Mark Cuban rejected these Michelin-star chefs’ truffle pitch — until they convinced him to invest $500K
Each year, many budding entrepreneurs appear on 'Shark Tank' to pitch their business ideas and impress the esteemed Sharks. At the end, their goal is to walk away from the ABC business program with a deal. However, getting a Shark onboard after they have already dropped out is a remarkable feat. During an episode of 'Shark Tank' Season 12, chefs Jason McKinney and Tyler Vorce presented Truffle Shuffle, a San Francisco-based business specializing in luxury truffle products and virtual cooking classes in front of the esteemed Sharks. Following their pitch, McKinney and Vorce got a few offers, but they managed to convince Mark Cuban to jump back in and seal a $500,000 deal.
In the episode, McKinney and Vorce were seeking $500,000 in exchange for 5% of their business. During their pitch, Vorce said, "We're two chefs that met while working at a three-Michelin-star restaurant. We are directly in charge of sourcing the finest and most expensive ingredients on the menu, especially the truffles. We learned that you have to work directly with truffle hunters; otherwise, you could be paying top dollar for fakes. We started this company to help chefs and consumers source honest truffles and create our own line of truffle products."
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After providing a small demo of their cooking classes, the founders of Truffle Shuffle handed out their products to the Sharks. The entire panel loved the product with Lori Greiner saying, "Oh, my, it smells so good." Soon after, Daymond John asked the duo about the cost of their truffles. As per Market Realist, McKinney responded, "White truffles go up to $5,000 a pound." Soon after, McKinney revealed that they sell a jar for $20 and it costs them $2.80. When asked about the sales, McKinney shared that the company's year-to-date sales for the online classes were $1.4 million, but they only made a profit of $8,000. Later on, the duo disclosed that each kit for their classes costs between $95-$125.
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Following that, the Sharks came down to business, with Greiner being the first Shark to back out. John also followed in Greiner's footsteps and dropped out as he didn't see eye to eye with their valuation. Cuban went out next and told the entrepreneurs, "It's going to take you far more capital than you're anticipating and because you're doing multiple businesses it's going to take so much of your time that it's going to be very difficult to pull all those pieces together, so for those reasons, I'm out."
On the other hand, Robert Herjavec showed interest in Truffle Shuffle and offered $500,000 for 20% equity. Immediately, Kevin O'Leary entered the chat and offered $500,000 but as debt at a rate of 9.5% over three years in exchange for 25% of the company. After listening to the two offers on the table, McKinney and Vorce asked Herjavec if he would join Cuban for a joint deal. An annoyed Herjavec said, "Why do I need Mark? What am I, chopped mushroom?" A big twist in the tale came when Cuban quipped, "I can come back in. I'll offer you $500,000 for the 20%." After a little back and forth, Cuban and the aspiring entrepreneurs agreed on $501,000 for 18% equity.
