Why did Young King Hair Care founders decline two offers on 'Shark Tank'?
The struggle between choosing to get a Shark on board or trying to retain the equity is very much real for the entrepreneurs setting foot into 'Shark Tank'. Husband and wife duo - Stefan and Cora Miller were battling the same predicament while pitching for their haircare brand catering to multicultural men called Young King Hair Care.
The Millers came in seeking $225,000 in exchange for a 2.5% stake. The entrepreneurs managed to impress Sharks with their niche product and also their growth story. The couple revealed that they went from $41,000 in sales in their first year of business to $300,000 in 2021 with a $9 million valuation. While the Sharks were intrigued by the fast growth, they were a bit disappointed when they realized that the company wasn't profitable yet. The Millers revealed that they were spending a lot of money on marketing to create awareness about their brand-new product in the market. This led to Lori Greiner, Daymond John, and Mark Cuban deciding to sit out on the deal.
Kevin O'Leary and Robert Herjavec noticed the immense potential that the brand had and decided to make an offer. Kevin went down his usual path of trying to squeeze in a royalty deal and made an offer of investing $225K in the brand but in exchange for a royalty of $1 per unit sold until $225K is paid off, then the royalty would drop to 5o cents in perpetuity. Mr. Wonderful made it a point to emphasize how he wasn't asking for any equity in his deal. Robert and the other Sharks felt that Kevin's offer was a bit too Sharkey, so Robert rolled out his offer.
Robert made an offer of investing $225K in exchange for a 5% stake and a royalty of 50 cents until $450K is paid off. Robert felt that even though he was asking for equity, his was a better deal as he wasn't asking for a perpetual royalty. After a brief discussion, the Millers decided to forego both the offers as they felt that a royalty deal wasn't in their best interests due to the cash-flow issues they were currently facing. So they politely declined both the royalty deals and walked out of the tank empty-handed, but determined to make their brand a huge success and hopefully return back to the tank in the future.
After watching the Millers' optimism and their pitch, fans began rooting for the couple and their brand. A fan tweeted, "I like this @YoungKingHair product! I hope it does well tonight! @ABCSharkTank #SharkTank." Another fan wrote, "These ppl are on to something bc there really isn’t curly/ textured hair products targeted to boys #youngkinghaircare #SharkTank." "Young King, hope they make it #SharkTank," added a fan.
'Shark Tank' Season 13 airs every Friday at 8/7 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.
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