'Shark Tank': Did Springer Pets founders snub Kevin O'Leary by closing $400K deal with Lori Greiner?
With two offers before them, Griffin and Shannon weighed the pros and cons of both the offers and finally decided to close the deal with Lori
Mr. Wonderful aka Kevin O'Leary was left red-faced when Springer Pets founders Griffin Ross and Shannon Ross decided to close the $400,000 deal with Lori Greiner instead of him. The recently aired episode of 'Shark Tank' featured Griffin and Shannon pitching for their brand- Springer Pets which manufactures water bottles for dogs. The entrepreneurs walked into the tank seeking an investment of $400,000 for a 6% stake in their brand.
Though the Sharks felt that the bottle's design and innovation were great, they however, weren't impressed with the low sales and profit margins despite having close to 80% markup in sale price compared to the manufacturing cost. The Sharks especially Robert Herjavec felt that the founders were more concerned with sustaining their livelihood by paying themselves a salary of $70,000 instead of focussing on growing their business. So he and the other Sharks decided to sit out from making a deal. This however, didn't deter Kevin or Lori Greiner, who felt that the product had a lot of potential.
Kevin first bit the bullet by rolling out his royalty deal. The Shark pitched an offer of investing $400K for a 3% stake and a royalty of $3 per unit sold until the $400K is paid off and then the royalty would drop to $1,50 in perpetuity. Lori stepped in and made a more reasonable offer of $400K for a 10% stake and preferred stocks. Even Lori was worried about getting a return on her investment just like Kevin but decided to take the preferred stock route instead of Kevin's royalty path. With preferred stocks, Lori would get paid first whenever the profits are being distributed, making it a win-win situation for not only the founders but also Lori.
With two offers before them, Griffin and Shannon weighed the pros and cons of both the offers and finally decided to close the deal with Lori. While Lori was happy over bagging the deal, Kevin sat in the corner side-eyeing the trio as they celebrated the deal.
'Shark Tank' Season 1 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.