'What the hell were we thinking?' Startup founders who landed a $55,000 deal on 'Shark Tank' nearly missed their big break
- The founders of Cousins Maine Lobster appeared on "Shark Tank" in 2012. They landed a $55,000 deal with Barbara Corcoran.
- When the "Shark Tank" producers initially reached out to them, the founders declined - twice - because their business was only two months old.
- Looking back, they say going on the show was one of the best decisions they've ever made.
Cousins Maine Lobster opened for business in April 2012. In July, they landed a $55,000 deal with Barbara Corcoran on "Shark Tank."
But the Cousins Maine Lobster founders - Jim Tselikis and Sabin Lomac - very nearly missed out on this opportunity.Tselikis told Business Insider that the "Shark Tank" producers reached out to them and invited them to try out for the show shortly after Cousins Maine Lobster launched. The founders declined - twice.
"Looking back," Tselikis said, "it's one of those things where you think, 'What the hell were we thinking?' But what we were thinking was: We have two months of business, we don't know where we're headed, we don't have a lot of history to justify certain valuations."
What's more, Tselikis said, they didn't know how or whether they wanted to scale their company. At the time, Cousins Maine Lobster was a lone food truck in southern California.
Finally, the founders relented and agreed to try out for "Shark Tank."
Initially, they were asking for $55,000 in exchange for 5% of their company, noting that they couldn't keep up with customer demand and needed the Sharks' help.
Unsurprisingly, some of the Sharks were skeptical. Kevin O'Leary (a.k.a. "Mr. Wonderful") couldn't fathom why the founders were valuing the business at over $1 million, given that they had just $150,000 in sales so far.Daymond John said the founders' valuation was "crazy" and asked them to give him their best offer. Tselikis and Lomac came back with 7% to 8%. John declined and went out.
Robert Herjavec then offered the founders $55,000 for 25%. The founders turned him down, so he offered them $100,000 instead.
"You don't need that much money," said Barbara Corcoran, adding that she was a "genius marketer" and sharing all the ways she'd change the company's branding.
After a quick round of negotiations, Corcoran and the founders agreed on a deal: $55,000 in exchange for 15% of the company.
Today, according to the company's website, they have 20 trucks in 13 cities throughout the US and restaurants in cities including Taichung, Taiwan. According to Money, the company brought in more than $20 million in 2017.
Tselikis said of the company's appearance on "Shark Tank," "Looking back, it's probably one of the best decisions we ever made."