When faced with competing offers from multiple investors, pick the one that best suits your vision for growth. That's the takeaway from the latest episode of Shark Tank, where Lori Greiner and Kevin O'Leary vied to make a deal with a young entrepreneur.
Bryan Perla was pitching Little Elf, a gift wrap cutter, on Sunday's episode of the ABC reality show. He was seeking $150,000 for 15 percent equity in the West Boylston, Massachusetts-based business, which sells its products on Amazon and through the company's website.
Perla launched the product in 2018 as a senior in high school and continues to run the company while he pursues his bachelor's degree in product design at Stanford University. Little Elf is a tubular device that cuts wrapping paper in one smooth motion, eliminating the need for scissors. While Perla always had a knack for inventing, he struggled with certain subjects in elementary school because of a severe form of dyslexia, he told the Sharks. Both O'Leary and Barbara Corcoran, who've openly discussed their dyslexia, applauded his achievements.
Little Elf's lifetime sales were $250,000 at the time of taping, said Perla, who sells one Little Elf for $7.49 on his website, but also has packages of up to 10 cutters for $59.99. Perla was seeking a Shark who could help him with advertising--he hasn't spent a cent on advertising yet, he added.
Greiner and O'Leary each made offers, but neither excited Perla. As the pair undercut each other's royalty deal proposals--dropping as low as 35 cents per item sold--Mark Cuban asked Perla what he envisioned in an investing partner. Perla liked the idea of appearing on QVC with Greiner and preferred an equity deal instead of one that included royalty payments. This gave Greiner and O'Leary the ammo they needed: Greiner offered Perla $150,000 for 20 percent equity while O'Leary suggested the same investment in exchange for 25 percent equity. The other Sharks were out.
"Kevin, we're dyslexic. We have that bond," Perla said on the show, "but Lori is the best option for this." Perla closed his deal with Greiner, who he later noted was the best Shark for his company.