Every shark offered some sort of deal for The Woobles. But it ended up being The Woobles co-founders — not the seasoned investors — who were the real sharks on a recent episode of ABC's "Shark Tank."
Justine Tiu and Adrian Zhang, the couple behind the popular crochet training kits sold on Amazon (NASDAQ: AMZN), asked for a partnership between investors Mark Cuban and Lori Greiner. And they got it — at the expense of the other sharks.
“You guys are as sharky as we are,” Cuban told them during the episode, which aired Sept. 30.
Tiu and Zhang had asked for $250,000 in exchange for 5% of their startup — but left the tank with a deal of $450,000 for 6% from Cuban and Greiner.
In the end, sharks took the bait
Tiu and Zhang told the Triangle Business Journal it was a tense situation. They thought they had prepared for every scenario ahead of filming the episode. But trying to convince sharks to back down from throwing money at them?
“Not prepared for that,” Zhang said.
Zhang and Tiu’s priority in getting a shark wasn’t just about the investment. They were looking for someone who could get them into wholesale. They wanted to close deals to sell their crochet kits in major retailers. And they wanted to work on the technology side of the product.
In describing their goals, Zhang said they thought Cuban and Greiner would naturally gravitate toward a partnership investment. But that’s not what happened, and Zhang took a big risk — asking them whether they’d like to invest.
In the end, the sharks bit. And while the deal has not officially closed — due diligence began when the cameras stopped rolling — product orders have been climbing since the episode aired. The following day, the couple was at their warehouse, working to respond to the wave of interest.
It’s been an exciting experience for the company, which started with $200 worth of yarn two years ago and is now on track to make $7 million this year. Zhang and Tiu had family over to watch the show, but the power went out amid, forcing the couple to relocate the party. Then ABC 11 cut in with hurricane coverage. Tiu said they ended up watching the show via Facetime as a cousin held an iPhone up to a television in New York.
What happened on the show
Almost immediately, the sharks started circling.
The bids started with Kevin O’Leary, who, after praising the firm’s cash flow, said he would do $250,000 at 10%. He claimed to be uniquely qualified to help The Woobles reduce customer acquisition cost, secure licensing deals and come up with “some other interesting ideas in the fashion world.”
Barbara Corcoran offered $300,000 for the same 10% stake. Greiner immediately countered with the same terms, and the bidding began in earnest.
“I understand all of this,” Greiner said of The Woobles. “I know how to get all the things you talked about from the licensing to the retail stores … you are something that could really take off.”
Corcoran tossed in another bid immediately, $350,000 for 10%.
“$300,000 for 8%,” Greiner countered. “This mentoring is going to be worth it.”
“Just hold it a second,” Corcoran said, countering with $350,000 for 5%. “That’s how much I believe in your business. You are sitting on a rocket.”
Zhang asked if she would consider bringing in another shark.
“I’ll do it with Mark,” Corcoran said.
“I was $300,000 for eight,” Greiner said. “You don’t need — I can do this all alone.”
Cuban said he would team up with Corcoran, at $350,000 for 6%.
“Well, I’m trying to get a word in here… it’s hard,” said Robert Herjavac. “I’m just saying, how could I get a piece of this. … I’d love to be involved.”
Greiner gave him an opportunity, offering up a partnership with Herjavec — $450,000 for 6%.
“That’s a nasty move,” Corcoran said.
That’s when Tiu and Zhang made a move of their own, one that would leave Corcoran fuming at the end of the episode.
“So each shark offers a lot of different value in different areas and where we think in the short term that we can get the most help is with Mark and Lori,” Zhang said.
“I feel offended,” Corcoran said. But Cuban didn’t give her time to recover with another offer.
"You guys got a deal," he said.
