Season 5 | Episode 507 | EP507
In Season 5, Episode 2 of Shark Tank, Charles Michael Yim approached the Sharks seeking an investment of $250,000 in exchange for 10% equity in ‘Breathometer’. The company is currently based in San Francisco, CA.
The Breathometer is a small accessory designed to be attached to any smartphone. Upon breathing into the Breathometer the user will instantly get a blood alcohol level reading through the companion mobile application within a couple of seconds. If the blood alcohol level reading is above the legal limit then the user of the Breathometer will have the option of calling a local cab company in a single click.
This was the second round of investment for the mobile breathalyzer test. A few weeks prior Charles Michael Yim had secured an investment of $1 million from other investors. The second round of investment required an additional $1 million. Yim’s goal was to secure $250,000 from the Sharks.
The Breathometer had already demonstrated that it had the capability to have mass market appeal. It was listed on the crowdsourcing website ‘Indiegogo’ for a single month. During this time it had raised $100,000 in funding.
The pitch and the product were so interesting to the Sharks that the offers started to come in almost instantly. The Sharks already knew that a top quality safety product would have the capability of being huge on the international market. They believed that the Breathometer could quite easily become a multi-million dollar company in less than a year with the right marketing behind it.
Mark Cuban: $500,000 for 20% equity in the company. Lori inquired as to whether she would be able to join in on the offer but Mark declined.
Kevin O’Leary: $250,000 for 15% equity in the company.
At this point Charles Yim indicated that if he received a suitable offer he would be more than willing to allow combined bids of up to $1,000,000. This would mean that his second round of funding would be completed in a single pitch for the mobile breathalyzer. All Sharks were happy with this offer but Mark Cuban still wanted to be the only Shark in on the deal. He was eventually convinced that the five of them working on a single project could potentially lead to far higher profits in the long term.
>Charles Yin walked away from the Shark Tank with $1,000,000 in investment. He parted with 30% of his company. 15% of that went to Mark Cuban who put up $500,000 of the cash himself. The other 15% went to the other four sharks who split up their investment into four equal portions.
Mark Cuban has invested into over 80 ventures and counting. Mark looks for unique companies and products that can be game changers or strategic to a theme he likes or to another portfolio company. Avoid the word “passion” at all costs.
Daymond John prefers to invest in people; not companies. In order to secure an investment with Daymond you’ll need to communicate value as to how it will enrich lives, leverage portfolios or bring in money. Avoid self-fulfillment statements if you want him to take the bait.
Kevin O’Leary is blunt, colorful outspoken and at times unpredictable. If you want to secure an investment from Mr. Wonderful you’re going to need to show him the money. Kevin loves royalty deals, patent holders and products with licensing potential.
Lori Greiner has helped launch over 400 products with a 90% success rate on new items launched. Lori looks for products that solve a problem, can be sold at a reasonable price and are appealing to the mass market.
Robert Herjavec tends to only invest in well executed businesses that have paying customers. If you want to capture Robert’s attention quickly, have a good story, be humble, know your numbers and understand good timing.