Never in the history of Shark Tank have the investors chased entrepreneurs into the hallway of the show's set. It turns out, that's what they're willing to do when they want a bite out of an attractive startup.
"Having four Sharks running after us into the hallway is something I would have never dreamed of," says Mikael Soderlindh, co-founder of the direct-to-consumer knife-sharpening service Knife Aid.
Soderlindh and his co-founder Marc Lickfett appeared on Sunday's episode of the ABC reality show seeking $400,000 in exchange for 15 percent of their Malibu-based business. Knife Aid customers go to the company's website to note how many blades they wish to be sharpened--the minimum is four for $49--then receive a postage-paid envelope for their knives. The items are returned sharpened about a week later. The co-founders, who previously lived in Sweden before relocating to the U.S., were inspired by a similar commercial service abroad.
Both Lickfett and Soderlindh have entrepreneurial backgrounds: Lickfett previously helped create a U.K.-based retailer and supplier of art prints, called King & McGaw, while Soderlindh was a co-founder of colorful sock company Happy Socks, which the Sharks recognized. Knife Aid launched this year and, at the time of taping, had booked about $120,000 in sales--$37,000 of which was done in the month before they appeared on the show--through its website, the co-founders told the Sharks.
Guest Shark and marketing expert Rohan Oza asked the co-founders why they were on Shark Tank seeking money when they presumptively had a fair amount from their successful careers. Soderlindh failed at bringing a previous brand to the U.S. market, because he didn't know how to drive growth, and didn't want to make the same mistake with Knife Aid, he explained.
After that, the Sharks were hooked. Lori Greiner and Oza partnered to offer $400,000 for 20 percent equity in the business, while Barbara Corcoran and Kevin O'Leary teamed up on an offer of $500,000 for 20 percent. But the co-founders weren't sure who to pick.
"Who here would say, 'I really feel passionate?'" Soderlindh asked. "Because you have a lot of businesses so we need to know that the person that steps on board with us is actually going to give us one hour more than the other brand."
A shouting match ensued--the celebrity investors barked over one another in an effort to prove they were the best fit for the brand. Mark Cuban, who sat quietly, shook his head and announced he doesn't beg or grovel for a deal because he's a "fucking Shark."
The co-founders asked to take 30 seconds in the hallway--a risky move since the investors can take this opportunity to craft a more strategic offer. Instead of waiting for them to return, Greiner met them in the hallway as a display of her dedication. She was quickly followed by Oza, Corcoran, and O'Leary, who all said the same thing.
Over the bargaining and cajoling, Oza offered to increase his and Greiner's offer to $500,000 for 20 percent, reaching out a hand for Soderlindh to shake. A deal was quietly closed as the other Sharks vied for volume over one another. Meanwhile, Cuban voiced his disgust in the new tactic that had the investors pleading for a deal instead of the other way around.
"It's a new breed of Shark that grovels," he said.