get a once-in-a-lifetime chance to pitch the sharks in hopes of getting an investment to start, grow, or save their businesses. we rent digital books for $5 a day. are you nuts? i have spent zero marketing dollars. you're just a marketing machine. narrator: the entrepreneurs must convince a shark to invest the full amount they're asking for, or they'll walk away with nothing. you're saying it's worth a million dollars? absolutely. how many have you sold? 450. you are an inventor, not an entrepreneur. o'leary: you will have no hair. you will both look like me when this is over. narrator: if the sharks hear a great idea... you have a great business. ...they're ready to invest using their own money. [ laughter ] and they're willing to fight each other for a piece of the action. i want 70%. 70%?! what is wrong with you? i have a guy.

i'm not gonna give you all the verbal diarrhea you just heard. cut that crap out. now it got a little serious here. kevin, come on, work with me here, kevin. listen, i'm mr. wonderful. i know everything. narrator: who are the sharks? they're self-made millionaire and billionaire investors who are entrepreneurs themselves. kevin o'leary is a venture capitalist who turned a $10,000 loan into a software business worth $4.2 billion. barbara corcoran went from waiting tables in manhattan to building the city's preeminent real-estate empire. daymond john is a fashion and branding expert who grew his homemade clothing line into the globally recognized fashion brand fubu, with over $6 billion in retail sales to date. robert herjavec, the son of an immigrant factory worker, is now a technology mogul who sold his first internet companies for over $350 million.

and mark cuban, notorious billionaire entrepreneur, tech guru, and the outspoken owner of the nba's dallas mavericks. my name is pat crowley. i live in beautiful salt lake city, utah. and i'm the founder of chapul. [ dog barks ] as an environmentalist, i'm very concerned about the future of our planet. and so that's what inspired me to create an eco-friendly energy bar. right now we work in a very small kitchen, and we make all the bars by hand. our product is the first of its kind in the world. it contains an extremely healthy, sustainable form of protein that we like to refer to as our secret ingredient. hello. chapul. this is pat speaking. we're growing every month, and we can't keep up with demand. we need an investment from the sharks to increase our production and get the word out about our amazing product. yeah, stoked on the new design. it looks good. starting chapul has been a challenge. people have called us crazy

and said that the idea would never work. wanting a deal today goes well beyond my desire for personal success. i want to propel this protein as the food of the future. my name is pat crowley, from salt lake city, utah. my company is chapul, and i'm asking $50,000 in exchange for 5% equity in our company. at chapul, we're changing the way people think about food, and we do it with an energy bar. but what separates us from the thousands of competitors isn't the delicious medjool dates or the organic dark chocolate. no, it's our sustainable, eco-friendly form of protein that goes into every single bar. i'll show you, but first, a joke. [ laughter ] why are frogs so happy?

uh-oh. why? why? because they eat what bugs them. [ laughter ] and now, so can you with chapul cricket bars. oh, you got to be kidding. crickets are an extremely sustainable form of protein. they go into each one of our bars. ohh. i-insects are eaten in over half the countries around the globe, and we think that it's about time that americans catch up with the rest of the world. there is no way i'm eating that. [ laughter ] all right, we have a thailand-themed coconut ginger lime. t-this one? yep. aztec bar is dark chocolate coffee cayenne. and then we have an all-american peanut butter and chocolate. why not? right? herjavec: they're crickets, not cockroaches. correct. we actually make a flour out of the crickets... thank you. ...so you won't see any legs or antennae. [ laughter ] you first. must we eat it? sure. you're obviously jumping at the opportunity here to get on board with a growing global business. so, who wants to join chapul

and help us to feed the revolution? you realize that there's a huge barrier... absolutely. ...around this product. absolutely. some very large percentage of consumers are going to be revolted because in our north american society, they don't eat insects. i'm not saying it's good or bad. they just don't. i agree. so, what i'm trying to determine, because i'm trying to be pragmatic -- i'm happy to invest in it if i can make money. sure. so, we modeled our energy bar after the sushi industry. 30 years ago, eating raw fish was completely repulsive to americans, and -- until a man by the name of ichiro mashita craftily developed the california roll, and it was a gentle introduction. and so, that's what we're doing with our ener-- but that took 20 years. cuban: tell -- talk about sales. okay, so, we -- to date, we have, uh, $50,000 in sales, and this year, we're averaging 33% increase month over month revenue. so, over what period of time would you say $50,000? oh. that's in just under a year.

where are you in retail? natural-foods stores, bike shops, rock-climbing gyms, crossfit gyms. you're saying it's worth a million dollars? absolutely. well, why can't i just get my own crickets and make my own bars? [ laughter ] w-we've spent a lot of time developing the supply chain and working with the fda, and we're the only ones right now with an insect-based nutritional product on the market. only one that can sell cricket bars? we're the only ones doing it. and one bar -- what do you sell it for? $2.99. and to make it? it costs about a dollar. where do you get your crickets? do you grow them yourself? you catch them? we work with -- we work with a cricket ranch, actually. [ laughter ] and do you -- do you -- they have -- they have little lassos. little cricket brands. where is there a cricket ranch? we've been raising crickets in the -- in the united states for over 100 years, and it was based on -- why? fishing bait, then it was reptile feed, and now that was one of the reasons we chose crickets, is because the infrastructure is already in place to grow them at a large scale. are cricket farms enclosed? they are, and th-that's one of the environmental benefits,

is that you can grow them in a warehouse, and it's significantly fewer acres to grow more protein. i'm interested in how they meet their end. you put them in a blender and they stay to the sides, and they fall down and get s-- fried? what happens? we freeze them. that's about the best way to go. so it's -- it -- actually, their natural metabolism just slows down. [ laughs ] pat, what does this replace? like, do i eat this and it's half the size of a normal bar? a bar with other all-natural and organic ingredients... right. ...would have half the protein that that does. so, you grind your crickets up into flour? our name, chapul, is actually an aztec word for "cricket," 'cause they would do the same thing. they would gather crickets, blend them up into a flour, and make a protein-dense bread. look, i got to tell you. i'm -- i'm a pretty brave guy, but snakes, bugs... not brave enough, huh? ...freak me right out. so there's no way i'm eating this stuff. thank you. i'm out. o'leary: let's -- let's talk about the crickets, because you didn't tell the whole cricket story. the truth about crickets are that they are considered

a very important insect in many countries around the world. crowley: absolutely. they're considered lucky. absolutely. for example, in china, people think it's incredibly unlucky to kill one, even accidentally. how do you know that? [ laughter ] listen, i'm mr. wonderful. i know everything. it's considered really bad karma to kill them, let alone freeze them. you got a whole bunch of crickets right here. they're not chirping 'cause they sense danger. i agree. i agree. that's what they sense. you -- they know they're gonna die a horrible death with you. i just think, in this case, those crickets are telling me to stay out of this deal. i'm out. corcoran: i have to hand it to you. i ate that, and it tastes great. i can't tell the difference, and i'm relieved to find out that that crunch that's on my tongue are not the legs of the crickets and all that kind of goofy stuff. cuban: [ laughs ] i think it's gonna be a heck of a long journey to convince people that they're gonna love to bite into something with crickets in it. i just think it is. and whenever there's a long journey in a business, it means it costs you more money to get there.

i'm out. we-we've been very concerted in our growth right now. we've been intentionally trying to fly under the radar to some degree, u-unsuccessfully. we've been in national, international publications because of this. i can't wrap my head o-- around this. i spend most of my life trying to get away from bugs, not eat them. [ laughs ] so, i'm sorry. i'm out. all right, let's do this, mark. let's do this. cuban: me and you. okay, jiminy. [ laughter ] with the work you've done to create cricket flour, you're basically saying there's no competition at all? there's a couple of up-and-coming companies. what are they doing compared to you guys? what are they using for flour? they don't have a product yet. they've asked us to sell it to them. and we're -- we're debating right now whether we should actually do that. and why -- what's the debate? our business model is not to invest in infrastructure, and so i'd prefer to purchase the flour at some point if i could

and just be the brand behind... wait. ...the insect movement. i thou-- my understanding was you own the flour, right? we do. we do. you created it, that you're -- no one else has this flour but you. correct. from an fda perspective... right. ...you're the only one that's approved, right? correct. so why not have -- go to these other guys and say, "okay, we'll sell you our flour at, you know, "three times what it costs us to make, but you have to brand it 'made with chapul flour'"? that's what -- that's why i say we're -- we're on the fence, and that's what we're going to do if we decide to sell the flour. why wouldn't you do that? it's a great idea. i got to tell you, the longer you're talking, the more i realize you -- you have a great business. but the business is the flour. the business is not the energy bar. come on back in.

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narrator: four sharks are out, but robert may have had a change of heart. herjavec: i got to tell you, the longer you're talking,

the more i realize you -- you have a great business. but the business is the flour. the business is not the energy bar. the business is the flour. come on back in. we do have a lot of people saying, "when are you gonna sell the flour, when are you gonna sell the flour?" right. one reason i've held off on doing that is that i'm -- my passion is the sustainability of our food systems. i love the fact that you're exclusive. you have no competition. i mean -- yeah, it's great. i'd like to be able to help you, but it's not worth my time for 5%. sell me. i-i'd be happy to take more money. i could do that for you, if you want. oh, really? [ laughter ] that is so generous of you, but it doesn't work for me, right? okay. sell me. yeah, okay. so, we're projecting $150,000 in sales. i'm -- i'm -- we're past that, right? okay. we're negotiating. like i'm saying, we are at the brink. we're on the whole -- forget that. we're negotiating. he's past all that. talk money. talk money. we're negotiating numbers. you want me to come back with another offer? yeah. you got to make it cricket sweet for him.

make me an offer. all right, so, i-i know what it takes to lead a team, and i need to maintain complete ownership, so i need to maintain 51% to lead the team that i have. okay, so you have other investors? not investors, but, uh, employees -- founders. that have equity? that have equity. you have 80%? i have 80%. right. so...let's do 10%. make me an offer. this is going to be... make me an offer. ...a $100 million business in the next 5 years. with any luck at all, you might show a profit before you're dead. 15% i could do, mark. are you nuts? pat, i'll give you the $50,000 for 20%. ooh, somebody jumped back in.

i'll do it for the 15%. 15%? yep. let's do this, mark. let's go make some chirping money. appreciate it, buddy. thank you very much. he snatched that one from you. corcoran: [ laughs ] cuban: let's eat some crickets. yeah, let's eat some crickets. good job, man. thank you very much. robert, here's your consolation prize. oh, don't come near me. [ laughter ] oh, my god. crowley: i definitely gave away more equity than i wanted, but now that mark is one of our partners, we can't be more excited to just take this to the next level and really feed the revolution. you cost me 5%. i'm not gonna let you live that down. i'm gonna get that back. you were trying to get 20% out of him? yeah. yeah, but robert ruined that for you. [ groans ] they are so ugly. narrator: this season, we watched eric child and spencer quinn strike a deal with lori greiner for their multi-purpose repair product, fiberfix. lori... you have a deal. good.

narrator: let's see what they're up to now. [ train whistle blows ] prior to "shark tank," we had only done about $300,000 in sales. but since "shark tank," in only three months, we've done almost $6 million in sales nationwide. look at that. 10,000 units. one of the reasons we decided to partner with lori is because we knew she brought a ton of expertise in home shopping. here we go. look at this. that was fiberfix. unbelievably strong, this stuff. quinn: the day after "shark tank" aired, we were able to get into one of the most coveted positions on qvc. we have now taken orders for over 10,000 kits. [ laughs ] and we were able to sell through 45,000 rolls of fiberfix in only 10 minutes. we have sold out of everything that we brought in. hey, we got to get 2,000 boxes out today. can we do it? [ cheering ] all right! let's do it! child: we've had so much demand since "shark tank" that we've had to move into this 8,200-square-foot facility, and we now have a dedicated factory that's producing over 10,000 rolls of fiberfix every day. fiberfix can now be found in home depot, ace hardware, true value,

and many other retailers nationwide. we like to think that we're continuing the tradition of american innovation. it's awesome to be able to create jobs and provide a living wage for lots of employees. our most exciting news yet is the deal that lori helped us put together with lowe's. we're rolling out to all 1,800 stores nationwide. so, do you all love it? hey, look who's here. hey! greiner: i've never seen a product like this one. there's nothing else out there like it. this is mandatory for everybody to have in their home. i think fiberfix is going to be enormous. child: doing our deal with lori has collapsed three to five years of growth to just a few months. it's been an amazing ride so far, and we're excited to see what the future holds. all: fiberfix it! whoo!

aflaaac. aaaa-flaaaac. someone's sandbagging. i'd be tired too. he paid my claim in one day when i got hurt. one day? serious hustle. serious duck. in just one day, we process, approve and pay. one day pay, only from aflac. ah! it's tough, but i've managed. crohn's disease. but managing my symptoms was all i was doing. so when i finally told my doctor, he said humira is for adults like me who have tried other medications but still experience the symptoms of moderate to severe crohn's disease. and that in clinical studies, the majority of patients on humira saw significant symptom relief. and many achieved remission. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal infections and cancers, including lymphoma, have happened;

as have blood, liver, and nervous system problems, serious allergic reactions, and new or worsening heart failure. before treatment, get tested for tb. tell your doctor if you've been to areas where certain fungal infections are common, and if you've had tb, hepatitis b, are prone to infections, or have flu-like symptoms or sores. don't start humira if you have an infection. if you're still just managing your symptoms, ask your gastroenterologist about humira. with humira, remission is possible. this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it.

chase for business. narrator: next up is a product that solves an alarming security issue every homeowner should know about. hello, sharks. my name is bryan white. and my company is the garage door lock. and i'm here seeking $275,000 for 30% equity in my company. there! it just happened. there's a home invasion every 15 seconds in this country. so, think about it. what's the biggest door in your house, and which is the only door you never lock? the garage door. most people never give it a second thought because most people don't realize how easy it is for thieves to break in. there! it just happened again. the door is open in seconds, and all you're left with are some old, rusty paint cans and oil stains on the floor. the garage door lock is the answer.

it's a steel deadbolt that automatically locks your garage door to protect your belongings and to give you peace of mind. the garage door lock is universal. it works with all openers on any door. we lock every other door in our home. why leave the largest one unlocked? so, come on, sharks, let's close the deal and lock this thing up. bryan, my garage door is locked all the time. no, your garage door is not locked all the time. that's a facade. you're telling me that my traditional garage door, that i use my clicker on -- i have for years -- that's not safe? somebody can just walk in there, open it up just like this thief did? correct. wow. if you could imagine breaking into a locked vehicle with a slim jim and -- or a coat hanger, it's very similar. wow. you know that guy that -- from the hood that i'm always talking about? [ laughter ] there he is. hey, that's him right there. o'leary: okay, so -- herjavec: so, how does your product work, bryan? how -- how do we -- how do we solve this horrific problem that is all over america? will it actually stop the madness? stop the madness. the way it works is when you -- when you push your remote that comes with the lock kit, the lock will unlock, then you would -- you would close it,

and it would lock a-automatically. o'leary: so, hang on. is this an add-on that i put on to my existing garage door? yes, you don't need to replace -- but why -- but why doesn't the manufacturer that sold me the door in the first place just do the same thing? why do i -- why are they selling me a crappy garage door? white: they're all sold, they're all made the same way. do you install it yourself? it's a do-it-yourself product. it comes with all the hardware needed and the instructions to do it. and how long does it take to install? white: for me, about 45 minutes, but it would take somebody that's never done one before probably about a couple hours. and what do you sell it for? we're selling them now for $249.95. how many have you sold? total to date -- 450... ...for about $112,000. and where are you selling them at? just online. we have ze-- i have spent zero marketing dollars. i've just put up the webs-- how do people find -- how are people finding you? usually after they get broken in. bryan, here's the biggest problem with your product. how are you gonna educate the market for this? well, that's -- that's part -- that's why he's here. yeah. exactly. that's what i was depending on you guys for. i -- you know?

that's not your strength, huh? hmm. oh, that's a tough one there. so, you know the problem for -- i've taken it this far. have you done a video for youtube or anything? yes, i have a youtube video. and have you gotten much response to it? yes. actually, the sales spiked in 2010 when that video went up. and did you do a follow-up? no. you're just a marketing machine. [ laughter ] o'leary: so, bryan, if i invest -- i love the honesty, though. john: bryan, can you -- i love the honesty. i can't help it. it's who i am. bryan, since you said -- bryan, would you like to go to retail with this? yes. but do you know anything about that? what's your history? well, i have invented a -- you ever been parasailing, or you know what parasailing is? yes. i invented the device that launches parasails from a boat and pulls it back in. but i see those all around the world. right. well, that patent's long expired. that was back in 1979. were you broken in? is this how you invented -- that's how i came up -- yeah. i was living in a condominium where there were, uh -- the garages were separate from the residence. people were going out and buying the -- you know, the padlocks. and they would have to go out, unlock the door, open the door, get in the car, back it out. how much money did you put into the business to get it started? we've got $250,000 into this,

not including the patent money. o'leary: you're a -- you've built a better mousetrap. get that. now, i don't know how to sell it unless i want to come and work with you in your garage and do all the marketing myself. if you could get me in front of the -- the right people and get in the big-box stores, i will do the work. i'm probably the most -- hardest-working guy you ever met. and i do have a confidential agreement to be introduced to a large garage-door manufacturing company. what do you mean, to be introduced to them? i have a guaranteed introduction. that's one we've never heard of. yeah, i've never heard that. what does that mean? white: that means the -- the person i'm working with is very good friends with the owner of a major garage-door manufacturer. oh. you know, you got to be careful with stuff like that. anybody who's charging you for introduction or stuff like that is usually, uh... a crook. yeah, so you've got to be careful with that. can i tell you what you're missing in this deal? the most important ingredient. you're missing an entrepreneur. i am sure you are probably the nicest person

we've ever met, period. thank you. however -- but still, she'll insult you. however, i can't even imagine you walking into a big-box store, i can't imagine you tracking down billing, getting paid, even if you had the sale. you are an inventor, not an entrepreneur. i don't think you're gonna have a easy time at all getting people to invest until you have a great sales front linked with your arm, standing right there with you. um, that's what i was hoping to get here. okay, well, until you get that, i'm out. well, uh, you know, it didn't take me long for you to demonstrate how easy and shock you into seeing... corcoran: terrific product, no doubt. ...how valuable the product is, so i don't know that it's that hard to do. the business is worthless until the product is sold. bryan, i'm not gonna give you all the verbal diarrhea you just heard from barbara. that's not -- cut that crap out. i'm just going to say that this opportu-- a little respect here. having said all that, i got to get a door lock. there's no question about it. so i'll probably go online and buy one from you

because you've scared the pants off me. yeah, me too. but the opportunity is not evident to me on how i give you $275,000 and how i make a lot back because you're missing so much. i'm out. i'm sorry to hear that. thank you. i just know that there's a huge market. there's $1.3 billion spent on steel garage doors. bryan, i don't think anybody's contesting that there's a huge market there. but you don't have the infrastructure in place for a salesperson, and that changes the economics, and you're looking for us to do it. i'm not in a position to do that, and so, for those reasons, i'm out. thank you, mark. john: i'll tell you what i'm gonna do. i'm gonna make you an offer. it's a kevin o'leary play. it's put this in my licensing division and see if we can get somebody to... oh, grasshopper, you've learned. ...go out there and, uh, do something. i think that america needs to know

how to protect themselves, needs to help themselves. every homeowner should know about this. i'll give you $275,000 for 40%, but it's contingent on us finding a license. you should say yes. s-sorry. hang on. what was the offer? $275,000 for 40%, and my only intention is to license it. here's the offer i'll make you. $275,000, and i want to -- in exchange for 70%. 70%?! that's my offer. what is wrong with you? i have a guy who -- who does this and sells products like this. i have absolutely no doubt in my mind i could put you in front of those buyers immediately. we have the same exact offers on the table, except for robert, the greedy savage he is, he wants to take 70%.

yeah, bryan, my -- my friend, he's the largest manufacturer of car covers in north america. robert may have a closer relationship with this one outlet. i'm gonna go after five or six. robert wants to take 70%. those offers are usually done in nigeria and kuwait and things of that nature, and i want to take... [ laughs ] via e-mail, right? ...yeah -- 40%. o'leary: okay, bryan, we've got two offers on the table. you'll get your $275,000 from daymond. he wants 40% of the equity, contingent on licensing it to a manufacturer that solves your marketing problem. robert has a special friend that knows this industry inside out. there's no contingency, but he wants 70% of any revenue stream. you keep 30%. he gets 70%. he'll solve your marketing and manufacturing problems also. but that's a crime. what are you going to do?

daymond, would you counter at 35%? you got a deal. done. you got a deal. robert, i really like you. don't talk to him. he's a crook. herjavec: bryan, i hate you! [ laughter ] i hate you! i had no idea. bryan, get the hell out of here! thank you. i'm sorry, robert. i hate you! i really like you. i like him better. oh! ouch! there goes a good man. robert, i never heard an offer from -- from you like that before. what happened to you? it's a lot of work. i do know it's a lot of work. it's a lot of work to get this done. oh, whoa. yeah. white: i struck a deal with a millionaire. it's gonna get my product out there. it just feels fantastic. i can't even tell you how i feel.

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so instead of waiting on hold, we'll call you when things are just as wonderful... [phone ringing] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. narrator: next into the tank is a quick fix to a daily problem. hi, sharks. my name is max valverde. i'm from boston, massachusetts, and i'm the creator of morninghead. of what? morninghead. ah. ah. of course. i'm seeking $25,000 in exchange for 20% equity in my company. i try to exercise every day after work. i love mountain biking, rock climbing, basketball, you name it. after i get a good sweat going, i come home, hit the shower, and hit the hay. the next morning, i'm still totally clean,

but my bed head is insane. and the last thing i want to do is take another shower. for years, i tried wetting my hair in the sink. water gets everywhere, and you never really get the back of your head. morninghead solves this problem once and for all. it's a reusable, washable cap with a super-absorbent material on the inside. simply add water to it. allow that water to absorb. put it on your head. once it's on your head, you rub it around for a few seconds. let that water absorb into your hair. no water dripping down your neck, mind you, so you can do it anywhere, even if you're fully clothed. [ laughs ] and seconds later, your hair is completely wet. no mess. bed head's gone. you can then style your hair as you normally would, as if you just toweled off after a shower. max, what do you think the chances are i'm going to invest in that? [ laughter ] kevin, daymond, daymond, kevin, you guys are the lucky ones. no hair, no problem, but for the rest of us, basically anyone who's ever had bed head without the need or the time for a shower has a real use for this product. our internet popularity

coupled with your capital and expertise ensures morninghead is poised to catch a viral wave, create a paradigm shift in morning grooming, and in 12 months' time... [ laughter ] ...one or more of you will be able to tell friends your best move of this year was getting morninghead. here we go. this is our first run. i designed all this, basically. thank you. this is a diaper you put on your head. hey, it works. o'leary: it's a shower cap. i think that's the challenge. it's a diaper. right. but check this. we'd be lucky if we sold 10, 20, 100 of these things. we've sold 7,000 in over 42 countries. this is a big product. what? now it got a little serious here. you sold 7,000 of them? exactly. for how much? so, right now they're -- we're selling them for $7.99 on our website. our cost is $1.19. we're gonna get that closer to $1. the margin is sick. what were your total sales to date? to date -- $36,000. how long have you been in business? 18 months. john: why do you need the money? what's the $25,000 gonna do for you? here's why we need the money. if i can purchase in a slightly larger bracket,

we'll be able to get the cost from $1.19 down closer to $1. and how do your customers find you? what i've done is i've made my own videos. we -- we've had 165,000 views on our website. to me, that says for every 1,000 people who sees our video, sees our marketing message, we are getting 34 caps sold. you're not living off morninghead, are you? no. what else do you do? so, i'm a mechanical engineer. i have a list of inventions, a list of stuff i want to do. what else you got? this sucks. no -- kevin, think back to after college when you had those big -- that big mop of hair. yeah. you never wet your hair in the sink? you never -- i-i actually did, and i remember those days fondly. he never had hair. but it -- i just can't see this as a big business, max. this is basically a shower cap. [ laughs ] valverde: it is. it is. with a -- with a bumper sticker on it. but we've sold 7,000 units in over 42 countries. no, i get it, max. it's just -- you know, it's a tchotchke. and you're a great sales guy. yeah. what a waste of you. and so i say you take some of the other ideas -- what are your other ideas, max? w-what's next?

mark, i learned long ago -- about five years ago, i had -- you know, i have pages of inventions. i was working on five, six things at a time. i really need to devote time to one thing at a time. and you've done a great job of this. i -- this is an easy-money product. it's good. it's a big hit. but it's not enormous, and it's not gonna go anywhere. you're not gonna be, you know, on the forbes 400 -- "the inventor of morninghead, $6.7 billion net worth," right? there's got -- "retail locations everywhere." [ laughter ] valverde: i see what you're saying, but that's why i'm not coming in here for a million-dollar valuation. we're pricing at -- based on our -- our last quarter's run rate -- look, i -- i get it. i love it. it's hysterical. if you had told me you have three different follow-up products, i'd invest in a heartbeat. but you don't. for that reason, i'm out. well, h-here's the thing, mark, is that we are -- our -- our users have been writing in asking for bulk orders. users are asking -- bulk orders? yes. well, why wouldn't you sell it to them? o'leary: like, max -- no, we are. we're selling -- what for? because they're disposable. they -- they only last about six months. so people are writing in -- what? oh, no. so they want five years' worth of morninghead?

yes, they do, and they're asking for a subscription-based program. a subscription-based program? [ laughter ] $2 a month. $2 a month. oh! max, i have some good news for you. enough. don't laugh too hard at the guy. ah. let me speak up. may i speak up? all right. so, max, let me ask you something. let me -- wait. no, no. i'm speaking. pipe down, little man. barbara's speaking, young daymond. please. oh, i'm sorry. i'm your perfect customer, honest to god, because i wash my hair every other day, and it's true -- the second day, if you shower at night, your hair looks terrible. right. but bad news for you is i discovered another solution. it's called a damp face cloth. i rub it around, and i have perfect hair. it's totally unnecessary. i'm out. here's the thing, barbara. you of anyone should know that -- that a funny name and a gimmick can go a long way with your "pigtails" and with -- no, this gimmick is -- yeah, this gimmick is not gonna go too far. max, i just don't see the vision for this product. i'm out.

max, it's not a scalable business for me. it's an item, and i think you're gonna make a good amount of money and have some fun with it, but i can't help you here. i'm out. kevin, come on, work with me here, kevin. no, no, no. you like -- this -- no, this -- this -- this company -- high growth potential. you'll get your $25,000 back. max, max. no problem. this qualifies as poo-poo on a stick. i'm out. i'm out. good luck. good luck, max. good luck to you guys. thank you very much. let's try it out. wait. there's merit in the product. [ laughs ] valverde: all laughing aside, morninghead is a serious business, and contrary to what the sharks are saying, morninghead is going to be a million-dollar company.

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narrator: next up is an affordable study solution for starving students. hey, sharks. my name is kasey gandham. and i'm mike shannon. we're from chicago, illinois, and our company is packback books. we're seeking $200,000 in exchange for 10% equity in our company. sharks, let me ask you all a question. do you remember what it was like to be a college student? well, sharks, there's been a serious epidemic on the rise since your college days, and it's the cost of textbooks. hey, mark, did you know

that since the time when you hung up your hoosier hat, textbook prices have risen 812%? in fact, the students are even dropping out of their courses in order to avoid the book cost. they are compromising their education. but that's not the worst that can happen. take a look at this. when you buy textbooks from the book store, you end up broke. [ groa]s when you end up broke, you have to get a job cleaning windows on campus. when you clean windows on campus, you look in and see parts of your professor you wish you hadn't. huh? aah! when you see things you wish you hadn't, you fall off a 10-story building. groans ] when you fall off a 10-story building, you wind up in a full-body cast and can't lug your expensive books to class. when you can't lug your expensive books to class, you sadly flunk out of college. oh, no! and when you flunk out of college, you end up back in your mom's basement... hi! ...eating cookies on the couch in a onesie. groans ] don't end up eating cookies on the couch in a onesie. use packback books. clever. shannon: packback books is a website offering pay-per-use access to digital textbooks. a student simply logs in, selects the book they need,

and bam, they have immediate, affordable access to their books. our e-textbooks are fully equipped with highlighting and note-taking capabilities, and we're already working with major u.s. textbook publishers to bring the packback service to students nationwide. sharks, who's ready to pack smart with packback books? o'leary: you're walking right into my space here. let's say i'm houghton mifflin, and i'm doing curriculum books for the new york market. i already offer them in a digital format. are you saying you're just letting me lease the digital format? absolutely. so, the way our service works -- let's say daymond is a sophomore in college. he's fed up. freshman year, he spent $1,200 on new books. he realized he didn't use half of them enough for the purchase price. we allow daymond to hold off on buying anything. rent for a day at a time at $5 or less, as is a quiz or a homework assignment. so, mike, i'm going to assume that, if you're in this business, you have a deal with the largest publishers in that space. that's right. we have a deal with one of the biggest four. one of the largest.

what percentage of the books would that cover? so, it's roughly anywhere from 25% to 30%, depending on your -- on your average campus. and if it works, you'll get the other ones. right, so -- but why wouldn't one of the big guys just do this? it's their -- it's their property you're renting out anyway. yes. e-textbooks are being sold. they've been around in the marketplace for around eight years, but -- herjavec: but they're only being sold. they're being rented for a semester at approximately $100 to $150 per book. now -- but you're doing it differently -- the only difference being you're doing it by the day. we're introducing a micro-transaction into this -- you're -- you're pay-per-view. yeah, we're pay-per-use. what's a typical price for a textbook? your new book could be $150. all right. a used book could be as low as $89. so, semester's starting. in your format, how much is it gonna cost me? we rent digital books for $5 a day. what's the average amount of days that a student downloads? what we found was that -- we're in a closed beta with 330 students at one campus. they're using their books only on four main occasions. we're seeing the -- the revenue on an average student that -- that packbacks -- for our portion of the share -- $34 per semester.

tell me your cost to the publisher. so, the publishers receive 75% of revenue. ouch. shannon: so -- and this is -- that's the deal you've? 75%? gandham: this is -- so, this is a standard industry -- industry licensing agreement for all e-books. so we think we -- you know, we might be able to get up to 30% on our end. you don't -- y-you have no exclusivity with any of these publishers, right? 'cause i've worked with these guys for over a decade, okay? they don't give exclusivity. that's correct. right, so we -- we absolutely know that there's a first-mover advantage to be taken advantage of right here. the major players in this space, they're all selling used books. but the textbook industry is an $8 billion industry. $6 billion of that are used books. everyone's buying a used -- but what's that got to do with your market? because if -- if -- if an amazon or a chegg were to offer daily e-textbook rentals, they'd be directly cannibalizing their used books. they're in so much trouble because this used-book market is -- is such a disaster for their revenue. what percentage of the student population are actually renting their books versus buying them in the first place? the average student will spend about $500

a semester on used books. okay, so now he's gonna rent on a typical -- at least. the publisher didn't get a dime of that money, of those dollars. okay, but he's now gonna rent from you instead on a daily basis? correct. so, what does that come out to? in one year, he's going to spend about $280. so it's a great savings? it's an amazing savings. i don't know if it's a great saving. my son, he looks at his textbook a lot more than four times. i mean, that's four days in an entire semester? what we found in our research, it doesn't -- are you telling me my kids are only looking at their textbooks, on average, four times a semester? robert, it's not because they're not studying. it's because the professors have a wealth of resources to put out the necessary information. the book is one more resource. it's not the -- the end-all, be-all. so, mike, your entire pitch is, to the publisher, "i'm giving you revenue that you're not getting"? correct. wow. so, guys, this is the beauty about "shark tank." all the sharks have so much knowledge in different spaces. i got to this place in my life by having drive and common sense. but, tell you the truth, i didn't go to college,

and i'm dyslexic, so i can barely read. i like to invest in businesses that i have some expertise in so i can help them grow. i don't have any knowledge in this business, so i'm out. we appreciate it -- appreciate it, daymond. okay, thank you very much for your time. you know what i think? i think you're having a much harder time selling this thing than you're telling us. i admire your persistence, but i think you're gonna have a heck of a hard time, and i can't imagine all the publishers going along for the ride. perhaps i'm being negative, but i'm out. so, that kind of plays into -- i'm out. you're out? thank you very much for your time. thanks, barbara. we appreciate it. guys, i like what you're doing, okay? i-i know your -- your industry inside out. i have personally negotiated deals with all of those publishers for over a decade. i will give you one small piece of advice. it'll take you a lot longer than you think to get the deals. oh, we know. okay. we spent two years as students going through this ourselves. and -- and -- it -- well, it sends a tingle up my spine to get back into the education market, which is where i made the bulk of my net worth. sure. i can't go back there. if i walk into those offices again,

i'd rip the rest of my hair out. redbox and netflix, they -- they weren't -- and itunes -- they weren't overnight successes. it's important that you're young, 'cause by the time you finish with the educational publishers, you will be very old, okay? right. but -- and -- and i'm not saying it's not a noble pursuit. i have spent thousands of hours in their offices. you will have no hair. you will both look like me when this is over. corcoran: [ laughs ] i am out. thanks, kevin. thank you very much. guys -- um, here's what we think it takes. it takes the right context. when we find the right individuals within the organization, things click. herjavec: mike, look. i guess it comes down to -- you know, everything's a gut feel, right? everything -- everything you invest in in life is a gut feel. i just don't share your vision for this product. i'm out. okay. thanks, robert. thank you -- thank you very much for the time. who's left? mark? mm-hmm. okay. i like the concept. i mean, i'm already in tech ed -- degreed, ranku, copley systems, hourlynerd. i mean, i'm -- i'm in a bunch, so i get the space, right? but 10% isn't enough.

and i want you guys to come back to me and tell me what's the most equity i can get, how, and how much. right. um...

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check your broker with brokercheck. rratofour sharks are out. mark is interested, but he's not happy with the amount of equity being offered. cuban: okay. i like the concept. but 10% isn't enough. and i want you guys to come back to me and tell me what's the most equity i can get, how, and how much. right. um...

you can talk. talk? let's go talk about it. what if we just ask him for more? ask him for more money and offer, uh... 15% for $300,000? that's the same valuation. yeah. it'd be the same. look, if you look at it as pay-per-view for text, then the fact that it -- that it's textbooks now... corcoran: mm-hmm. ...that's just a start. in near-term, negotiating those, uh, publisher agreements is gonna take a long time. yeah, i think they can get past that because they don't have to be completely dependent, just pay-per-view. yeah. mark, we agree with what you're saying. we really value you as an investor. we want you to be very much vested into packback's growth. we would like to offer you 17.5% for $200,000.

what about $250,000 for 20%? would you do -- would you be ab-- willing to do $200,000 for the 20%? what?! yes. no. no. that's not -- [ laughter ] no, you're -- no, that's not -- no, we're thinking. we're thinking. we're thinking. no, no. sit down, sit down, sit down. i-i-i meant -- yeah. no, no, he -- he did it wrong. are you sure you want to be in a deal with these guys? let's hit the rewind button on that. yeah, so, we -- we would ac-- we'll accept your deal. we would like to accept your deal, mark. 250. i'll cut you guys a break. $250,000 for 20% equity. for 20%. there you go. yes. [ laughter ] thanks, mark. appreciate it. all right. congrats, guys. it'll be fun. all right. you guys wouldn't have been best friends anymore after that one. [ laughter ] it's all right. thank you, guys. john: congratulations. thank you, guys. thank you very much. what i actually meant to say was we were hoping to get $250,000 at the 17.5%. i may, uh... [ laughs ] i'm, uh -- i'm a sharp kid. i can do math.

but, uh, when you're in the tank, it's -- it's not that easy, right? yeah, that was a code red. where hopeful entrepreneurs get a once-in-a-lifetime chance to pitch the sharks in hopes of getting an investment to start, grow, or save their businesses. (all) ♪ "sunday night slow jams" the entrepreneurs must convince a shark to invest the full amount they're asking for, or they'll walk away with nothing. i'm here seeking $1 million for 5% of my company. not impressed. not impressed. if the sharks hear a great idea... that is so cool. they're ready to invest, using their own money. this is radioactive waste out there. it sucks. and they're willing to fight each other for a piece of the action. are you making an offer? yes. $100,000 for 30%. i want to be in this business. wait a minute. i'm gonna make you an offer.