Shark Tank's Kevin O'Leary makes surprising stumble as tries to buy out Moonies
LOS ANGELES, CALIFORNIA: The idea of making men's swimwear with a large back window may sound ridiculous to most people, but McKay and Karisa Winkel, the owners of Moonies Swimwear, saw it as an opportunity to turn a playful DIY joke into a profitable venture. With a dedication to comedy, excellence, and environmental consciousness, the pair infused their free-spirited personalities into the final product.
When they presented their bold design to the investors in Season 16, Episode 4 of ABC's 'Shark Tank', they undoubtedly made them laugh but couldn't secure a deal. Their goal was to inject innovation into men's swimwear after decades of stagnation in the fashion industry.
Moonies walked into the Tank after only $1K in sales
The co-founders of Moonies entered the Tank with a $150,000 offer for 35% of their company. They shared that the business began as a side project, and the Winkels had patented their unique design just one month before appearing on 'Shark Tank'. When they disclosed that they had barely made $1000 in lifetime sales, they had already lost the Sharks.
On its website, Moonies Swimwear offers swimwear for men in both open-window and closed-window designs. While the open-window form has the advantage of natural ventilation, the closed-window type features a layer of clear plastic in the garment's rear opening. Each swimsuit is priced at $45, regardless of the style, and costs $12.50 to produce. However, the Winkels assured the Sharks that by ordering in bulk, they could reduce the production cost to $9 per unit.
Sharks couldn't get behind Moonies business framework
Mark Cuban acknowledged that there is a market for Moonies there, but the creators need to learn more about it. He ultimately decided not to make an offer, as he couldn't see how he could contribute to the business.
Shark Daniel Lubetzky felt that the company is not progressing as it ought to. Based on their sales numbers, he believed the entrepreneurs weren't putting in enough effort. As a result, he also decided not to invest.
Although Robert Herjavec thought the idea was entertaining, he was unable to support the company and chose not to make an offer. Kevin O'Leary continued by likening the business to Rounderbum.
Kevin O'Leary doesn't like royalty when it comes to entrepreneurs
Kevin, being Kevin, asked the founders to sell their patents to him, offering $150,000 for 100% of their company. Lori Greiner appreciated Kevin's thoughtfulness for once but believed the Winkels deserved far more than $150,000. The co-founders attempted to entice Lori by highlighting their women's swimwear, hoping to draw her in, but she ultimately decided to back off.
In the end, the co-founders sought to reason with Kevin by accepting his offer but wanting a royalty of $5 per piece. Kevin, the royalty-loving Shark, could not have denied that offer sooner. The couple's second counter-offer was that they would sell the patent for at least $500,000. When Kevin turned that down, they walked away from Tank, calling the Shark "greedy."
The pair seems dissatisfied that Kevin did not include any flexibility in the deal. They walked away from the Tank, furious and frustrated at Kevin's selfish attempt to shut them out of the deal. We say, trust your gut! Moonies made the correct decision by not giving up such a huge stake to Kevin. People make similar mistakes with investors and then struggle to repair them.
'Shark Tank' Season 16 airs on Fridays on ABC at 8 PM ET.
For those who miss the episode, it will be available on demand the following day and on Hulu. Additionally, viewers can explore past seasons and episodes on Amazon Prime Video and iTunes.
