Did Lori Greiner 'scam' Legacy Shave founder Mike Gutow? Here's why 'Shark Tank' fans are upset with the $700K deal
LOS ANGELES, CALIFORNIA: The Legacy Shave pitch on the recently aired episode of 'Shark Tank' managed to bring out a totally different side of the Sharks that left fans with mixed feelings. The usually shrewd and stone-cold Mr Wonderful aka Kevin O'Leary was moved to tears when he heard the story of how Mike Gutow, founder of Legacy Shave's father left a prototype for the shaving brush and urged Mike and his brother to pursue their dream of launching the shave brush business. While on the other hand, the usually kind and generous Shark aka Lori Greiner unleashed her really Sharky side by offering a deal that many fans felt was "scamming" Mike out of his business!
Mike walked into the tank seeking a $300K investment in exchange for a 10% stake in his shaving rush brand that could deliver a mess-free and clean shaving experience. Though the Sharks were moved by Mike's very moving and emotional backstory, they were, however, put off when they learned that the business had run out of money. This prompted Mark Cuban, Barbara Corcoran, Robert Herjavec, and even Kevin to sit out from making a deal. Though Lori initially seemed a bit hesitant about investing her money into the business, her eyes immediately perked up on hearing the word patent. Mike explained how he held the patent for the the unique brush and could be used not just on shave cream cans but also on aerosol spray bottles, and various other cans. This prompted Lori to make an offer. The QVC Queen decided to take a leaf out of Kevin's book and extend a royalty deal. But unlike Kevin she wasn't seeking royalty, instead, she wanted to buy out Mike's entire business for a million dollars and offer him a royalty of 3% of net sales for perpetuity.
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Considering how Mike and his brother launched the brand to honor the legacy of their father, the other Sharks felt that it was an unfair ask and urged Mike to make a counteroffer by throwing in the "schmuck share". Mark explained how a schmuck share worked by pointing out that a business owner could choose to retain a very small percentage of his. her share in the company after the company is brought out so that they could continue to reap the benefits of the company's success despite not being the majority partner or owner of the company.
Mike then made a countered Lori's offer by asking if she could allow him to retain a 5% stake in the brand. Lori felt that since Mike would still have some interest in the company, she decided to tweak her offer by bringing down the amount that she was willing to offer to buy out the company. She brought down her $1 Million offer to $700K and retained the 3% royalty clause and gave Mike the 5% equity. While Mike was pleased about bagging an offer from Lori, 'Shark Tank' fans however didn't share the same feeling.
Many fans felt that Lori took advantage of Mike's situation- his business running out of money and no other Shark's willingness to invest in the brand. A fan tweeted, "Mike got scammed by Lori #SharkTank." "Do you think they made a good deal with Lori? It seems kind of sad they gave up most of their company. #sharktank," wrote a fan. "He's smart to keep SOME equity for his own legacy. I respect him more for that. Not so much Lori for taking advantage of the situation and giving that much less money though. #SharkTank," pointed out a fan. "Am I the only one who’s really mad at Lori for this tonight #SharkTank," wondered a fan.
Do you think they made a good deal with Lori? It seems kind of sad they gave up most of their company. #sharktank
— Digital Megaphone (@digimegaphone) November 19, 2022
He's smart to keep SOME equity for his own legacy. I respect him more for that. Not so much Lori for taking advantage of the situation and giving that much less money though. #SharkTank
— 𝔄𝔫𝔡𝔯𝔢𝔴 ℭ𝔬𝔩𝔩𝔢𝔱 (@AndrewCollet) November 19, 2022
Am I the only one who’s really mad at Lori for this tonight #SharkTank
— •Finn• (@Phasmopolitan) November 19, 2022
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC. Missed an episode? Been wanting to catch up? Episodes can also be viewed the next day on demand and on Hulu. Not just that, you can also watch old seasons and episodes on Amazon Prime Video and iTunes.
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