THE DEALS THAT WERE OFFERED
Kevin O’Leary likes this as part of his “platform of love”. Why? Because as he says – when someone is born, married or dies, they are completely price insensitive. Ugh. He’s right but does he have to be so blunt about it?
Kevin’s offer: $150K for 15% equity (this is 50% more equity than the owners originally offered) and a royalty of 10%. Kevin’s got his eye on that gross margin, baby.
Damond John always talks about how “he’s going to have to work hard on this one to get licensing deals” and he coffers $150K for 30% of the company with a 10% royalty fee. He raised O’Leary double the equity.
O’Leary, not to be outdone, lowers his equity to 10% with the 10% royalty.
HOW ROYALTIES WORK
Understand, a royalty comes off the top line; that’s a percent of revenues. As soon as the Two Guys’ Bow Tie ring the cash register, anyone getting a royalty gets paid before the company does. Royalties can be VERY profitable. Just ask high profile rock bands.
Damond John counter offers; $150K, 20% equity, 10% royalty.
FOUNDERS COUNTER OFFER
One more volley from the founders:
They countered Damond with $150K, 17.5% equity and 10% royalty on sales.
THE ABC SHARK TANK INVESTOR WHO WON THE DEAL
Damond bit the shark bait. How impressive these guys were that they didn’t freak out or flinch when the offers got complicated?
Keep your eye on Two Guys’ Bow Ties. Without any doubt, for sure, they’ll be a multi-million dollar business in short order. We give Mr. Wonderful our condolences.
Stay in touch by signing up on the right for my 20 minute cheat sheet and my weekly “Dawn’s One Thing” – one tip that will help you grow profits and cash. It’s free. No spam. Just do it!