'Shark Tank': Why did Robert 'prohibit' Hampton Adams founder from taking Kevin's offer?
While Mark Cuban has a notorious reputation of being brash on 'Shark Tank', it was a real surprise to see the usually mild-mannered Robert Herjavec put his foot down on the recently aired episode of the ABC entrepreneurial show.
Robert joined forces with Mark to warn Hampton Adams founder Seneca Adams from taking the infamous royalty deal from Kevin O'Leary. Seneca, the founder of the athletic tape brand Hampton Adams, stepped into the tank seeking $500,000 for a 10% equity stake in his company. After delivering a pretty cool pitch for his athletic tape, when the Sharks began talking numbers, Seneca revealed some shocking facts about running a business. Though his sales were well worth over $5 million, he was only making 20% net profit from the sales. The entrepreneur explained that he was basically breaking even by investing all his earnings back into the business to boost production and sales. He described it as 'feeding the beast'.
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When he proceeded to share about his humble beginnings which included having to split a $1 burger with four of his siblings, the Sharks especially Barbara Corcoran and Mark Cuban were moved. Despite being impressed by his drive for success, Lori Greiner, Barbara, Robert, and Mark decided to sit out from making a deal, leaving only Kevin in the running. Considering the low-profit margins, Kevin was worried about how he would get his money back if he were to make an investment. So he decided on rolling out his infamous royalty deal and made an offer of investing $500K for a 10% stake plus a royalty of $1 per unit sold until $1.5 million is paid off.
After listening to Kevin's offer, Robert and Mark immediately began pointing out how Kevin's offer was a bad one and prohibited him from taking it. They explained that he would go out of business trying to pay back Kevin. Robert instead suggested Seneca sell his company to one of the big players in the industry and use the learnings and money from the sales to launch another business. Kevin tried wooing Seneca into taking the deal by pointing out how he was the only Shark who believed in him enough to invest in the business instead of just giving him advice.
But after listening to all the Sharks' views and opinions, Seneca decided to politely decline Kevin's offer and left the tank with no deal. He revealed in his green room interview that he would take Robert's advice and try selling his company.
'Shark Tank' Season 13 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.