‘Shark Tank’ founders pitch futuristic vending machine, get roasted by Mark Cuban — still land $1.5M anyway
'Shark Tank' contestants need to come prepared for all circumstances, it seems! During an episode of 'Shark Tank' Season 15, Dan Braido, Audley Wilson, and Andy Siegel introduced their new burger concept, RoboBurger, in front of the Sharks Mark Cuban, Kevin O'Leary, Lori Greiner, Barbara Corcoran, and Michael Rubin. For those wondering, Roboburger is a burger vending machine that can serve a fresh burger in approximately 4 minutes. However, Cuban wasn't happy with the trio's pitch as well as their business model and described it as a 'huge mistake.' Despite the harsh criticism from Cuban, the founders of RoboBurger left the ABC business program with a deal.
In the episode, Braido, Wilson, and Siegel were asking for $1.5 million for 5% of their company. During the pitch, Wilson said, "Sharks, we've all been there searching for hot, delicious food, especially in off-hours and remote locations. This is because food service requires huge capital expenditures, long-term leases, and while flipping burgers seems simple, keeping a kitchen staff is harder than you think, but what if you didn't have to go through all that? What if we fit the whole thing in a 12-foot box that only needed electricity to operate?"
Soon after, Siegel quipped, "Sharks, welcome to the future of fast food, RoboBurger. The world's first fully autonomous robotic miniature restaurant that freshly cooks a hot and delicious hamburger in under 4 minutes, but I know what you are thinking, how good could it really be? It's flipping delicious. The RoboBurger provides a restaurant-quality experience. The Robo Chef grills the patty buns, toasts the buns, adds the condiments, and delivers it all piping hot." According to CNBC, O'Leary described their presentation as "chaotic" and said, "I've heard enough. I'm an investor, I've a million and a half dollars. I'm going to get half of 5% of this company, inputting a $30 million valuation. How do I make money? All the rest doesn’t matter."
However, Braido, Wilson, and Siegel struggled to answer the questions of the Sharks. Meanwhile, Cuban shared, "Look, you know the field of robotics, it's a leapfrog industry where you hit one plateau and then somebody comes along and optimizes and then there's a new chip that comes along there's new software that comes along and so if you were to come to us and say this is a licensing play right and we can keep pushing up our technology that's one type of conversation that would be interesting but you said you're using your technology effectively in a vending machine. Vending machines are hard capital assets that cost a lot of money. By the time you get your 25th machine out there, the technology is different because you’re driven by the physical location and the physical leasing. I think that’s a huge mistake. So for those reasons, I'm out."
On the other hand, Rubin showed interest in RoboBurger and said, “This is a big idea, and for that, I commend you guys. I just don’t think you have the business model right. But I think this could be very successful ... If it actually works, it could be massive. It could be a multibillion-dollar business.” Soon after, Rubin offered $1.5 million, with “market rate” interest payments and a 10% stake in the company as conditions. Corcoran chimed in and called Rubin's offer "greedy." Later on, Rubin and O'Leary teamed up and made an offer of $1.5 million as a loan at market interest rates for a 10% stake. Then, the RoboBurger founders asked O'Leary and Rubin if they were willing to reduce their equity to 8%, but they declined. However, O'Leary and Rubin agreed to a 9% equity and the budding entrepreneurs accepted the deal.