Entrepreneurship

Why This Entrepreneur Walked Away From A Deal On ‘Shark Tank’

By October 31, 2018 No Comments

JOHN PINTO, CHELSEA PINTO (BOOM.BOOM)ABC

</div> </div> <p class="p1"><span class="s1">Last week we spoke to the Young family about their emotional story and the experience of taking a deal with all the sharks on the panel. This week as part of a larger look at the show experience, we spoke with John Pinto the CEO of boom.boom, the essential oils-based nasal inhaler who came into the tank asking for $300k for 10% of their business. Over the course of their pitch, the sharks seemed intrigued by the product and the margins but had questions about their plan to take to retail and gain repeat customers. When hope looked lost, Robert Herjavec swooped in with an offer to give them the $300k for 36% of the company. John, who himself owns only 36% of the company he helms, was unwilling to give up that amount of equity and countered unsuccessfully with 15% for the money, and then 20%. Robert refused to accept that little equity for the money and John and his wife Chelsea made the difficult choice to walk away from the offer they came on the show to get. I spoke with him about how he prepared for the show and ultimately how you walk away from a deal with a shark on national television.</span></p> <p class="p1"><span class="s1"><b>Forbes: So why’d you guys go on Shark Tank?</b></span></p> <p class="p1"><span class="s1">John Pinto: So my wife and I, Chelsea, she came on the show with me, she did product development and some of the marketing side of the business, but we’ve seen every episode of Shark Tank together and so we always watched it, we always thought boom boom would be a great product for the show. It’s one of those things where you hear the whole story and you see people try it, it definitely piques interest. We just felt like it was the next best step, we were at a place where we were seeing decent growth year over year and we really wanted to get that next level of exposure and we really wanted to get a deal! I mean that’s the point right! We wanted to get investors, and to get a deal and be able to take it to the next level!</span></p> <p class="p1"><span class="s1"><b>F: Did you guys have a particular shark in mind that you wanted to work with?</b></span></p> <p class="p1"><span class="s1">JP: So we right now are an e-commerce business. 90% of our business is online, and we feel that the product can really fit well in the retail space, kind of at the point of purchase, and so we went in feeling like Lori would be the best for the business.</span></p> <p> </p> <p class="p1"><span class="s1"><b>F: How did you guys prepare to go on?</b></span></p> <p class="p1"><span class="s1">JP: Well we practiced the pitch more times than I can count so that was step number one. Step number two for us was mapping out all the questions, a long long list of questions that we thought they would ask and write out our answers and be prepared to talk about all the things and just going in there with confidence in what we’re doing and believing in what we’re doing. We know we’re on the right track and it was about being able to portray that through our pitch and our answers.</span></p> <p class="p1"><span class="s1"><b>F: As a fan of the show how did it feel to be there?</b></span></p> <p class="p1"><span class="s1">JP: Well first we were just so grateful to be there. Chelsea and I were like wow this is a really amazing opportunity. We know so many people apply and don’t make it to that final point of being able to pitch the sharks so that was kind of the biggest thing. The day of, it’s very, the whole process is very dialed in. It’s the 10th season, they clearly know what they’re doing, they do it really well, it was very organized and very timed out in a nice way. Walking into the tank was one of those things where it was fun. It definitely was fun. It was one of those out of body moments where you feel like you’re watching yourself inside the tank and you see all the sharks there. Once you start the pitch and you get through that, you can’t help but have a lot of fun in there. That was the biggest thing for us, to just go in there, have fun, be passionate, and hope they like the product.</span></p>

<p class="p1"><span class="s1"><b>F: How did it feel getting that offer from Robert?</b></span></p> <p class="p1"><span class="s1">JP: It was exciting to get the offer from Robert, but the amount he wanted made it bittersweet.</span></p> <p class="p1"><span class="s1"><b>F: Why did you walk away? Do you regret it?</b></span></p> <p class="p1"><span class="s1">JP: I walked away from the offer because giving up 36% equity at this point didn’t make sense. We’re confident in our business and the growth we’ve seen and have no regrets about walking away.</span></p> <p class="p1"><span class="s1"><b>F: Would you have accepted that offer from another shark? Why was it so important to keep the extra 16% equity?</b></span></p> <p class="p1"><span class="s1">JP: No, we would not have accepted that offer from another shark – I was firm on not going above 20% for the $300k. Had we accepted the 36% offer, that equity would have been split between myself and the other co-founder, which would essentially make the investing shark majority owner and not something that we could feel comfortable with.</span></p> <p class="p1"><span class="s1"><b>F: What did you learn from your time in the tank?</b></span></p> <p class="p1"><span class="s1">JP: Going into the tank was intense but also a lot of FUN. I didn’t expect to walk out of there turning down an offer, but we had a game plan and stuck to it. If anything, the experience built my confidence in our product and our game plan moving forward, it was incredible to see the sharks try BoomBoom… and enjoy it!</span></p> <p class="p1"><span class="s1"><b>F: Would you have adjusted anything in your pitch to change the result?</b></span></p> <p class="p1"><span class="s1">JP: Chelsea and I went back and forth after we filmed the show saying &quot;we could have said this….&quot; or &quot;what if we had done that…&quot; and so on. I think that’s only human nature. But we walked away feeling proud of BoomBoom and did our best to share our vision. Ultimately, I don’t there’s much we could have done to get them on board unless we went in asking for less cash. </span></p> <p class="p1"><span class="s1"><b>F: Did you adjust anything in your business model after hearing what the sharks had to say about it?</b></span></p> <p class="p1"><span class="s1">JP: Mr. Wonderful got hung up on our suggested retail price and the lack or margin if we were to go down the route of getting into convenience stores. The sharks made some valid points, but we also explained that our cost of goods at scale will come down, meaning more margin for everyone. All of our retail efforts up to this point have been small test runs so we will be reviewing pricing for different channels to make sure everyone involved is getting the margins needed for success.</span></p>”>

JOHN PINTO, CHELSEA PINTO (BOOM.BOOM)ABC

Last week we spoke to the Young family about their emotional story and the experience of taking a deal with all the sharks on the panel. This week as part of a larger look at the show experience, we spoke with John Pinto the CEO of boom.boom, the essential oils-based nasal inhaler who came into the tank asking for $300k for 10% of their business. Over the course of their pitch, the sharks seemed intrigued by the product and the margins but had questions about their plan to take to retail and gain repeat customers. When hope looked lost, Robert Herjavec swooped in with an offer to give them the $300k for 36% of the company. John, who himself owns only 36% of the company he helms, was unwilling to give up that amount of equity and countered unsuccessfully with 15% for the money, and then 20%. Robert refused to accept that little equity for the money and John and his wife Chelsea made the difficult choice to walk away from the offer they came on the show to get. I spoke with him about how he prepared for the show and ultimately how you walk away from a deal with a shark on national television.

Forbes: So why’d you guys go on Shark Tank?

John Pinto: So my wife and I, Chelsea, she came on the show with me, she did product development and some of the marketing side of the business, but we’ve seen every episode of Shark Tank together and so we always watched it, we always thought boom boom would be a great product for the show. It’s one of those things where you hear the whole story and you see people try it, it definitely piques interest. We just felt like it was the next best step, we were at a place where we were seeing decent growth year over year and we really wanted to get that next level of exposure and we really wanted to get a deal! I mean that’s the point right! We wanted to get investors, and to get a deal and be able to take it to the next level!

F: Did you guys have a particular shark in mind that you wanted to work with?

JP: So we right now are an e-commerce business. 90% of our business is online, and we feel that the product can really fit well in the retail space, kind of at the point of purchase, and so we went in feeling like Lori would be the best for the business.

F: How did you guys prepare to go on?

JP: Well we practiced the pitch more times than I can count so that was step number one. Step number two for us was mapping out all the questions, a long long list of questions that we thought they would ask and write out our answers and be prepared to talk about all the things and just going in there with confidence in what we’re doing and believing in what we’re doing. We know we’re on the right track and it was about being able to portray that through our pitch and our answers.

F: As a fan of the show how did it feel to be there?

JP: Well first we were just so grateful to be there. Chelsea and I were like wow this is a really amazing opportunity. We know so many people apply and don’t make it to that final point of being able to pitch the sharks so that was kind of the biggest thing. The day of, it’s very, the whole process is very dialed in. It’s the 10th season, they clearly know what they’re doing, they do it really well, it was very organized and very timed out in a nice way. Walking into the tank was one of those things where it was fun. It definitely was fun. It was one of those out of body moments where you feel like you’re watching yourself inside the tank and you see all the sharks there. Once you start the pitch and you get through that, you can’t help but have a lot of fun in there. That was the biggest thing for us, to just go in there, have fun, be passionate, and hope they like the product.

F: How did it feel getting that offer from Robert?

JP: It was exciting to get the offer from Robert, but the amount he wanted made it bittersweet.

F: Why did you walk away? Do you regret it?

JP: I walked away from the offer because giving up 36% equity at this point didn’t make sense. We’re confident in our business and the growth we’ve seen and have no regrets about walking away.

F: Would you have accepted that offer from another shark? Why was it so important to keep the extra 16% equity?

JP: No, we would not have accepted that offer from another shark – I was firm on not going above 20% for the $300k. Had we accepted the 36% offer, that equity would have been split between myself and the other co-founder, which would essentially make the investing shark majority owner and not something that we could feel comfortable with.

F: What did you learn from your time in the tank?

JP: Going into the tank was intense but also a lot of FUN. I didn’t expect to walk out of there turning down an offer, but we had a game plan and stuck to it. If anything, the experience built my confidence in our product and our game plan moving forward, it was incredible to see the sharks try BoomBoom… and enjoy it!

F: Would you have adjusted anything in your pitch to change the result?

JP: Chelsea and I went back and forth after we filmed the show saying “we could have said this….” or “what if we had done that…” and so on. I think that’s only human nature. But we walked away feeling proud of BoomBoom and did our best to share our vision. Ultimately, I don’t there’s much we could have done to get them on board unless we went in asking for less cash.

F: Did you adjust anything in your business model after hearing what the sharks had to say about it?

JP: Mr. Wonderful got hung up on our suggested retail price and the lack or margin if we were to go down the route of getting into convenience stores. The sharks made some valid points, but we also explained that our cost of goods at scale will come down, meaning more margin for everyone. All of our retail efforts up to this point have been small test runs so we will be reviewing pricing for different channels to make sure everyone involved is getting the margins needed for success.

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