According to billionaire Mark Cuban, the “hardest part” of being on ABC’s “Shark Tank” is saying two words: “I’m out.”
“We’re all long-winded at some level when we go out because that’s the hardest part of the show,” Cuban told fellow Shark Barbara Corcoran on a November episode of “888-Barbara.” “You want to sound smart and you want to contribute something to the entrepreneur. You want to leave them with something of value.”
Sunday’s episode seemed to illustrate Cuban’s point when several of the investors still tried to one-up each other with tales of selling their businesses in the midst of turning down a pitch.
Not all the Sharks were initially biting at a pitch for the SlumberPod, a cover that can be put over a travel crib to give babies a dark place to sleep. (“It’s a tent,” Shark Robert Herjavec pointed out.)
Lori Greiner said she wasn’t interested because she didn’t think mother-daughter co-founders Lou Childs and Katy Mallory needed investment from a Shark. The founders said SlumberPod had no debt and was already profitable. The co-founders said the company did $556,000 in sales in 2019 alone.
Greiner said it reminded her of her own success, because she didn’t get outside investment in her own business early on.
“I think about, sometimes, if I had given away a percentage of my business, would it have been right for me? Or was it better that I had to figure out everything and do it myself, which made me stronger, smarter, better and not a one-person company anymore,” Greiner said.
“I don’t say this often, but I think you should continue to do what you’re doing. Because I truly believe that. I’m out.”
Then Corcoran chimed in: “I want to add to Lori’s story if I may,” she said. “Something happened to me that was a real lesson in my career.
“I was in a terrible real estate recession. I owed the whole world so much money and Merrill Lynch came and offered to buy my [real estate] business. They offered me $250,000,” Corcoran said. Then “they changed their mind. I thought the sky had fallen.”
But it wasn’t the disaster Corcoran thought. “It was only five years later I sold my business for $66 million,” she said. “To Lori’s point, be careful when you sell your stock.”
However Corcoran added, “that being said, I want to take advantage of you.” She offered the founders $400,000 for a 25% stake in the company and a royalty per unit sold: “Every time you sell something, you name the number, I just want some kind of payment so I know I’m getting paid back first,” Corcoran said.
Kevin O’Leary also offered the founders $400,000 as a loan at 9% interest for a 7% stake.
But before the SlumberPod founders could respond to the offers, Cuban shared the story behind the business that made him a billionaire.
“I’m gonna share a story similar to Barbara’s,” he said.
“When we started Broadcast.com, we were the first streaming company in the country, and Microsoft got into that business. Microsoft invited us up and we started talking about an offer,” Cuban said. “To Barbara’s point, we thought we were right there for an offer that was going to be $75 million. We didn’t get that offer.”
However, just “two years later, we sold for $5.7 billion [to Yahoo] because we didn’t take that offer.”
“I’m out,” Cuban added.
After all the tales of selling their company for millions or billions and the advice, the SlumberPod founders countered Corcoran’s offer, asking for $400,000 for 20% stake without a royalty, and she accepted.
Like this story? Subscribe to CNBC Make It on YouTube!
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”