Pop CultureBy Ty Schalter on

The Shiver: Tonight’s group of sharks: Dallas Mavericks owner and tech-sector maverick Mark Cuban in his usual stage-right chair, haberdashery emperor Daymond John, venture capital mogul Kevin “Mister Wonderful” O’Leary, QVC Queen Lori Greiner and at the end of the line, infosec entrepreneur Robert Herjavec.

The Bait: Subscription puppy toys, workout denim, algae power, and fishing jewelry

Company: Ben and Ariel Zvaifler, “PupBox”

Seeking: $250,000 for a 10 percent stake

These people referred to their dog as their “daughter” and their “furbaby” about 17 times in the first 30 seconds of their pitch.

No.

I have a dog. I love my dog very much. It is a dog. It is not a human child.

I have actual daughters. These people have a dog.

Anyway, suddenly all the Sharks have dogs too, because OMG PUPPIES!

PupBox is a subscription combination of housetraining equipment and training; they’ve done about $800,000 in sales so far. He comes from content marketing, she comes from the pet industry. They’re growing 10 percent month over month, they project $2.5 million in sales next year. They’ll be profitable by the end of this year, even at the $800,000 figure. Impressive!

“I must say, your strategy of putting puppies on Sharks’ laps has really taken the teeth out of them,” Mister Wonderful notes, but that $2.5 million valuation is awfully steep. Before Ben can defend the number, Cuban jumps in just to jump out—he says doesn’t like subscription services.

Mister Wonderful, now un-interrupted, makes an offer: $250,000 for 25 percent. Daymond is already in the industry, and has relationships with Petco and PetSmart. He offers $250,000 for 30 percent—even more equity than Kevin. Robert jumps in with a third offer: $250,000 for only 15 percent. The happy couple are much happier about Robert’s offer, but he wants a yes/no NOW—and we want our first DRAMATIC COMMERCIAL BREAK.

When we come back, they want to hear if Lori’s in — and they’d love to get a couple of Sharks involved, if they feel so inclined. Daymond says none of the other Sharks provide any value; he’s standing firm. We then get about three minutes of all-but-indecipherable crosstalk, which ends in Robert standing up with a puppy under each arm. Apparently that does it?

Swim or chum? “Robert, you’ve got a deal.” SWIM. Frankly, these two didn’t seem like they needed a ton of help — so if they weren’t going to go with Daymond’s offer, they just needed to take the best deal.

Should you buy? I’d want to know more about what’s actually involved in the training and such; they didn’t get much into the guts of how it works. But housetraining a puppy is no joke; if you’re trying to do that right now you SHOULD BUY.

Company: Hunter Molsen & Alex Hansen, “Barbell Athletic Wear”

Seeking: $500,000 for a 5 percent stake

These two guys had an amazing idea: clothes you can work out in, as well as wear casually!!!!!1

If you’ll forgive the sarcasm, these two have actually found an unexplored niche in the HEAVILY mined athleisure space: This is workout denim, cut to accommodate beefy glutes and thighs:

Do the Sharks have any questions? Yeah, Mister Wonderful has one.

“Can we answer the question about why you’re worth 10 million dollars?” Woof. The tension in the room is palpable; he Went There right off the bat.

Fortunately, Molsen and Hansen can boast $2.3 million in sales this year. That’s impressive, but a 5x revenue valuation is still really high. Cuban says it’s not the multiple that matters, but the growth — and that’s impressive, too. They’re averaging 100 percent year-over-year growth rate with online sales, following a successful Kickstarter. It hit their goal in just 40 minutes, which is wild, and ultimately cleared over $700,000.

But for everything they’ve done right, the bonkers valuation is killing them.

“You guys are asking me to roll the dice,” Robert says, “and it’s too big a risk.” Mister Wonderful thinks the best valuation they could get in the private VC market would be five million, half their number.

One by one, the Sharks admire their hustle, success, growth and profitability — but hate the valuation, inventory requirements and inability to protect their IP in the hypercompetitive apparel space.

Swim or chum? “It was frustrating to hear the Sharks say they want to invest, but got hung up on the money,” Alex says. Uh, yeah, actually dude, the thing with the money is actually the only reason why they’re here. CHUM.

Should you buy? If you’re rocked up like these guys and absolutely have to pump iron in chinos, you have no other choice: You SHOULD BUY. Otherwise? I’m not sure The Manliest Jeggings are for you (or me).

Company: Catharine Arnston, “EnergyBits”

Seeking: $500,000 for a five percent stake

“EnergyBits are tiny algae tablets,” Arnston explains, and they boost mental something and increase your athletic performance make you live longer and cure cancer and you know it works because it’s huge in Japan, or something.

Sigh.

Cuban tries to press Arnston on the scientific specifics, but it’s clear she can’t be specific enough to please him. Regardless, EnergyBits sales have doubled almost every year for six years. Then again, those sales only total $1.1 million, with $300,000 coming in the last year. She’s ploughed it all back into the business — in the meantime having her house foreclosed on, car repo’d, lights turned off five times, etc.

The driver for all this dedication: her sister had cancer. In the search for a diet-based solution, she stumbled upon a supplement that’s wildly popular in the Far East, but hasn’t caught on in places with science-based medicine: just eating a whole bunch of algae.

The Sharks all pop a tab or two and start chewing, at which point Arnston notes too late that they’re meant to be swallowed, not chewed. Oops.

Arnston thinks her packaging and branding will let her corner the currently nonexistent American algae market — which is why she’s valuing her company at $10 million, a jaw-dropping 33x multiple of her current annual revenue.

“If I go to a horror movie and I see a black person in it,” Daymond says, “I know what’s gonna happen.” If she’s seen the show, he warns, she knows what they’re about to do to her.

Cuban can’t deal with her “more than minimal” disconnect with reality; he’s out. Lori points out that branding the “SkinnyBits” product implies weight loss, which of course is a very serious claim you can get sued for not being able to back up. Arnston says it’s “just a name,” then admits she has no insurance to defend against such lawsuits.

“With all due respect,” Robert says, “I don’t think you’re a businessperson. I think you’re a preacher in the church of algae, and I don’t want to pray there.”

Swim or chum? “I don’t need to convince anybody,” Arnston says. “If they can’t see it, that’s too bad for them.” CHUM.

Should you buy? You’re supposed to swallow 30 little algae tablets for ONE serving of placebo effect, at a per-bag cost of $4. SHOULD NOT BUY.

Company: Vance Zahorski, “Line Cutterz”

Seeking: $120,000 for a 20 percent stake

This guy is so all-in on fishing, and his invention, that he and his wife sold their home and moved in with his parents (and their two kids!) so he could tour the country selling his slick fishing line-cutting ring:

It cuts all the way up to braided 100-pound test line, and doesn’t cut skin. He’s also got an upcoming “Thread Cutterz” line of rings that uses the same design to cut sewing thread, yarn and embroidery floss.

They cost $1.68, wholesale for $7, and retail for $12.99. That’s an impressive profit margin of 70 percent — but it was a little too impressive for Walmart, with whom he’s already had talks. They want it in their stores, but at $4.99. Why wouldn’t he cut his margin?

Zahorski explains that he’s hammered out deals with well over a hundred fishing shops at the higher price. If he gives it over to Walmart dirt-cheap, he’s screwing over everyone who took a chance on him.

“Good for you,” Cuban says, appreciating Zahorski’s sense of loyalty and fair play. The other Sharks aren’t quite so altruistic.

Mister Wonderful recounts a time he negotiated with a Walmart buyer, back in his software days. At the time, the going rate for software was $39.99, and PCs around $1,200. The Walmart buyer said he wanted to sell O’Leary’s software for $19.99, because they were about to cut PC prices to under $1,000 for the first time and expected a huge boost.

“‘You have 19 minutes to decide,'” O’Leary recalls, “‘and your competitor is waiting outside.’ What did you think I did?” He took it — and made a billion dollars. O’Leary cautions Zahorski to rethink that.

Robert has a few issues with Zahorski’s pitch, but has one overriding issue.

“I can’t do a deal with you,” he says, “because you thought I was Polish and not Croatian.” Oops. Mark is not an angler, and he’s out — but Daymond, who is, wants to know where the $120,000 is going to go. The answer is a mix of marketing, inventory and just sort of backfilling all the miscellaneous expenses he’s floated until this point.

Daymond offers the $120,000, but for 40 percent — twice the asking stake. Zahorski tests the waters, to see if any other Sharks will bite. Mister Wonderful starts lecturing Zahorski about his decision to pass on Walmart, and Daymond wonders when Vance will get serious about a serious fisherman offering him that much money.

Time for a DRAMATIC COMMERCIAL BREAK.

“I think it’s genius,” Lori says. “I really like it, and I really like you.” But she agrees with O’Leary: he’s missed the boat by not working with Walmart, and his price point is high enough that there’s a massive risk of undercutters taking his legs out from under him. She’s out.

It’s down to Daymond or nothing, and Daymond isn’t playing now:

He gives Vance 15 seconds, during which Vance hopelessly counter-offers with slightly bigger equity stakes: 25 percent, 28 percent, 30 percent. “I just can’t do it,” he wails. Cuban encourages Zahorski: “Go up to a third. Just try it.” He tries it. Daymond stops counting and starts thinking.

Swim or chum? Zahorski has a deal! $120,000 for 33 percent with the only Shark who really loves fishing. SWIM.

Should you buy? This is a really cool widget. If you fish, or dabble in the fiber arts, you definitely SHOULD BUY.

About Ty Schalter

Ty Schalter is thrilled to be part of The Comeback. A member of the Pro Football Writers of America, Ty also works as an NFL columnist for Bleacher Report and VICE Sports, and regular host for Sirius XM’s Bleacher Report Radio. In another life, he was an IT cubicle drone with a pretentious Detroit Lions blog.

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