'Shark Tank': Why did VoChill founders walk away from Kevin O'Leary's $300K deal?
LOS ANGELES, CALIFORNIA: VoChill founders Lisa and Randall Pawlik stepped into 'Shark Tank' seeking an investment of $300K in exchange for 5% stake in their winter glass cooling accessory business.
After hearing out the duo's pitch, unfortunately, all the Sharks aside from Kevin O'Leary decided to sit out from making a deal. Citing reasons from lack of knowledge to criticizing the product's design, the Sharks had several reasons to avoid rolling out a deal. Despite his fellow Sharks' reluctance to take the plunge, Kevin boldly decided to make an offer. After declaring the company's $3.75 million valuation as rubbish, the Shark proceeded to make his infamous royalty deal.
Kevin made an offer of investing the requested $300K into the company, but in exchange, he wanted 10% equity, and a royalty of $2 per unit sold until $1 Million was paid off and then the royalty clause would permanently be gone. Though the Pawliks were flattered by Kevin's interest in their brand, they were hesitant about his royalty clause, as they wanted to retain the cash and reinvest it into their business instead of paying royalties to Kevin. So they tried making a counteroffer without the royalty clause. They asked Kevin if he would be willing to take on 8% equity and let go of the royalty clause instead. He refused to budge, by pointing out that he needed to recoup his investment amount, and also needed the extra incentive to keep him interested in the business.
So, after some deliberation, the Pawliks decided to politely decline Kevin's offer by citing their issues with the royalty clause and left the tank empty-handed. Later, in their green room interview, the duo explained that they would continue to work on growing their business with or without a Shark's help, while Kevin felt that his royalty deal was a fair one.
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC.
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