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tv   The Profit  CNBC  October 13, 2015 11:00pm-12:01am EDT

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get a once-in-a-lifetime chance to pitch the sharks... my name is moziah bridges, and i am the c.e.o. of mo's bows. ...in hopes of getting an investment to start, grow, or save their businesses. who would like to experience the drink of the gods? oh! ugh! people paid for this? narrator: the entrepreneurs must convince a shark to invest the full amount they're asking for, or they'll walk away with nothing. we're on track to do $1.5 million in sales. i believe i am an n.b.t. -- the next big thing -- and -- oh, my goodness. did you just say "n.b.t. -- next big thing"? yeah. narrator: if the sharks hear a great idea... i smell a royalty deal. narrator: ...they're ready to invest using their own money. and they're willing to fight each other for a piece of the action. what are sales gonna be this year?
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$4.2 million. i'll give you $1.5 million. i'd like to split it in the middle and go $1.75 million. wait, wait, wait, wait! herjavec: wow. corcoran: wow. under what planet would that make sense to an investor? i promise you, we will do a minimum of $10 million in sales. what? oh! this is the shortest pitch in "shark tank" history. 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
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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. first into the tank is a reinvention of an ancient beverage. hello, sharks. i'm jon fotheringham. and i'm dr. eric durtschi. we're the creators of crio, and we're seeking $1 million in exchange for a 10% equity stake in our business. imagine if you could combine two of america's biggest passions -- coffee and chocolate -- into one amazing new drink and tap into the $75 billion coffee, tea, and chocolate markets. for thousands of years, the maya of central america
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prepared a chocolaty drink called xocoatl -- the drink of the gods. after years of experimenting, i reinvented this delicious drink made with 100% cocoa beans. and it's incredibly healthy. crio has zero fat, zero sugar, zero cholesterol, only 10 calories per cup, and more antioxidants than pomegranate juice or blueberries. it also contains a natural stimulant called theobromine that gives you long-lasting, gentle energy. so you can say goodbye to the spike and crash of jittery energy you get from coffee. in short, crio is cocoa the way it was meant to be. now, who would like to experience the drink of the gods? all right, sharks, you're really in for a treat. for $1 million, it better be a hell of a treat. durtschi: we've got a couple of things there. crio can be brewed at home or in coffee shops. now, you can have it plain. the one that you're going to have that's iced is called iced coconut crio. this has a little bit of cream added to it.
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oh! ugh! ugh. ugh, i don't like taste of that. not a fan, guys. i'm out. not for me. i'm out. john: yeah, it really is horrible. i'm out. okay, so this is the shortest pitch in "shark tank" history. i'm gonna let you have a chance to explain why you're worth $10 million. well, this year, we're on track to do $1.5 million in sales. we've sold over 276,000 units over the past two years. we should be in 1,000 new stores in the coming six months. we've done hundreds of demos. i would say that 9 out of the 10 people that try it in the store like it. what do you think about that? hey, look, just 'cause i don't like it doesn't mean there aren't people who do like it. o'leary: which one of my assumptions is wrong? this is a commodity. anybody can package this and sell it.
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no one's ever heard of it, so you've got a marketing job from hell. why are you asking for $1 million for 10%? how -- how -- under what scenario on what planet would that make sense to an investor? this is actually a product that we've had a lot of interest from from some very large companies. i've actually found references over 150 years old from people who have tried to do this. and they've not been able to do that for a few reasons. the roasting is something that's completely different from what's done with normal chocolate products as well as coffee products. oh, so you're telling me the process by which you make your crio bean is proprietary and unique? absolutely. and that is something we have patent pending. who are you selling it to? through what medium? fotheringham: 60% of our sales are in grocery stores. we're in 500 stores currently -- on slate to be in 1,500 stores by the end of the year. do you have reorders in this short period of time? absolutely. and i know your experience is different, but to be honest with you, a lot of times, people try it their first try, and you don't know what to expect.
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you're either thinking hot chocolate or you're thinking coffee. this is neither one of those. o'leary: why is that a good thing? you have to educate an entire generation that they should be drinking this, supposedly, because it's better for them than coffee and that the taste is, at least, equivalent. i mean, i can see people -- i think we have five opinions here, and everybody thought the taste -- no, not me. i thought the taste was fine. what you were expecting was something that tasted like coffee. no, that's not what i was expecting at all. i was looking for a coffee replacement, not knowing what to expect. it just tastes like cocoa beans mashed up, ripe, and hot water put in, and there wasn't enough cocoa put in. well, mark, they're -- they're selling $1.5 million. some people like it. so, here's the thing -- how much you making on the $1.5 million? this year, we should do $150,000. so let's just think about this. that's awesome. that's all that matters, right? you're asking me to pay 100 times your profit. well, and so, part of that is -- i mean, i have to punish you now. why in the world would you value yourself at such a number that it is impossible --
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that's what they've been trying to figure out for 150 years. [ laughter ] nobody would ever pay you that valuation. you're not worth 100 times your profit. i think you're screwed. i'm out. and then there was barbara. barbara, what are you gonna do? i think you're screwed. i'm out. [ laughter ] oh, barbara! i'm sorry. that was so-- no, because the wrong evaluation -- it's too bad you did that. okay. yeah, i apologize for us -- the initial response. i didn't expect it. all of us here tried it, except for kevin. what are you apologizing for? because we try to be very supportive entrepreneurs. you guys -- how can you be supportive of this? my god. no, somebody asks you for a crazy number, and you want to be supportive? you're encouraging america to come here and ask for stupid valuations? all i can tell you is the first 615 times i drank beer, i thought it tasted horrible, right? nothing to do with the taste. the valuation was insane. yeah, but, kevin, you're basing on the value today. they're -- oh, really? i want to pay -- and i -- and i promise you, we really wanted a deal because you guys have so much to bring to the table. why did you price it that way? but i promise you that next year, we will do a minimum of $10 million in sales. i hope you do, guys. i really, really hope you do. we hope you prove us wrong.
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o'leary: but you guys didn't finish the story. it's 150 years old. mayans were drinking it. they no longer exist. [ laughter ] thank you. thank you. good luck, you two. well, they obviously didn't get it. kevin, with all due respect, you're like a broken record. i'm right every time. it's always -- it's -- you don't look at the future. look where they were going with it. the future is the mayans. they're history. [ laughter ]
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bill's got a very tough 13lie here...... looks like we have some sort of sea monster in the water hazard here. i believe that's a "kraken", bruce. it looks like he's going to go with a nine iron. that may not be enough club... well he's definitely going to lose a stroke on this hole. if you're a golf commentator, you whisper. it's what you do. if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. this golf course is electric... a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard.
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narrator: next into the tank are entrepreneurs with a business profiting from competitive thrill-seekers. greetings, sharks. my name is brad scudder. and i'm rob dickens. we're from boston, massachusetts, our company is rugged races, and we're seeking $1 million for 10% of our company.
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so, what is rugged races? we operate a popular 5k obstacle-course race series in 20 cities across the country called rugged maniac. at our events, participants of all ages, all genders, all shapes and sizes, will complete a challenging running course featuring 25 epic obstacles. but these aren't the pop-up kiddie obstacles you'll see at our competitors' events. at rugged maniac, participants will climb over towers of shipping containers, rocket down 100-foot water slides, crawl through tunnels of mud, and even jump over fire, all while running through a combination of forest, fields, ski slopes, and even motocross tracks. in short, rugged maniac strikes the perfect balance between fun and physicality with our award-winning courses and our day-long festival. so which one of you sharks is ready to get rugged with us? and just to show you what we're all about, we've got this video clip right here. rock music plays ] wow.
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i didn't even know you existed, but i know about your competitor. you mean like tough mudder? how are you different than that? we're -- we're different in this sense. basically, tough mudder is a 12-mile course, right, with about 20 obstacles. we have 25 obstacles over three miles. so it's more about the obstacles and less about the running. and being a three-mile course, it's much more accessible to the general public than something like a 12-mile course would be. are you saying this is a tamer version of that -- something that barbara would do? oh, i could handle the 12 miles. it's this little short guy over here that wouldn't have a shot at it. uh, but we get people of all shapes and sizes at our events, truly, from 77-year-old guys to, you know, mother/daughter teams, 14-year-old and up. is it more workout or more party? we think we strike an excellent balance between the workout and the party. because it's a shorter race, it takes, you know, an average of an hour or a little bit more to finish. people are -- are exhausted, but they're still exhilarated.
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do people bring alcohol? no. no. no. or do you sell it? yes, we sell alcohol. herjavec: you sell alcohol? it's a big outdoor fest-- it's a big outdoor festival. oh, hell yeah! pump, pounds, puke, right? exactly. exactly. i mean, it's fun. it's -- it's a fun event. so, what are sales gonna be this year? this year -- $4.2 million. wow. good for you. and how many courses? 20 cities nationwide. how much out of the $4.2 million did you profit? $1 million. but next year, without investment, we're projecting $6.5 million in revenue, $2.2 million in profits. talk about the industry. there's some monsters out there. sure, sure. you know, what's the difference? so, basically, you've got -- you've got two kind of at the top -- the warrior dash 5k, tough mudder 12 mile. and why have they gotten so much bigger than you guys? first movers in the market. and how big are they, rob? how big are they? they have, like, 40 events. 45 events across the country. herjavec: but -- but in terms of revenue, take a guess. how big would they be? i think they're about $30 million. so would you guys say this industry's about $100 million a year? much larger. oh, more than that. rob, what are -- what are you gonna do with the $1 million? we've, uh -- we've taken that money and invested it in other brands that we own. um... what -- so, now, wait. wait, wait, wait, wait! what do you mean, other brands?
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dickens: wait, wait. no, no. what are we gonna do with the $1 million that we would get from you? john: yes. oh. sorry. what million were you talking about, brad? i thought you wanted to know what we did with our profits. well, we want to know that, too. oh, well, all right, great. what did you do with the $1 million in profit? dickens: let me show you exactly what we've done with that other money. john: let's see it. all right, here it is. rock music plays ] oh, you guys are doing these things? it's so stupid. corcoran: [ laughs ] herjavec: that's a great idea. rob, explain to me what i saw. you saw running with the bulls here in the u.s. okay. anybody get hurt? we had some minor injuries -- couple concussions, a broken arm. the injury rate -- [ laughter ] people paid for this? dickens: oh, yeah. about the same prices as rugged maniac -- about $50. but is that part of this deal? it can be. that's a separate -- that's a separate company. separate llc? lawyers, lawyers, lawyers. have you never seen the show?! greedy, greedy pigs. we have. we have. i give you $1 million -- i don't -- i don't get to wet my beak on the bull deal? no. of course we get the bulls! are you guys kidding? no. come on. you can't be serious.
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they're full of bull. now, i give you a chance to change your mind. dickens: okay. we would want more money for you to get involved with the bulls. why?! so, the bull run is -- is a separate entity. all right, why don't we entertain it? how much more would it be-- $2 million for 10% of the bull run. $2 million for the bull and $1 million for the rugged? yeah. so 3 million bucks gets 10% of both? yep. brad, what are the sales in the second company? $280,000 at the first event. but d-do you realize that your expertise is not rugged maniac. your expertise is in putting on adventure events. the bull run is just another variant of this same thing. that's exactly right. and so, the growth potential with this company is not just within rugged maniac. guys, what's the cash flow gonna be next year in -- under your optimistic scenario for both companies? whew! i mean, we think they can be a $20-million event this year. guys, i like the business, but if i come in and give you money and all of a sudden, it's like, "where's brad and rob?" "oh, they're chasing the bulls," right, what am i gonna say to you as an investor
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when i'm not getting your full attention? "i want a piece of the bulls." o'leary: no kidding. no, that's not what i'm gonna say. i'm gonna say, "they can die," right? i want a return on my investments, or i'm suing your ass because you have a conflict of interest. no investor says, "oh, the existing business is dying? sell me a piece of the new one." o'leary: no, you don't do that to investors. you align your interests with them 100%. when you start talking about $1 million, you don't screw around. dickens: right, right. that's a real investment. sure. herjavec: rob, the element for me -- i love the idea. i also really love the fact that you're building a customer base for the other events that you can hold later on. for me, they're together. here's an offer for you. sure. both businesses combined -- i'll give you $1.5 million for 25% of the entire thing. okay. is that the only offer that we have? mark, you said you were interested. would you --
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cuban: no, i'm very -- i love the one business. i-if i didn't know about this other business, i'd probably make an offer right now, right? sure. but i want to hear what you say to rob. i think i know, but -- i think i'm giving you a fair offer. i think the business is worth, what, six times ebitda -- 1.5 times revenue, roughly. right. and i'm pricing in. i think that's generous. i'm pricing it in because i see the upside in the other business. okay. asking for $1 million for this business was already challenging. having another agenda and another business on the other side, my gut feeling is and my instinct is that no matter what, i would be screwed working with you, i wouldn't trust you. i'm out. okay. thank you for your consideration. you know, a funny thing happened to me watching you here today. you came out here, i thought, "what good-looking guys. man, they look the part. what a great video." but then somewhere along the way, the surprise of the bulls and, "oh, yeah. we'll wrap that into the deal." and i don't think maybe you intended it that way, but for some reason, you lost my trust. but either way, i'm out. sorry to hear that, but we thank you for your consideration.
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well, guys, you have -- you have, uh, one -- we have an offer... you have an offer on the table. ...from -- yes, we -- yes, we do. what are you gonna do? and that's an offer that's...lower than what we had wanted, but -- no, let me make you an offer higher than what you want. well, no, of course. i get it. [ laughs ] anyone else want to throw an offer in the ring? i'm still listening. well, mark, your concern is that you -- you want us to focus all our energies on one. cuban: no, no. it's not that. you came in, and you tried to sell us one business, and you separated the two. you're overvaluing the other business, in my opinion. and if you have such a-a high opinion of that business, that's probably where a lot of your attention's going to be. and as an investor, i don't think it's worth the -- the value that you're assigning to it, because you've had one event for $200,000. because the -- mark, are you saying my value's too high? yes. wow. now mark's making me nervous about, "am i overpaying?"
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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! life'asking questions........ having new experiences. are you ready? the key to a happy satisfying life is to always be curious. jibo, how are you doing? i'm great! every moment is our moment. are you enjoying this? it's been such a whirlwind. i want to get to know people and understand their ideas about everything. so you can too. there's a network that never stops improving. ...that's grown faster than any other, covering nearly every american. and these geese. but it's not who you think.
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can a business have a spirit? can a business have a soul? can a business be...alive? narrator: two sharks are out. robert has made an offer, but mark's concerns may have caused a change of heart. because the -- mark, are you saying my value's too high? yes. wow. now mark's making me nervous about, "am i overpaying?" $1.5 million -- 25%. that gives you about a $6 million value for the combined businesses. the longer we wait, the -- the less comfortable i'm starting to feel. let me cloudy the waters a little bit here and maybe give you a -- well, let -- let -- tell me what -- hang on, robert. you may want to hear this. i think your offer should be for 33% -- 1/3. you because a third partner with these guys.
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and then i'd go in 50/50 with you. [ laughs ] hmm. i'm good with that. i like going up to 1/3. $1.5 million for 1/3 of the combined businesses. i'm with you, uncle kevin. yeah, i thought you might be, because i think you did overpay. [ laughs ] rob, isn't it interesting what's happened? you had an offer at here. now we're here. sure. the longer we stay here... so, what i would be willing to do... is $1.5 million, but it's for 25% of the two companies combined. okay. we're going to go discuss this, consider both offers, and come back.
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i'm not sure what there is to discuss, mark. you made a better offer than we did. yeah, mark made the same as your initial. the challenge is, when they come back, do you drop this dead weight right here and go back to your initial offer? then you're overpaying. i don't think they're gonna take either offer. oh, i think they will. o'leary: okay, gentlemen, let's summarize what's happened here. you have two distinct offers. the first, from mr. cuban, is for $1.5 million for 25% of your company. which, by the way, was the exact same offer i made, and he spent half an hour telling you how bad your business is. i know, i know. o'leary: the other offer is for the same amount of money for 33 1/3% of your business. dickens: mm-hmm. what are you going to do? we went out there and discussed it. we'd -- we'd like to eventually strike a deal with you. we wanted to come back in and say, listen, we do $2 million for -- for the 25%.
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instead of doing that, we'd like to split it in the middle and go $1.75 million. deal. deal? all right. john: i told you guys. go to work, baby. looking forward to it. looking forward to it. looking forward to it. absolutely. we'll make some money. knew you'd lose out, but, robert, why did you do that? and thank you for your considerations. thanks, guys. i'm fired up. thank you. dickens: we are very excited. we took that offer from mark because we realized that mark offers more than just money. mark offers his experience, he offers his connections. you know, only great things can come from it. well done. $1.75 million? for 25%. i'm actually surprised that they came down in the valuation. hmm. [ exhales sharply ] narrator: last season, father-and-son entrepreneurs keith and brandon marz pitched the sharks a new way of getting your daily vitamins. we came here wanting to be partners with you. together, we can make a lot of money. you got a deal, lori. greiner: great. whoo! this is gonna be great. very excited.
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narrator: let's see how marz sprays is doing now. business has been booming since we did a deal with lori. all right, guys. unbelievable start to our international success. before "shark tank," we had about $150,000 in sales. since "shark tank," in just over a year, we have over $4 million of sales. keith: and we know that $10 million is just around the corner. brandon: looks good. over the last year, we've spent a lot of time fine-tuning our product. we've changed the packaging, we've enhanced the flavor profile. these products are perfect for consumers now. that's really good. there it is. [ gasps ] brandon: lori has helped us get into two of the largest retailers in the world -- walmart and walgreens. you guys repackaged this beautifully. we are now in thousands of stores nationwide. i knew it was a hero, but to hit $4 million that fast -- unbelievable. this is just the beginning, guys.
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yes! yay! coming to "shark tank" was truly an incredible experience. it allowed us to showcase our products to the world, and it opened doors that we never would've thought could've been opened.
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big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. hold the phone.
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to help him excel at school.
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welcome to class, everyone. my name is mr. hiltbrand, and i'll be your teacher today. do you ever find yourself struggling to focus with all of today's many distractions, like mckay over here? yeah, well, welcome to the life of a college student. these distractions -- they've got no effect on jess and i. and that's because we've taken cerebral success. cerebral success is an amazing brain supplement that works to boost the four areas of brain power. it'll revitalize your focus, memory, mental agility, and overall brain health. trevor, you forgot to take your pills. you didn't even tell me what you want. so, today, i'm looking for $75,000 in exchange for 20% equity in my business. didn't forget my pills. that was coming later. corcoran: [ laughs ] so, cerebral success contains ginkgo biloba, schizandrol-a, omega 3 dha, huperzine, vinpocetine, choline, and bacopa. yeah, kevin. bacopa. but, sharks, pills?
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they're old-school. introducing cerebral success brain-boosting shots. these little shots will contain the same tested and loved formula as their older brother, while being the perfect point-of-purchase item at every campus in every bookstore nationwide. sharks, i need your help to make cerebral success a worldwide success. can you show us all a bottle? sure. so these are just prototypes, so... there's nothing in here, right? herjavec: how did you come up with it? so, i came up with it while i was a college student. i, uh -- i always kind of fo-- ruggled to focus, and, uh -- no kidding. really? [ chuckles ] yep. and so, i-i was kind of mixing my own different ingredients, different supplements, for my own purpose, and -- and so, is there any scientific proof that this works? all of my ingredients have had clinical studies done on them. no, i know, but the -- the combined product -- which means absolutely nothing. have you done any studies or any tests that the combined product works? we've had over 60,000, um...
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can't remember? can't remember? 60-- 60,000 servings, sorry. you're not doing yourself any favors, trevor. what were your sales in the pills? so, we've sold 6-- we-we've sold almost 900 bottles in the pill form. dollar-wise? 6-- about $60,000. you're selling those for 70 bucks a pop? yep. can i see that? that's -- check this out. so -- what's your cost on it? 63 cents. um, it's about -- it's about $10. we have really expensive and high-quality ingredients. all the ingredients listed there -- o'leary: trevor, if i go into gnc and i go to the sector that gives me supplements to enhance focus, mental abilities, there's plenty of offerings. why are you different? so, we're specifically designed for college students. most brain sup-- what? how's that possible? so, most brain supplements are more geared towards elderly people. like barbara. [ laughs ] let me explain. can i explain? can i explain? so, my product has these four areas, whereas most -- most brain supplements, they only target brain health. mine throws in the mental agility. trevor, how do you sell this today? you're at $60,000 in sales, which, by the way -- all online.
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all online? yep. so, how do you know it works? reviews from our customers. we've had -- that's it? so, we're averaging about three bottles per customer. customers keep buy-- coming back. so, if i buy this, how many pills do i have to take? how long before my memory improves or i get -- immediately you feel the effect and you do better on your test? so, it's -- it's designed to feel in the short term and for, like, effects in the long term. so if you take it once -- say you're cramming for a test -- it'll help you recall more information in the morning. if you take it consistently, it'll have long-term benefits for your memory, for your focus, for your mental health. look, you -- you can -- you can convince anybody of anything for a short period of time. you don't -- you don't really believe that this is gonna lead to cerebral success, do you? i-i really do believe it. i picked a collection of -- of -- of supplemental ingredients that i wanted in my product, and then i had the professionals, the manufacturers, the gmp-certified facilities help me put it together,
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make sure it's all legit, make sure they -- they don't interact with each other. but what about a kid who's studying for an exam, he's a nervous wreck, he's been drinking all night, and he takes 15, 20 of these pills? he'll have the dance of the flaming sphincter. [ laughter ] no, let me ask you, though. now, what is the downside to a substantial overdose? just like any other supplement, if -- if you're super-sensitive to caffeine -- john: so, trev, i don't want to discredit you, and i know, you know, you're a young entrepreneur, and you just want to get out there and make some money and -- and -- and work on your company, but you just don't have any credibility in the market. i'm out. okay. yeah, trevor, i, you know -- but they're all successful. this is a massive, massive market, with -- trevor, just because something's a-a massive market doesn't mean that your -- the demand's not there? no, no, no. h-h-hey, trevor, what? you're gonna stand there and you're gonna start telling me about the business just because there's a massive market? i was gonna tell you about the demand. focus used to be a struggle for me. hey, trevor, anyb-- anybody can sell anything. i'm -- i'm not a big believer in it. let me paint one -- let me paint one quick -- quick picture.
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look, i -- before i forget, i'm out. corcoran: [ chuckles ] for those of you who are still in, let me paint a picture real quick. imagine you're a college student. imagine you're going to wherever they sell convenience items on campus, and they see this product -- something that says, "boosts memory, boosts focus, boosts mental alertness, and boosts brain health." whether -- whether you think my credentials are there are not, do you think that they would buy that product or not? john: that's not what we're saying. we're saying that in our position, we just don't necessarily feel that you have the credibility to do that. i don't even think it's about his credibility. this is about ethics and integrity. yes. have you read the warning on here? yes. i mean, i've writ-- i wr-- i wrote the warning. "before taking, consult a health-care professional "prior to consumption. "or if you have any pre-existing medical conditions or any prescription medications, do not use this product." i mean, you're not -- that's on -- but that's on everything. but why am i saying that? that's just to protect myself from -- john: it's all about ethics.
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we care about ethics here. and if you really want to deal with a shark without ethics, then why don't you just talk to kevin? [ laughter ] look, i-i mean, i feel like i'm a very ethical person. i would never want to, you know, mislead anybody. look, i -- trevor, you know what i hated most about your presentation? what's that? there's good money, and then there's dirty money. i hated your example where you said a college student who didn't have enough sleep -- would they shell out money for something like this? and i'm amazed that you're making a conscious decision to go after this kind of money. there's a lot of ways to be successful in life. why take this path? because i believe in it. i mean, i've used it, and it works. and i've had customer who have used it -- hallelujah. this is america. do anything to make a buck. i'm kind of confused on why you guys are painting this as super-unethical -- o'leary: i'm trying to figure out, can i make a return in the supplemental market with your strategy? but you haven't articulated one. i'm out. thank you. cuban: look, if you had come in here and said, "i want to do a controlled test. "i so believe at this that i want to be able
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to demonstrate that this works." that's not what you came in to do. you -- you got a good marketing pitch, you got big margins, and so, you can -- you can just do it, and that's what much of the supplement business is all about. not for me. i'm out. thank you. barbara? what are your thoughts? um, i happen to have a lot of close experience with people who can't hold attention. one is my husband, bill, who's a super-high-i.q. guy and has been on adderall his entire life. he orders anything and everything and tries everything out so that he doesn't take adderall. and certain things work, and then he's functional. another experience -- my kid went to a high-pressure ivy league college, and he tells me that kids trade a-adderall faster than beer. it's the drug of choice, so there is a real need for kids to have something to help them concentrate. but here's the thing -- i'm concerned about the liability.
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if you would do a contingent deal where i have to get some kind of liability coverage -- [ groaning ] i don't need your help here, mark. so if you'd be willing to make a small contingency on that deal -- so, barbara, no matter what chemical or anything he puts in there that may kill somebody... no, i read the chemicals. ...as long as you're insured if he kills somebody, you're fine. let me tell you. anything wrongly taken can kill somebody. just insurance if somebody dies. you know what? i'm gonna take a shot at it. what is your offer? my offer is $75,000 with that contingency for 40%. oh, barbara. barbara. so, she has actually cut your valuation in half -- offered you $75,000 -- no, he's not asking for an interpreter, thank you very much. i'm very aware of the valuation. cuban: you're making me ill, barbara. i can't believe you made an offer on that. i'm absolutely willing to -- to do the -- the liability insurance. and if you'd go down to 37%, i'd be happy to take your deal. [ groans ] no. 40%. 40% -- you got a deal. let's do it. corcoran: you got it, baby. they're making you out like you're a thief in the night.
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i thank you. appreciate it. yeah. we'll do great. he's not so bad. you guys are welcome to try it. if i leave some, would you -- would you be willing to try it? no. no, they're too close-minded. all right, well, thanks, guys. appreciate it. o'leary: i did not see that coming. you know i hate that. yeah, of course you hate it. i don't care if you -- no, no. you know why i hate it? 'cause i have a lot of respect for you. and by you investing in that, you're giving credibility to it. listen, when my husband's taking supplemental nutrients, he functions better. hiltbrand: so, to the four sharks that thought that i was just selling snake oil, all i say is try my product. if you still don't feel it, then fine. but just try it before you knock it.
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or do you like more solids? my name is moziah bridges. and i'm mo's mom, tramica. and we live in memphis, tennessee. these are some nice suits. fashion! it just speaks to me, and i like to look good, and i like to feel good. mo's always been a snappy dresser. even when he was 4 and i allowed him to dress himself... looking good. ...he would choose to ride his bike in a suit and tie. you're doing a great job. bridges: my grandmother was a seamstress for a long time. she taught me how to sew, and after that, my wardrobe got a major upgrade. i love fashion so much, i decided to turn my passion into a business. it's a high-end fashion accessory that will have you smiling and styling. we could put these on our website. my fashion idol is daymond john,
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and when i grow up, i want to be just like him. i need an investment from the sharks to hire manufacturers. my strongest suit is designing, and i need a team to bounce my fresh ideas off of. if i don't get a deal from the sharks, i'll be very sad. i need to keep this dream alive, because my passion is your fashion. hello. my name is moziah bridges, and i am the c.e.o. of mo's bows handmade bow ties. and i brought with me my lovely mom-ager. hi, sharks. i'm tramica morris. and we're here today seeking $50,000 in exchange for 20% of our company. sharks, i always -- i mean, always -- like to dress nice.
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even when i was little, i would wear a suit and tie just to go play on the playground. but the problem was, i couldn't find any bow ties that i liked, so my grandma, she showed me how to sew, and then mo's bows became. now, we've actually brought y'all some amazing bow ties to have, feel, and see the quality of product we offer. bow ties are classic, but mo's bows bow ties... thank you. ...we like to call them classic swag. but by investing in mo's bows today means investing in the future, because we don't just make bow ties. mo's story has inspired people young and old to tap into their passion. yes, i give everyone the same advice -- figure out what you like doing, and find out how you can make money doing it. figure out, find out. figure out, find out. it's that simple. sharks, i knowhat, together, we can make a lot of money and make this business really, really successful by helping people look good and feel good in my bow ties. so, i only just have one question -- who's coming with me?
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[ laughs ] you're so charming. thank you. are you selling any of these bow ties, mo? yes. how many and to who? i've sold, uh, 2,000. 2,000? wow. wow. wow. did you hand-make 2,000 bow ties? yes. me and my grandma. yourself? but you're doing it all in your house right now? yeah. you're running a sweatshop. yes. [ laughter ] how old are you, mo? i'm 11 years old. wow. how long did it take you to sell the 2,000? we've been in business for two years. mo started when he was 9. this year, we've sold a total of 1,500 ties, at a total of $55,000 in selling ties. $55,000? mo. wow. corcoran: who are you selling them to? we sell online, and we have 11 different stores across the south. how do people find you, mo? they find me from different trunk shows. my mom posted it on facebook and magazines. i've been in the oprah magazine. morris: so he's gotten a lot of publicity. wow. how much does it cost you to make one, and how much do you sell it for?
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what it costs for me to make one is $6 to $10, and they range from $45 to $55. mo, why did you decide on bow ties? because i really like to dress up, and, also, my dad and my granddad, they were really dapper men. [ laughs ] and bow ties make you look good and feel good. i feel like i'm watching, standing right before me, daymond john working with his mother, making his clothes... you know, baby d.j. ...his first hats in the kitchen. herjavec: oh. what do you think, daymond? is that your new protégé? it could be. i'm you in 30 years. i wasn't doing that type of business at that age, so congratulations. what do you need the $50,000 for? we want to use the $50,000 to go home and, um, secure a manufacturer. do you anticipate a large amount of orders, or are you saying that you already have orders and you want to take the money to utilize it for that? absolutely, both. we, uh, currently have 11 stores. we have about five more stores that are waiting. any big-box players? any large fashion players interested? right now, he's reached out to macy's and dillard's
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and some of the big-box players, but right now it's in specialty boutiques throughout the south. i'm gonna make the assumption that you're trying to build a brand -- mo's bows. i get it... mm-hmm. ...because these are expensive. this is not a cheap bow tie. cuban: mo, you're teaching kevin a very valuable lesson in pricing elasticity. do you know what pricing elasticity is? no. what that means is, when you have more demand than you can supply, what do you do? you raise your prices. when you go to manufacturing, do you not lose a certain amount of cache around it? because today, it's handcrafted mo's bows. mm-hmm. mm-hmm. mm-hmm. if you have it manufactured, is it still handcrafted? i believe so. well, the -- the company that we're working with in memphis, it's a lady that used to own a sewing factory. they're sewing, they're cutting, so... i see. and how many can they make a day? at least 500 a week. what will your grandmother say, mo, when you fire her? will she be upset? well, my grandma, she's just funny. she's just, "oh, okay." corcoran: [ laughs ]
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yeah, she's -- she's -- at 80 years old, she's fine... chill. everything. ...with pretty much whatever we -- you're making an 80-year-old woman work 10 hours a day? [ laughter ] well, she loves me. she loves the feel of my cheeks the most. john: mo, mo, are you gonna -- are you planning on expanding the line to other haberdasheries and -- and other things? yes, i'm planning to have my own clothing line by the time i'm 20. 20? okay, good. nine years. why do you believe that you need an investor instead of growing the business steadily on your own and making all the profit for yourself? because i believe i am an n.b.t. -- the next big thing -- and because i've been in -- oh, my goodness. did you just say "n.b.t. -- next big thing"? yes. [ laughter ] morris: and we feel like, with your funding and with your connections, we can grow faster, we can really get the brand out there. and we want to take the world of male accessories and kind of turn it upside down. we want cool socks. we want fun bow ties, fun neckties. guys, i'll get it started. um, i -- mo, you are the next big thing. thank you. i'm excited for you, but as advanced as my fashion sense is,
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i don't know if i'm the guy to help you. i'm out. okay. thank you. mo, i-i appreciate you coming out here today. thank you. but, uh, i don't think i'm the right partner for you. there might be somebody else on this panel who might be a better fit. and for that reason, i'm out. okay. thank you. barbara, kevin, daymond? i'll tell you what i'm smelling right here. [ sniffs ] herjavec: what? i smell a royalty deal.
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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!
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or building the best houses in town.
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o'leary: i'll tell you what i'm smelling right here. [ sniffs ] herjavec: what? i smell a royalty deal... [ laughs ] oh, my god. ...'cause your margins are so high, they're incredible. you could afford to pay me $3 a tie if i give you the $50,000. don't do it, mo. there's your first offer. i'll give you the $50,000. i don't want any equity in mo's bows. i want $3 every time you sell a tie. corcoran: here's my take on it. um, it's a family business... herjavec: hmm. that's true. ...and you're doing very well. mm-hmm. so it's not like you're standing alone. you're surrounded by people that love you, support you, and they're working for you. morris: okay. and you're hardly grown-up. [ chuckles ] i honestly don't think you need anybody's help. i think you're on to something here. your margins are great. you're selling them. if you could keep the publicity going... mm-hmm. ...i think that is amazing, and you being who you are, why wouldn't everybody write about you? yeah. right? absolutely. for those reasons, i'm out. john: so, in 1989, i was offered $10,000 for 40% of my company,
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and my company was only a couple of hats i made, right? 10 years later, that would've been worth, to somebody else, $40 million. i'm glad i didn't take that money. i strongly suggest that you don't take on investors at this time. so i will guarantee to mentor you, but i will not give you the money at this time. and i think the mentoring is way more valuable than the money. absolutely. so, in regards to the deal, i'm out. okay. in regards to mentoring, i'm in. perfect. and don't do this deal. [ chuckles ] o'leary: you know, here's the thing, mo. i believed in you from the beginning. and the way i'm showing my belief is i'm writing a check. everybody else -- talk. you also will have mr. wonderful as a mentor instead of myself. no, no, you can also mentor. wow. i wouldn't be able to do that because you -- it will show that you're not listening to me. i want to take you down the path that i want. wow! listen to that. wow. good move, daymond. he's telling you not to take my money. so once you do 10,000 ties, think about sending this guy $30,000
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every time you do your ties... and you would've made on that -- ...forever. it's a very -- it's a very, very difficult decision. what are you going to do? well, we appreciate all of your comments and all of your feedback. um, mr. wonderful, kevin, we appreciate your offer, but we're going to have to decline. yes. yes. herjavec: yay! daymond, we would love to -- to work with you as a mentor... absolutely. ...and take mo to -- to the next level of where -- of where he could go. do you agree with that, mo? mm-hmm. mo, you're thinking about it, and mom doesn't like it. i'm checking with the c.e.o. mo is the c.e.o., but i'm the c.e.o. of mo, so... john: there you go. cuban: good luck, guys. thank you guys so much. we really appreciate the offer. thank you. all right, and i'll be speaking to you. all right, perfect. bridges: i walked out with daymond john as my mentor. ba-zam! i'm on my way. and you know what i like about him? he said he's gonna do clothing by the age of 20. nine years. he's not thinking tomorrow, tomorrow. he's gonna develop his business.
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i think you did him a huge disservice. i think you're an animal. no, listen. i think that would've worked beautifully. (man) this is the shark tank, where hopeful entrepreneurs come seeking an investment from the sharks, five powerful, self-made investors worth billions. in the tank, the sharks are ready to invest using their own money, but only for the right person with the right business. barbara, i got something special for you, baby girl. i'd like to hear more about it. and if the sharks hear a good idea, they'll fight each other for a piece of it. you want to go 50-50 and get rid of daymond? i'll go in with you. yes or no? because it is about to be retracted. but first the entrepreneurs must convince a shark to invest the full amount they're asking for or they'll walk away with nothing. the star power that i have-- you have no star power. you're awful. who are the sharks?

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