The Players Trunk on Shark Tank
Was cool to see The Players Trunk getting some exposure on Shark Tank on ABC. Charles Matthews was in the pitch as well, though he didn’t say much and seemed to be there more for credibility as an athlete that has used this and as part owner of the company.
They didn’t get a deal, and really kinda looked in over their heads with everything surrounding their business and just how NIL is going now, so it was neat to get a different look from an investors perspective.
link 3rd segment, starts at 14:27
They didn’t get a deal
I mean they had offers from Kevin Hart and Mark Cuban, but turned them down because they valued their company in the 8 figures. Ballsy and probably bad decision given their connections in sports
That’s true, and I guess that’s a bit where the way they were negotiating and talking I felt they were a bit in over their head with regards to their business.
I will also say it would be tough for me to give up that percentage of my business that I had built up… but I would also end up looking like them up there too.
I think with so many co-partners it is tough to give up that big of a percentage. That pie keeps getting divided more and more
70% of a watermelon is better than 95% of a grape. Mark Cuban pulled out the line I've heard him use many times. Hope that they can keep their business going with the venture capital that they raised. Someone like Cuban could have really helped.
I watch shark tank quite a bit, but let's not forget these sharks often make ridiculous offers. Some people are desperate Nd take them, others do not. Many entrepreneurs have declined offers from the sharks and gone on to have success.
While Cuban and others are well connected, they are in this for money and not charity. Their help often comes with a premium cost.
I think the set up of Shark Tank is reasonable for all parties. The entrepreneurs get a ton of exposure, even if they don't end up receiving a good offer. The sharks have to compete against each other in a very open format and while they do get to promote themselves on TV, they are all successful enough that they probably receive 100s of unsolicited pitches a year. I don't think they are accessing many partnerships through the show that they couldn't otherwise get.
Not only did they value the company in the 8 figures, according to them, they convinced a venture capitalist to value it at $10M. The sharks were valuing it at around $2M. When the valuations are that far apart, you’ve got to walk away. They got some exposure and didn’t give up 1/3 of their company.
I think some people go on the show really looking to make a deal while others really just want the exposure.
The latter is the smart way to use an appearance the show. For anyone with a real business, the terms offered are always expensive.
Link in the the 3rd segment, starts at 42-27?
that’s what I saw at first glance.
You're not the only one
Just an FYI, Shark Tank takes a 5% stake in your company just for letting you make the pitch. They didn't get a deal, but they did give up 5% of their company for the exposure to other investors who watched them pitch it on this highly watched television show. It is common for people who turned down the sharks to strike outside deals -- if the product is a good one.
This is no longer the case. When the show started this was how it worked but Mark Cuban ended the practice not long after he joined the show. Shark Tank contestants are no longer required to give up equity in their companies.
This is true, and good.
Looking at the products the company offers, the minimal overhead involved in running a "marketplace" for used garments, the revenues/margins growth potential (or lack thereof), I would have valued the company @ the same levels and then taken a hard pass on the investment: there is zero barrier to entry for this type of reseller.
Just my opionion relating to my and my partners' interests, but yeah, it would be a "nope", followed by, "can I buy you guys a dinner for taking the time to pitch me?".
I love these guys, and I certainly am happy to see them make a few bucks off of their old athletic gear. But I don't see this as an inspired or lucrative concept; am I missing something?
Yea I didn’t quite get what they were selling. Players old gear?
They all looked a little nervous in their presentations.
A few thoughts:
I like SharkTank and the investors can be fair, helpful, but also aggressive. Maybe that's made for TV. The producers can cut and slice the videos together to make things more compelling, but I also feel that they probably stack 20 pitches in a row each day for a week to film a season. I bet they have to keep things moving. I don't like the high pressure nature of the situations. The Sharks have so much more knowledge and sometimes they pressure the contestants to take bad deals. Often times the contestants are young, inexperienced or both.
In this instance, the Sharks may have been fair to the Players Trunk, but it is clear they were miles apart on valuation and that's fine. What the Sharks essentially wanted was 20% for their own NIL. And Lori said it best, if the Sharks wanted to help they would have said how their exposure would help. Would Mark go to the NBA and help get them involved - of course not because the teams already resell their own gear. Did he offer to call up IU basketball and get them onboard? Nope.
The Sharks didn't explain (or the producers cut out) how they would actually help. With that in mind the Players Trunk made the right call. Now they can use the Shark Tank logo and clips on their site for a year.
Things were definitely cut down ( and always are) by the producers but the guys didn't want to give up equity and really don't have any wide ranging exclusivity and NIL rules are still being "refined and tested ". Why can't someone from the rabid parts of ACC or SEC do the same thing? I think their valuation was too high as well. Maybe they just wanted the publicity appearance?
Cuban and Hart could have definitely helped their exposure and credibility big time and may have been worth more than 7.5 % ( their counter offer).