Mark Cuban didn’t want to invest in Genius Ritter until he changed his mind after becoming angry over a bidding war between his Shark Tank co-stars.
The Austin, Texas-based company sells color-changing cat litter that can alert pet owners of potential illnesses. Founded in 2020, Genius Ritter is already profitable, CEO and founder Ramon Van Meer said on Friday’s episode of the ABC show, with year-to-date sales of $3.1 million at the time of filming. , said year-to-date profits were $456,000.
“We test the urine. If the pH of the urine is high or low, we can tell if there is a possible health problem,” Van Meer said. “For example, if it turns red, it could mean a problem with your kidneys. If it turns blue or green, it could mean a urinary tract infection.”
Van Meer has a track record as an entrepreneur, having sold his first company, Soap Opera Blog, for $9 million in 2018. This allowed him to put $1 million of his own cash, plus another $1 million he had already raised from other investors, into Genius Litter’s launch.
He told the show’s investor judges that he wanted them to help him do the same thing with his new company, asking for $250,000 in exchange for a 4% stake in Genius Ritter.
“We want to build this business, expand it, and then sell it.” [strategically]”We are launching two new products,” Van Meer said. [including] Topper showing health status [that you can sprinkle] Place a healthy dog pee pad on top of the existing cat litter. ”
“It’s a great idea,” said investor Robert Herbajec. “You’re such an amazing person,” guest investor Emma Greed added. “You are wonderful.”
The bidding war begins
Genius Litter isn’t the only pH-sensing cat litter on the market. Mr. van Meer touted his product as having “smaller particles, better odor control, and less dust” than competitors. But that didn’t stop Herjavec, Lori Greiner and Kevin. O’Leary didn’t make an offer right away.
“Lori and I have been talking about this…Here’s the deal: We’d like to get 10% of the company for $250,000, but we’ll give you $2 in royalties until we get $1 million back,” O’Leary said. he said.
Van Meer was not interested. “I do not think so [royalty deals] is in the best interest of the company. If you believe me, stocks are all you need. he asked.
Mr. Cuban and Mr. Herjavec applauded his resistance and offered Mr. O’Leary and Mr. Greiner another offer of $250,000 for 20%. Mr. Herjavec made his own offer of $250,000 for 10%.
“What about three sharks?” Mr. Van Meer asked, retorting that the three investors would split 10% equally.
cuban scoop
Initially, Mr. Cuban and Mr. Grede each turned down the offer, citing their lack of experience in the industry and their interest in cat litter. But as other investors argued with Mr. Van Meer about the advisor’s stocks and shares, Mr. Cuban expressed frustration at the altercation.
“Ramon, you’ve been asking for 4%…I’m tired of it. I’ll give you $250,000 for 8%. But you have to say yes now,” he said.
“There’s no way he can come in and scoop it up,” Greiner countered.
Cuban, whose interactive streaming app Fireside he co-founded last year, said he has long used silence and the element of surprise as key negotiating tactics.
”[Silence] give you an opportunity to learn. Sometimes someone comes on “Shark Tank” and you think, “There’s no way I’d be interested.” “Or, if I do, I just don’t have the data I need to make a decision,” he said, “and if you listen to other Sharks, they think I have no competition financially. They’ll tell you if they’re there to make a deal. They can probably tell me a lot about the industry, about the person. ”
Not willing to give up without a fight, Mr. Greiner proposed another joint proposal to Mr. O’Leary and Mr. Herjavec. It was worth $250,000 with 8% stock and 2% advisory stock.
However, O’Leary did not want to participate in it. “Ramon, I love you, but I’m going to pass. It’s not enough,” he said, making room for the Cuban to take his place.
In the end, Van Meer chose to accept the offer from the trio of Greiner, Herjavec and Cuban, even though it meant giving up an additional 2% advisory stake.
“They all have different types of expertise and networks that I think will be great,” Van Meer said. “I can’t wait to work with them.”
Disclosure: CNBC owns exclusive off-network cable rights to “Shark Tank,” on which Mark Cuban appears as a panelist.
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