask for $700,000 for a 10% stake in the company, which would’ve valued ‘DoorBot’ at $7 million.
Ring would later go on to be sold to Amazon in a $1 billion dollar deal, with the help of Shaquille O’Neal, who would in 2016 hire an equity stake in the company and become a spokesperson.
Of the Sharks, only one even made an offer.
Mark Cuban, the former owner of the Dallas Mavericks and entertainment magnate said: “I like it, I think you’re going to do great. But I’ve got to be able to say that when I jump in, I’m going to be able to add enough value that this company that’s worth $7 million could be worth $80 million, $90 million.
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“I just don’t see that progression and for that reason I’m out.”
In Mark’s defence, the company didn’t become worth $80 million.
It became worth a billion, but that’s beyond the point.
Kevin O’Leary - aka ‘Mr Wonderful’ - made an offer of $700,000, but with a major catch.
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The money would not be an investment, but a loan, and he would receive 10% of sales until the loan was paid off.
Further, he would collect a 7% royalty on all future sales, in addition to receiving 5% equity in the company.
Thankfully for Siminoff, this offer was turned down.
This 5% equity would’ve later equated to $50 million for O’Leary, and if he’d taken their offer straight up from the start, would’ve received $100 million in equity for just $700,000.