A Bidding War Breaks Out During Scrub Daddy's Pitch | Shark Tank US | Shark Tank Global

00:12:21
https://www.youtube.com/watch?v=ae5MssJ8en4

Summary

TLDRAaron Krause presents Scrub Daddy, a revolutionary cleaning sponge, in Shark Tank. The sponge's unique ability to switch from soft to firm with temperature changes makes it suitable for various cleaning tasks without scratching surfaces. Seeking a $100,000 investment for 10% equity, Aaron plans to ramp up production by establishing a manufacturing facility. Sales have been promising on QVC and local supermarkets. While some sharks express doubt about its retail success, Lori Greiner sees potential and offers $200,000 for 25% equity, eventually agreeing at 20%. Aaron accepts Lori’s deal, believing her expertise will propel Scrub Daddy to new heights in the market.

Takeaways

  • πŸ’‘ Scrub Daddy is a versatile cleaning sponge that changes texture with water temperature.
  • 🎯 Aaron Krause pitched for $100,000 in exchange for 10% equity in his company.
  • πŸ“ˆ Scrub Daddy saw promising sales on QVC and local supermarkets.
  • 🀝 Lori Greiner offered $200,000 for 25% equity, finalized at 20%.
  • 🏭 Aaron plans to scale production with a new manufacturing facility.
  • πŸ›’ Sharks were skeptical about retail success but saw potential on QVC.
  • πŸ”‘ Unique selling proposition: non-scratch cleaning and versatility.
  • πŸ“¦ Future product expansions like Scrub Mommy are on the horizon.
  • πŸ“‰ Concerns were raised about dependency on single sales channels.
  • πŸŽ‰ Aaron successfully seals the deal with Lori, aligning with her QVC expertise.

Timeline

  • 00:00:00 - 00:05:00

    Aaron Krause introduces Scrub Daddy, a high-tech scrubbing tool that changes texture with water temperature, seeking $100,000 for 10% equity. He illustrates its cleaning efficiency, versatility, and re-usability. Selling in five supermarkets and QVC, he has patents and plans for an independent manufacturing facility to meet demand. Concerns arise about retail success, competition with cheaper products, and dependency on QVC sales.

  • 00:05:00 - 00:12:21

    Lori offers $100,000 for 30% and assures retail success, while Kevin proposes a different model without equity loss. Multiple offers are made, raising the stakes significantly. Aaron negotiates Lori's offer down to 20% for $150,000, securing a deal. Intense negotiations highlight investor competition, with Lori confident about infomercial potential and retail expansion.

Mind Map

Video Q&A

  • What is the product Aaron Krause is pitching?

    Aaron Krause is pitching the Scrub Daddy, a versatile cleaning sponge that changes texture with water temperature.

  • What does Aaron seek from the sharks?

    Aaron seeks a $100,000 investment in exchange for 10% equity in his company, Scrub Daddy.

  • How does the Scrub Daddy sponge work?

    The Scrub Daddy sponge changes from soft in warm water to firm in cold water, allowing it to handle different cleaning tasks effectively.

  • What were Scrub Daddy's sales figures before appearing on Shark Tank?

    Scrub Daddy had total sales just north of $100,000 from QVC and local supermarkets.

  • Which shark offers Aaron a deal?

    Lori Greiner offers Aaron a final deal of $200,000 for 20% equity.

  • Does Aaron accept Lori's offer?

    Yes, Aaron accepts Lori's offer of $200,000 for 20% equity.

  • What's the significance of QVC for Scrub Daddy?

    QVC is significant for Scrub Daddy as it has been a successful sales channel for the company, with increasing orders on each appearance.

  • What does Aaron plan to do with the investment?

    Aaron plans to set up an independent manufacturing facility with automated equipment to increase production capacity.

  • What concerns do the sharks have?

    Sharks are concerned about Scrub Daddy being dependent on QVC and the challenge of selling a single product in retail.

  • What other product ideas does Aaron mention?

    Aaron mentions having ideas for other products like Scrub Mommy and Scrub Baby for different cleaning purposes.

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  • 00:00:00
    [Music]
  • 00:00:04
    first into the shark tank is aaron kraus
  • 00:00:06
    who believes his product will make
  • 00:00:08
    everyday cleaning easier
  • 00:00:13
    [Music]
  • 00:00:15
    hi sharks i'm aaron krause from
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    philadelphia and i'm known as the daddy
  • 00:00:19
    of the scrub daddy the cutest but most
  • 00:00:21
    high-tech scrubbing tool in the world
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    today i'm seeking a 100 000 investment
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    in exchange for 10 equity in the scrub
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    daddy business it's the greatest kitchen
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    scrubbing tool you ever used because
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    scrub that it completely changes its
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    texture by just adjusting your water
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    temperature let me show you how that
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    works
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    here i've got some hot water here i've
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    got some cold water when i immerse the
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    scrub that is in the hot and cold water
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    a complete transformation occurs now to
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    show you that i've got 10 pound weights
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    here under the 10 pounds it's soft and
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    compressible and that's like a sponge
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    that's for your general scrubbing
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    applications but here
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    check that out it's hard and firm that's
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    going to be for heavy duty scrubbing
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    applications we burned on brown and
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    gravy tomato sauce cheese and mustard
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    onto a glass stove top and a stainless
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    steel pan i'm going to take the scrub
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    dye and you're going to see it's just
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    going to attack right into that burned
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    on nest scrubbing it right off and
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    remember i'm just using water here
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    there's no chemicals at all and it's
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    going to cut right through that
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    it won't scratch any of your surfaces
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    but it will clean them
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    beautifully now this grub dye is not
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    really smiling anymore so i'm going to
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    put him here in the warm water in just a
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    couple seconds
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    voila he's back to bright fresh and
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    clean every time sharks that's not just
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    another smiling face you put it on your
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    hand you can get to the bottom and clean
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    the sides in one move and that smiling
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    mouth
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    that cleans spoons knives forks spatulas
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    even large serving spoons on both sides
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    at the same time
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    sharks with your help scrub that i will
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    be scrubbing
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    and smiling in every kitchen in the
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    world
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    wow
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    rub daddy i never witnessed a live
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    infomercial that was fantastic that was
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    incredible do you have samples i do
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    where are you selling this now thank you
  • 00:02:10
    well currently we have it in five
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    supermarkets in the philadelphia area we
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    also sell it on our website
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    i've been on qvc three times over about
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    three months and how'd it go fantastic
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    they've invited me back over and over
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    and every time i go on they reorder 30
  • 00:02:26
    more than the last time so scrub daddy
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    is humming and what were your total
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    sales qvc wholesale just north of 100
  • 00:02:33
    000
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    only in four months do you have a patent
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    on this i actually have a patent i have
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    two more pending we have the trademark
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    we have domain names okay erin what do
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    you need the hundred thousand dollars
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    for what i want to do is set up an
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    independent manufacturing facility with
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    automated equipment why do you need to
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    go into your own facility the biggest
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    problem is i'm on their time schedule
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    are you saying that you could be making
  • 00:02:54
    more revenue if you're 24 7 making scrub
  • 00:02:57
    daddies the way qvc is going and we're
  • 00:02:59
    just about to launch in a whole bunch of
  • 00:03:00
    stores we're going to need that capacity
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    and i have 18 years experience running a
  • 00:03:05
    manufacturing plant that runs 24 hours a
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    day i know exactly what i need to do to
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    make this thing really efficient and i'm
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    looking to get a strategic partner who
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    can open this up into the retail stores
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    i'm only in five supermarkets that's it
  • 00:03:17
    what's your cost the cost to make one's
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    about a dollar what are you selling them
  • 00:03:20
    for
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    about two dollars and eighty cents
  • 00:03:23
    wholesale wholesale this needs to be in
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    every supermarket drugstore walgreens
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    it's so expensive
  • 00:03:30
    mrs slabinsky goes to the store and
  • 00:03:32
    picks this off the shelf and says hey
  • 00:03:33
    it's a piece of foam with a smiley face
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    on it costs two cents to make in china
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    that's what she's thinking
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    because a brillo pad which is
  • 00:03:40
    traditional product is what a 20 20
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    you're comparing it to the lowest end of
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    the lowest end you take it up to the
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    highest end talk about the the ones like
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    adobe pads or other pads out there that
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    are you know brand new daddy i i think
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    you've done a great job today but i
  • 00:03:54
    don't know if it's gonna work in retail
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    i don't i don't buy into that vision
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    just in the packaging
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    i just don't know if i see the
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    difference it doesn't sell on a shelf
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    correct but if you put it in display
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    shippers which we've built these
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    beautiful cardboard display shippers and
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    it communicates the message to everybody
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    end caps you're gonna have to pay for
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    those things
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    it's hard to get them even if you pay
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    for them
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    great job today but i don't see the
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    retail vision i'm out
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    i understand
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    like the product i think you're doing
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    great things you're doing it the exact
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    right way
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    but when i hear qvc no disrespect to
  • 00:04:35
    laurie when the company's sales are
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    completely dependent on qvc that's a
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    disaster waiting to happen
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    i've got 3 000 stores lined up right now
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    we're going to be in 3 000 stores i
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    understand but even okay put aside qvc
  • 00:04:50
    you're still a one product company right
  • 00:04:52
    not for long we've got scrub mommy we've
  • 00:04:54
    got scrub baby for doing baby bottles
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    i've got a holder that sits it on your
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    sink and it's got drains in the legs
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    you don't understand who you're dealing
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    with i am right
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    i'm not doubting the scrub market i'm
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    not doubting you are these scrub daddy
  • 00:05:06
    but i'm not a scrub pimp so i'm out
  • 00:05:11
    that hurts mark i wanted to work with
  • 00:05:13
    you so bad
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    our qpc does over 8 billion in sales a
  • 00:05:17
    year and i've done over 500 million yes
  • 00:05:20
    you have and you rotate products in and
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    out of there and once those products are
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    out they're out how about this deal
  • 00:05:27
    a hundred thousand for fifty percent
  • 00:05:32
    [Laughter]
  • 00:05:38
    let's start the bidding there
  • 00:05:41
    all right you're out
  • 00:05:44
    you know i'm somebody you can paint any
  • 00:05:46
    picture and i think that lori is a
  • 00:05:47
    vicious backstabbing shark that's all
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    true
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    but sometimes i love her as well because
  • 00:05:54
    she is the qvc queen
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    so i'm offering
  • 00:05:58
    50 000
  • 00:06:00
    for 15
  • 00:06:02
    if you can raise the rest from lori and
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    if she wants to do business with me
  • 00:06:11
    well here's the thing
  • 00:06:26
    so i'm offering fifty thousand dollars
  • 00:06:29
    for fifteen percent if you can raise the
  • 00:06:32
    rest from lori and if she wants to do
  • 00:06:34
    business with me
  • 00:06:36
    well here's the thing
  • 00:06:38
    you've heard me say before i can tell
  • 00:06:40
    instantly if it's a hero or a zero
  • 00:06:45
    and i think what you've got here is a
  • 00:06:47
    hero
  • 00:06:49
    no offense demon i don't need you
  • 00:06:54
    you don't
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    my offer is
  • 00:06:57
    a hundred thousand dollars for 30
  • 00:07:00
    percent
  • 00:07:03
    i will get you into infomercial right
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    away and
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    i'm pretty confident that we could get
  • 00:07:09
    this into all retail stores across the
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    country within literally
  • 00:07:14
    weeks
  • 00:07:19
    i'll tell you what i'll do for you
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    i'll give you a hundred thousand dollars
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    we'll never agree on what percentage i
  • 00:07:24
    should get i'm gonna change the model
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    completely you're gonna keep the whole
  • 00:07:27
    company
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    but i want to be your financier
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    i want you to give me 50 cents on every
  • 00:07:35
    unit sold until i get 100k back then it
  • 00:07:37
    drops to 10 cents in perpetuity
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    you just want to increase your cost of
  • 00:07:42
    goods sold by 50 nothing right why give
  • 00:07:44
    up 30 of your company just to sweeten
  • 00:07:47
    the pot a little bit i'm gonna give you
  • 00:07:48
    150 000
  • 00:07:52
    but 25
  • 00:07:56
    whoa
  • 00:08:00
    what are you gonna do i'm changing my
  • 00:08:01
    offer actually
  • 00:08:04
    a hundred thousand dollars but for 25
  • 00:08:08
    the experience the connections
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    everything that i have it will be
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    successful i am partnered with the best
  • 00:08:14
    of them
  • 00:08:16
    why give up any part of scrub daddy
  • 00:08:18
    think of the relationship you have with
  • 00:08:20
    the sponge
  • 00:08:21
    you're selling this thing out and it's
  • 00:08:23
    gonna cry it won't be happy anymore
  • 00:08:39
    i want the answer to one question all
  • 00:08:40
    right do you think 25 of the equity in
  • 00:08:44
    your company is worth more or less than
  • 00:08:47
    10 cents a unit in perpetuity and he's
  • 00:08:49
    going to talk where is he going to take
  • 00:08:51
    you it doesn't matter it does matter
  • 00:08:53
    because connections
  • 00:08:55
    you keep 25 of this business which may
  • 00:08:57
    sell 10 million of these and you keep it
  • 00:09:00
    all for yourself but you're going to be
  • 00:09:02
    keeping nothing because he doesn't know
  • 00:09:03
    how to get out you haven't had any
  • 00:09:05
    success you're an idiot you don't know
  • 00:09:07
    what to do
  • 00:09:08
    i know what to do exactly just did a
  • 00:09:10
    half a billion dollar deal with walmart
  • 00:09:13
    half a billion but that is so i think
  • 00:09:16
    what products okay i i like to write a
  • 00:09:19
    second letter
  • 00:09:20
    you can speak and it's saying
  • 00:09:23
    laurie go with kevin
  • 00:09:25
    aaron there are like children up here
  • 00:09:26
    it's awful let's recap yeah let's recap
  • 00:09:28
    please 150 000 for 25 okay from damon
  • 00:09:33
    kevin 100 000 for no percent and a tiny
  • 00:09:37
    tithe of ten cents you keep all the
  • 00:09:39
    equity
  • 00:09:40
    lori is offering you a hundred thousand
  • 00:09:44
    for twenty-five percent i offered 150
  • 00:09:47
    last time whoa i didn't hear that 100
  • 00:09:49
    lori oh well i changed my mind 150 000
  • 00:09:53
    for 25
  • 00:09:55
    i'll make you a millionaire within a
  • 00:09:57
    year
  • 00:09:59
    so mine just went to 175. whoa
  • 00:10:03
    is up to 175 yeah
  • 00:10:06
    mine just went to two
  • 00:10:08
    whoa
  • 00:10:14
    the good news is
  • 00:10:16
    i just made you an extra hundred
  • 00:10:18
    thousand
  • 00:10:20
    i'm out i wanted to stick it to her
  • 00:10:24
    ouch
  • 00:10:26
    [Music]
  • 00:10:28
    wow
  • 00:10:30
    i'll drop the 50 cents down to 25 cents
  • 00:10:33
    until the 100k is recovered and then go
  • 00:10:36
    to 10 cents
  • 00:10:39
    will you go to five cents
  • 00:10:42
    seven and a half is a deal
  • 00:10:44
    [Music]
  • 00:10:45
    aaron you've got two offers on the table
  • 00:10:49
    what are you gonna do
  • 00:10:51
    you have to make up your mind right now
  • 00:10:54
    you don't see the benefit of having me
  • 00:10:56
    as a partner i never said that you need
  • 00:10:58
    to tell me right now whether you're
  • 00:11:00
    going with me or not or i'm out
  • 00:11:05
    i'm here for you
  • 00:11:08
    i think your deal is awesome um
  • 00:11:11
    the equity amount is is too much would
  • 00:11:13
    you consider coming down to 20.
  • 00:11:20
    you know what i will
  • 00:11:22
    i'll go to 20. we got a deal got a deal
  • 00:11:24
    right good
  • 00:11:26
    way to go aaron
  • 00:11:30
    congratulations thanks look i'm so
  • 00:11:31
    excited
  • 00:11:33
    you are dead to me and the sponge is
  • 00:11:35
    dead thanks guys
  • 00:11:38
    scrub daddy you suck
  • 00:11:43
    that is awesome got a deal glory
  • 00:11:46
    it's it's a dream come true it's
  • 00:11:47
    absolutely a dream come true i don't
  • 00:11:49
    care how much money you have i'm so
  • 00:11:51
    satisfied to know that you lost an extra
  • 00:11:53
    hundred i know you'll get me back
  • 00:11:55
    gang buster huge hit in infomercial good
  • 00:11:58
    deal lori it's a great deal
  • 00:12:20
    you
Tags
  • Scrub Daddy
  • Shark Tank
  • Cleaning tool
  • Investment
  • QVC
  • Retail market
  • Innovation
  • Equity
  • Manufacturing
  • Negotiation