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A best-selling 'Shark Tank' product once led to major tension between Mark Cuban and Kevin O'Leary

“He’s the worst at valuations,” Mark Cuban said at the time, about Kevin O’Leary on 'Shark Tank'.

'Shark Tank' judges Kevin O'Leary and Mark Cuban have been good friends for years. However, even best friends may disagree when it comes to business. For instance, when businessmen Nick Morton and Evan Mendelsohn introduced their 'Tipsy Elves' sweater line, asking $100,000 for 5% equity, O'Leary criticized the valuation and labeled the sweaters 'ugly'. Cuban, on the other hand, praised the founders for their concept. The pitch led to a clash between the two Sharks.

Before showcasing their quirky Christmas sweaters down an impromptu runway, Morton and Mendelsohn made their pitch to the Sharks, hoping to snag a deal. Their samples, handed to the panel, sparked mixed reactions. O’Leary was the first to remark, “This stuff is hideous.” He added that not only were the sweaters unattractive, but the valuation was equally unappealing. As reported by Fandom Wire, he said, "We know the sweaters are ugly but also the valuation is ugly. Why don’t you try and defend why this is worth $2 million…I’m looking at it saying you have to give a discount for the fact that there’s risk in the seasonality."

In response, Cuban dubbed O’Leary the worst at valuations and challenged his point of view. He said, "You know what, don’t ever listen to Kevin on that stuff. He’s the worst at valuations. Your problem is not valuation…Yeah, because some of us know how to grow past valuation." Despite Cuban defending the brand, he ultimately chose not to invest, as did Lori Greiner and Daymond John. This left the 'Tipsy Elves' founders with two options. One was a deal from O’Leary and another one was from Robert Herjavec. In the end, they chose to stay away from Mr. Wonderful’s sharp critique and instead opted for Herjavec’s offer, striking a deal for $100,000 in exchange for 10% equity.

'Tipsy Elves' appeared in the 12th episode of 'Shark Tank’s fifth season, in 2013. At the time, the brand, launched in 2011, had already proven itself a money-making machine and showed no signs of slowing down. Founder Mendelsohn was a lawyer while Morton was a dental surgeon. The idea for 'Tipsy Elves' struck during the rise of a quirky holiday tradition: young adults flaunting their sweaters at Christmas parties as a tribute to cringe-worthy childhood gifts. 

Morton and Mendelsohn first connected as undergrads at the University of California, San Diego. Years later, Mendelsohn gave Morton a call, pitching the idea of joining him in a quirky side project. The duo plunged into the business venture, investing $140,000. They sought advice from business-savvy friends and used Morton's family ties in China to find a low-cost supplier. They created their designs for each item, producing high-quality sweaters that outperformed those of their competitors. 'Tipsy Elves' were successful because of their unique combination of high-quality materials and humorous imagination, as reported by Business Insider.