Lisa D'Amato, the founder of the children's bib and food storage container Dare-U-Go, learned that the hard way on the most recent episode of the ABC program. She told the celebrity investors that she watched Shark Tank and then made one of the mistakes the Sharks hate the most: She cited market statistics to predict the growth of her company, prompting Mark Cuban to call her a liar.
"Lisa, you lied to us," Cuban shouted. "You said you watched the show and one of things we repeat over and over again is that one of the worst ways to sell in Shark Tank is to come in and talk about how big the market is."
Whether you're a die-hard Shark Tank fan or just a casual follower, you've likely seen a segment where the Sharks tear apart entrepreneurs who use market sizes to estimate their company's potential. It's the fastest way to get thrown out of the room, even if the entrepreneur has a substantial presentation, as D'Amato did.
Dare-U-Go is a dishwasher-safe bib with three compartments that parents can fill with snacks. If the child doesn't finish her food, parents can fold the bib to create a sealed storage container. D'Amato impressed the Sharks with her sales--$100,000 worth of product in the three months she's been on the market--and good margins: It costs her $2.68 to make one bib, which sells online for $24.99 (D'Amato told the Sharks she sells them for $22.99, but prices increased to $24.99 the day after the episode aired). She also charmed them with her powerful backstory of overcoming an eating disorder.
"When I was young, I had developed an eating disorder and modeling didn't help," D'Amato told the Sharks, noting that she had been a contestant on America's Next Top Model and won the All-Stars season. "I got through it all, and I'm the mom I never had, and I couldn't be more proud about it."
Cuban was moved, but after D'Amato recited global market statistics, he said he wouldn't make her an offer. D'Amato was seeking $350,000 for 10 percent of her Los Angeles-based business. Kevin O'Leary made her an offer of $100,000 cash plus $250,000 as a loan for a 15 percent stake, but he increased that amount of equity every time another Shark proposed a deal or declined to invest. When Lori Greiner and Robert Herjavec exited the bidding war, he increased the amount of equity he wanted to 30 percent.
Barbara Corcoran was the only other Shark to make her an offer. "The best thing I've heard from you is the story of you growing up because if I were to go through my top businesses, every one of them is headed by an entrepreneur that came through hell and back," she said.
Corcoran also proposed giving D'Amato $100,000 cash plus a $250,000 loan, but she originally wanted 50 percent. Once O'Leary increased the amount of equity he wanted to 30 percent, she dropped her offer to 35 percent and D'Amato agreed to partner with her.
"A lot of times when you go through tremendous struggle in your life, you feel very alone," D'Amato said after hugging Corcoran. "So when someone like Barbara connects with you, it's an amazing feeling."