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tv   Frontline  PBS  October 29, 2013 10:00pm-11:00pm EDT

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that is delicious. wow. thank you. thank you. and your sales? last year, we did just under $1 million in cookies. wow. (daymond) ooh! i wouldn't eat these unless i had to. they don't taste that good. (laughs) (kevin) why would anybody eat this unless they had to? (laughter) well, you're in the minority thinking that they don't taste good, 'cause lots of our customers are not gluten-free. let me tell you this. so, one in three u.s. households is now catering to someone in their house who has to eat gluten-free for one reason or another. so this is the best of the cookies you wouldn't eat unless you had to? the very best. (robert chuckles) no. you don't know this, but i'm a gluten-free mogul. no, i do know that, mark. oh, you do know? okay. so what got me interested is because of athletic performance. steve nash and other athletes now eat gluten-free, so it's become more mainstream. but it's a very competitive market, as kevin alluded to. how much money do you make on $1 million in sales today? it's about 10%. but we're nowhere near scale in terms of what our profitability could be in terms of cost and maximizing our value on overhead.
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how do you blow this up so that you become the brand for... sand or whatever it is? okay, so that is the opportunity we have right now. what's amazing about our cookies is that they're not the boxed, sit on the shelf next to 16 other brands. this is a perishable cookie that sits in the bakery department. how long is its shelf life in that bag? 30 days outside of the freezer. what does it cost you to make? about a dollar to make one pack of two cookies. so, two cookies are costing what at retail? $3.99 to $4.99. (daymond) that's a lot. that's an expensive cookie. you know, this is where the price of this category lives. if you go and you get a single gourmet allergen-friendly cookie, it's gonna cost you 2 bucks. do you have a retail location in vermont? no. actually, the one retail location that we tried to put together was destroyed three days before opening by hurricane irene in a flood. we lost $15,000 and a whole summer's worth of long nights building things. did you think you were going to survive through that
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when that happened? i mean, we are the most relentless businesspeople you're ever gonna meet. that was the smallest setback that we've survived. yeah. yeah, we've had-- we've had a lot of knocks. when the recession hit, it really hit our business. we couldn't pay our loans. we called the bank and said, "we don't think we can pay next month." so what did the bank say? "when are you gonna pay us? we're gonna auction all your stuff off." and dan and i decided the only way we're out of business is if someone comes and literally takes the seat from under our butt. you know, we were out of money, we were out of time, but we just fought and fought and fought. we got really creative. we built an e-commerce site, and we just sold, sold, sold, and since then we've worked our way up to just under $1 million last year. how are you distributed, and what percentage of your sales are wholesale? so, 90% of the sales are wholesale, at least. we are distributed by the--the country's largest natural foods distributor. we were just at the i.d.d.b.a. trade show in new orleans. essentially, every single person that walked up to the booth said, "we're looking for this. this is great. this is the best gluten-free thing we've tasted yet." wow, you know, you're a good-- you're a good salesman. (daymond) you are a good salesman.
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maybe they all just wanted a free cookie. (laughs) yeah. did you get any actual hard orders? you--you don't get p.o.s in the food industry until you're ready to deliver. it's just not how it works. you're a great salesperson, so i-i think you guys work amazing together. um, i-i have to be honest. i really didn't like the cookie. i'm not saying it was bad, but i wasn't in love with it. and i have to be passionate about something i invest in. so i'm out. ♪ i see this as almost, like, another, uh, loan to bridge the gap between what you need and what you have. and, uh, it's never a good position for an investor to lend money in that situation. so i'm out. well, let me speak to that, because generally what happens with food businesses like this is they expand to about $3 million, and they get to a place where they're very interesting to large players in the industry that want to add on a brand.
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that's the goal. we need to get over that $10 million mark to make this a saleable company. it's a big stretch. dan, i'm not as convinced about the growth strategy. i think that there's gonna be a lot of competition. i think you have a journey ahead of you, and i just don't want to go down that journey. um... today, i'm out. um... you're a very good salesman. i have the ultimate respect for the sales guy, 'cause that's what i am, i'm a salesman, and it's really hard. you're good. i just hate your product. i'm out. well, mark... (liz) it's down to you, mark. it's just you and us. and i know that you're into the gluten space. and i-i have about $1 million worth of business that i'm percolating just from one trade show. i've got three major grocers on the hook. i've got a handful of little guys, and i've got a lot more selling to do. i know you hate p.r. companies. i know that you can't stand schwag.
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we don't do any of that crap. you know, i've always sa sales is the best market. the way i market this product is i get cookies into people's mouths, i get cookies into the store, and they look fabulous. we also have, and i love this-- dan. yes, sir? let him go. you know, i feel like-- i feel like you guys aren't getting it. and i'm not sure what it is i'm doing wrong, but this is a huge opportunity. we're--the time's-- man, you can sell. i like everything you've said. one issue. valuation. okay, well, let's talk about that. what do you think it's worth? you know, i'm gonna let you make me an offer. i use this all the time. i'll do the 24-second clock spiel and all that, and i'll say, "here's my offer. take it or leave it." right? you got 24 seconds. mm-hmm. we're gonna flip it. okay. make me an offer, and i'll say yes or no,
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his day of coaching begins with knee pain, when... [ man ] hey, brad, want to trade the all-day relief of two aleve for six tylenol? what's the catch? there's no catch. you want me to give up my two aleve for six tylenol? no. for my knee pain, nothing beats my aleve. (dad) just feather it out. (son) ok. feather it out. (dad) all right. that's ok. (dad) put it in second, put it in second. (dad) slow it down. put the clutch in, break it, break it. (dad) just like i showed you. dad, you didn't show me, you showed him. dad, he's gonna wreck the car! (dad) he's not gonna wreck the car. (dad) no fighting in the road, please. (dad) put your blinker on. (son) you didn't even give me a chance! (dad) ok. (mom vo) we got the new subaru because nothing could break our old one. (dad) ok. (son) what the heck? let go of my seat! (mom vo) i hope the same goes for my husband. (dad) you guys are doing a great job. seriously. (announcer) love a car that lasts. love. it's what makes a subaru, a subaru. kfc go cup. [ female dispatcher ] we have a 10-31 in progress. you take this one kid.
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[ car door opens, closes ] [ crunches ] [ male announcer ] try crispy tenders and wedges. just 1 of 5 new kfc go cups only $2.49 each. ♪ four sharks are out. mark cuban is interested, but he doesn't like liz and dan's initial offer of 10% of the company for $200,000 and has given them one last chance to make him a final offer. could we step into the hallway and just talk about it for a moment? yes, you can.
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okay, thank you. wow. he's a cool guy. (barbara) yeah, he is. i like him. he is a great salesman. but the valuation's crazy. it is crazy. (clears throat) no way. hmm-mnh. so, liz and dan. (chuckles) yes. you're gonna only get one shot at this. this is what i call a yolo moment-- you only live once. (chuckling) what are you gonna do? i don't we've ever seen this in the tank before. you're the first. you either win big, or you really screw it up. let's go. mark, we're gonna go a little higher than we were comfortable going, because we'd really like to have you as a partner, and we're gonna say-- ask you if, uh, you would do $200,000 for a 20% stake. ♪
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no, thank you. i'm out. thanks, sharks. thank you, sharks. (barbara) thank you. whoa. ooh. oh, man. what was your number? i needed to get 33%. 33%? yeah. what a moment. (voice breaking) we're gonna be fine. you know, we'll find another way. but it actually-- it just bummed me out they didn't like the cookies, and it bummed me out that they didn't believe in us as people. you know, i've heard them invest in people before, and, i mean, they were impressed by dan, but i just didn't feel like they got us. last season, we saw stephan aarstol make a deal with mark cuban for his tower paddle board business. so i'm willing to give you $150,000 for 30% of the company. let's do it. whoo!
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let's see what he's up to now. ♪ morning, girls. since making my deal with mark cuban, the growth has been off the charts. we went from just $100,000 in lifetime sales to over $800,000 in just a few months. i like it, dude. they're looking good. we're on pace to do $1.5 million in sales through our web site alone this year. hey, mark. it's stephan. mark cuban is amazingly accessible. i don't think the guy sleeps. he's behind this company 100%. ready, set, go! (cheering) (stephan) the "shark tank" experience has really jumped my career ahead probably 20 years. it's a once-in-a-lifetime opportunity, and this is just the beginning. ♪
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♪ next up is lee dahlberg, who is ready for a comeback with his trendy fashion accessory. hello, sharks. my name is lee dahlberg, and i'm the owner, designer, and creator of a company called rock bands. today i'm seeking a $100,000 investment for 20% equity in my company. sharks, i've developed a brand that not only has people looking good, it has them feeling good as well. it's called rock bands, and as simple as it sounds, it is indeed a rock on a band
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that makes a rock band. (laughs) a little deeper than that... (chuckles) i use stones that have healing elements. now, each rock band comes in a backstage equipment case from a rock concert, keeping with its theme, inside revealing the meaning of your individual stone. now, each rock band is hand-carved by a family of artisans that's been carving since the ming dynasty. (lid closes) i created the first few rock bands for me, and i had some friends that really wanted them, and then their friends really wanted them, and i thought, maybe i've got something here. so i jumped in. i sold my house to begin the company. i created a guerilla marketing campaign and i hustled, and after a lot of hard work, i was able to get in four of the top retailers in america. now, the only thing i wasn't prepared for were the politics of retail. so i definitely took a few hits along the way. but every fight led me to here today in front of you.
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everyone that sees rock band loves rock band. that even goes for the rich and famous. you don't even have to take my word. you can take it from the voice of the rich and famous. that's right, sharks. (laughter) rock bands by lee dahlberg are the hottest thing in hollywood. oh! rock bands can be seen on the celebrity wrists of bono, johnny depp, brad pitt, angelina jolie, tommy lee, britney spears, lindsay lohan, even president william b. clinton, and... me, robin leach. rock bands-- the ultimate expression of champagne wishes and caviar dreams, individuality, and fashion. love that, robin. (barbara) wow! we loved it. good job, robin. very impressive. good luck. lee, how did you get him? um, we've been friends for years. sharks, i've taken the liberty to create a rock band for each of you...
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oh, cool! based-- based on your individual personalities. awesome. thank you, lee. this is for you. this is for you. you brought out robin leach. you got our attention. ah, exactly. what do you have for mr. wonderful? oh. you are a special one. i hope it explodes. (laughter) yeah. yes. here you are. ooh, i like that. (chuckles) so--so, lee, you said they had healing powers. yes, sir? do you have any idea the history of people who've come into the tank talking about healing powers? no-- no, i'm not the great wazoo. you're not selling these as medicinal in any way, are you? no--at the end of the day, if it's a placebo, it makes everyone smile. tell--tell us about your sales. sales. i've done about $300,000 in sales. over what period? five and a half years. (mark and daymond) ohh! no--ohh! here you go. what are sales gonna be this year, lee? it all depends. the one thing about the brand is that i own the trademarks. something came up just recently-- a very well-known italian company is launching in america. they called me, and we signed a contract. they're gonna launch under the name rock band. so you licensed rock band to them? yes. it's called rock band by... (speaks italian).
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and they did $1 million last year, and they're think-- that's in europe, and my share is 40% of all u.s. sales. i'm sorry. they're gonna give you 40% of net, correct? alu.s. sales. of profit? gross or net? some of the negotiation is about helping in cost of manufacturing. okay. hold on, hold on. if they sell $100,000 worth of product-- gross sales--will they give you $40,000, or, after everything is paid, said, and done, will you get 40% of the total profit? meaning maybe $10,000. uh, as it stands, of the profit. you're right. and you mentioned something about politics of retail? i had a large p.o. agreement. how large was your purchase order? uh, 150,000. after it was manufactured, well, they did in fact cancel. isn't a purchase order a contract, though? that's what i said. and i was told, kind of, um, "sue us." walk me through the economics of all this and this. $12, and it, uh... $12 for--everything in this is $12? yes, sir. yes, sir.
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including the case? yes, sir. and what do you sell it for? um, that wholesales at $50, and then retails-- suggested $99 to $150. great margin. how many units have you sold in the last month? a dozen a week. and i know that's not impressive. i-- actually, it's not so horrible at 150 bucks a pop. i give you $100,000 today-- what are you gonna do with that? 30% will probably go to, like, web site optimization. 30% has to go to a-a lawyer to protect the trademarks that are already being infringed of mine. so what you're saying is, you've had to fight the game company that did "rock band" the game, right? well, obviously, they have the rights to do electronics... right. 'cause that's not my field, but what i have is clothing. oh, so you want to sue them for making--for the clothing? yeah--i wouldn't say "sue." i would just say, "hello. remember me?" yes, of course. we don't want to say anything harsh. (kevin) i want to make you an offer. how about i give you $100,000, and i buy rock band from you? all of it. the whole thing. (chuckles) and i pay you for the rest of your life a 7% royalty on everything i commercialize with that brand. and by the way, i have a whole bunch of lawyers
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to take care of all the problems of people that have messed around with our brand. i'm sure your letterhead would scare them a lot more than mine. (chuckles) no, i-i lp encourage them to do the right thing. no, of course. at the end of the day, i could make a lot of money with this. i'm not sure the rocks sell, so i don't really care about that. but i care about the brand. of course. i could license this brand in a lot of places. lee, i think you're unlucky. this went wrong, that went wrong, and luck tends not to change around businesses. (laughs) are you kidding me? (barbara) i hope i'm wrong. that is-- (robert) you know what? that is such crap. come on. you make your own luck in life. don't tell the guy he's unlucky and he's doomed. i don't think you're unlucky. you just got a shark to offer you $100,000 cash. i'm gonna join kevin on half his offer. (laughs) "i don't want to work you. no, no, no. there's everything wrong, but i'm gonna go in, because..." i was about to call her a witch, but i'm taking that back now. oh, no. because i'm going to partner with barbara on this. 50/50. what are you gonna do?
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listen to the whispers real quick. (laughs) smart man. (daymond) here's what i'm thinking. i'm interested in the business. mark and i, uh, invested in some girls named litter last year... i was very aware of that. and they are doing incredible. if... mark agrees, i'll give you the first $50,000 if he gives another $50,000, and we would want 40%. i don't like it. of course you don't like it, because it's far better than-- 'cause it doesn't make sense. it makes total sense. the opportunity here is to leverage the two together. all right, so, lee-- listen, lee, you've got to make a decision. you have a real offer here, all right? sure. we just don't want to be-- got a lot of noise-- you've got a team here that's been licensing masters. barb's proved herself on television a zillion times now. (kevin) she's gonna put this on television. oh, this is a shoo-in for qvc. (mark) lee, let me--let me quantify this for you. your challenge is... back offers. fulfillment and back offers. we've already done this, so you'll be able to step right in and just go to work. and i think that's why we'll be able to do a great deal. (barbara) but, lee, think about one other thing. you're an artist at heart. if you were to just unload this business and collect your check, you're free as a bird to develop your next dream, the dream after that. you're gonna have kevin
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and a real estate agent designing jewelry after that. why would you wanna stay with both feet in the business? it's all attractive in its own ways. i-i see the benefits of both, honestly. that alone is proof that you ought to be walking out of this business. anybody's who's married to a business never sees the benefit of walking away. he's just being objective and just analyzing what's in front of him. no. his heart's not in it. wow. really? lee, i'm gonna make one last statement, and then i-i may actually recant the offer. i think that we can license as well, if the opportunity provides itself, but we will also let you work on your dream instead of saying, "you've been doing this for three to five years. leave." can we make sure that the licensing is an actual part of it-- absolutely. we're gonna-- everything. it's your company still. you own 60% of the company. so i'm gonna let you answer us yes or no right now. and you'll be inspired... (kevin) lee, you have to make a decision. to seek out these licensing deals? you have to decide. basically, as long as you're in--in the same interest of licensing-- yes, we will license it. absolutely. absolutely? absolutely.
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yes or no? yes. good job. done deal. huge opportunity missed. good job, lee. looking forward to it. absolutely. all right, thank you. appreciate it. all right. just because we didn't make a deal doesn't mean you can't root for me. come on. put your hand in there. (laughing) put your hand in there. thank you. good job, lee. looking forward to it. (kevin) huge mistake. (lee exhales) he's unlucky? well, his luck just changed, barbara. (daymond) his luck just changed. his luck just changed. daymond, i'm not happy. (laughs) ♪ or waiting till later? [ all ] now! why? because it's candy! and how does eating lots of candy make you feel? it makes me feel like "ahhhhhhhhh"!
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♪ next into the tank is tereson dupuy, who invented an eco-friendly must-have for babies. hi. my name is tereson dupuy,
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and i am founder and c.e.o. of fuzzibunz diapers. i am here asking for a $500,000 investment for a 15% equity stake in my company. this trash represents the 1 ton of garbage that one baby generates in dposable diapers by the time they're potty-trained. disposable diapers make up the third largest consumer item in landfills today. one disposable diaper takes up to 400 years to decompose. but, sharks, i do have a solution. fuzzibunz are a 100% reusable diapering product that is easy to use and easy to wash at home. they save parents over $2,500 on their diapering cost, because you only need 12 fuzzibunz in comparison to 8,000 disposables. they also keep babies drier, uh, more comfortable, rash-free, which is why i created them for my own baby 12 years ago. so fuzzibunz are a pocket-style diaper.
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there's a pocket in e back that you insert a microfiber pad into. the lining is polar fleece, so even though the pad inside is wet, the lining is staying dry, so the baby's more comfortable, and less diaper rash. the outside is waterproof, so everything stays where it belongs. now let's talk about the washing, because i know everybody wants to know what do you do with the poop? (laughter) so it's easy. if it's solid poop, it just plops right on into the toilet, where it belongs, by the way. it's never solid. (laughter) i'm getting there. if it's less than the ploppable variety, we have a handy-dandy diaper sprayer that attaches to a toilet, parents can just rinse off whatever's left over, they put it in this mess-free hanging diaper pail, and then when they're ready to wash, you unzip the diapers into your washing machine, including the bag, and your hands stay clean. thank you. feeling these really makes you believe in them. thcolor of money for you. thank you. kevin, how's it compare to the one you're wearing?
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(laughter) so who's ready to invest in fuzzibunz? stop generating tons of trash, and start generating tons of cash. how long you been doing it, tereson? 12 years. 12--wow. whoa. 12 years. wow. what are your sales last year? last year, they were $3.9 million. whoa. (barbara) wow. but i've sold $24 million worth with no advertising, word-of-mouth only. where are they sold? internet sites. no retail? no big-box retail, but we have boutiques. how much profit did you make on $3.9 million? $20,000. oh! why is it so low? because i had manufacturing problems. we went overseas, into china, thought it was gonna be a good thing, until they took all of my product, patterns, et cetera, handed it over to somebody else, so now she's competing with me. i can't even tell the two products apart. kevin, are you paying attention to what she just said?
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hey. that's why you have a patent, my friend. i have a patent, but it wasn't very strong. when i first started out, i had no money, couldn't afford a good patent attorney. and your factory just gave this to her? yes. she was in hong kong. she was my distributor. wow. the story gets even worse. i mean, you're in-- you're in the poo-poo business, and poo-poo happens. yes, it does. did you sue? we are suing. wow. you know, in my business, u can sue anybody for anything, but good luck collecting. (daymond) correct. right. what do you think'll happen to your sales if by magical force, your patent's successful and you shut her down? what incremental sales would you get as a result of it? 70% more. whoa. wow. and you think your sales would go up 70%? oh, yes. not just from her, from all of the people that are squatting. well, tell us more. whoa, sorry. seriously? who else--who else is squatting? (daymond) who else? a lot of people. if you combine 'em all and roll 'em up, how much do you think annual sales are? i would say, if i had to give a good average, probably selling between $30 and $40 million. total? whoa! okay. hold on here.
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they're all breaching your patent? yes. now this is where poo-poo really happens. mm. because frankly, this is a very hard business. you've gotta get retail, you've gotta get distribution, you have inventory issues, manufacturing issues. or you work with my army of lawyers, who sues everybody into the stone age until they agree to a license deal. that is the slimiest, the nastiest, the worst element of business. welcome to the real world, mark. no! look, if you're not part of the solution, you're part of the problem. i am the solution! that is absolutely part of the problem. this is why we have patents! this is why we have law in this country. no, no, no, no. you know what you do? you out-compete. why have you not been able to just kick their butt because you're a better company, you're a better solution, and you're a better execution? and that's the position i've taken this entire time. here's what i see-- you hit a roadblock. and how you respond is exactly what guides your future. mm-hmm. unfortunately, it sounds like you talked to too many lawyers, talked to too many kevins, and you were rudder-less. and someone who's coming in is probably gonna have to come in and do more pooper-scooping,
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and i don't wanna be in the pooper scooper business, so i'm out. i'm looking at you and thinking of myself at different crossroads along the way, where people stole my stuff, things got in the way. and i just had to persist, and i see that in you. what i'm not sure i trust in you is your judgment. okay. well, barbara, if you invest in me, i will do whatever you tell me to do. but i have no interest at all in being the entrepreneur for your business. i'm an investor... mm-hmm. an advocate, but i'm certainly not gonna solve all your problems. i will not quit. and i see the vision for this company. i've had a lot of challenges, from divorce to, uh, to manufacturing issues, to... you name it. it's just not in my d.n.a. to quit. i'm sorry to say i am out. okay. thanks. daymond, i'm winking at you. you know, when you first started talking all that poo, you attracted a really big fly over here. yeah. but peeling back the layers on this onion,
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it's starting to stink... mm-hmm. and i'm out. okay. you seem to be looking for a lifeline. mm-hmm. i like to invest in businesses that are in upswing. i think once a-a stone starts rolling down a hill, it's very, very difficult to stop. i'm out. tell me if any of the assumptions i'm going to make now are wrong. you're an innovator. you practically created the cloth diaper business. i did. yet at the same time, everybody else took a huge part of it, 70% of it away from you. mm-hmm. some of that's your fault. it just is. i started this industry, i grew it, i did all of the footwork-- look, i admire your tenacity, but i don't wanna join you on your... on your ride. i wish you the best of luck, but i'm out. okay. thank you. good luck. thanks.
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i didn't get a deal from the sharks, but i'm not upset with them. they told me the truth, and they didn't do it from a good business perspective. but you know what stopped me from getting a deal? all of the i.p. squatters out there that are making tons of money off my idea. so... just look out. ♪ hidden valley will never be the same. with delicious deliveries like sandwich reads, and the zesty bold flavors of italian and vinaigrette dressings.
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♪ next in are mike lane and matt franklin, with a product they hope will get america standing straight. hello, sharks. my name is mike lane. and my name is matt franklin. our company is posturenow, and today we are here seeking a $100,000 investment for a 15% equity stake in our company. we have two very special guests to show our product-- anna trebunskaya and jonathan roberts of "dancing with the stars." (barbara) ah. (jazz playing) (robert and barbara laugh) wow. don't get jealous, mark.
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♪ god, that's so beautiful, huh? ♪ yeah! wow! (cheering) well done. well done. (mike) nailed it. mike, can she do the rest of the pitch? (laughter) yeah, please. i would love that, believe me. now we asked jonathan and anna to join us today... to show the importance of posture in ballroom dancing. and good posture's not only critical for ballroom dancing, it's critical for everyday life. unfortunately, today, we're hunched over our computers and our mobile devices, and poor posture has become a worldwide epidemic. posturenow is a simple device that can be worn inside or outside of your clothes. in fact, mike's wearing one right now. as you can see, it is two neoprene arm bands... (laughter) we're still laughing at it, just so you know. when your shoulders slouch forward, it provides a gentle reminder to keep your shoulders back and your back straight. it looks like "used by law enforcement everywhere." (laughter) yeah. no kidding, right? i-i initially came up with the idea
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because i was looking for a way to get rid of my beer belly without actually having to stop drinking beer. and i noticed that when i stood up straight, my belly would magically disappear. and one of the biggest surprises we found is how the dance community has really embraced posturenow. yeah, well, posture and timing in dancing is everything, as mark here might attest, yes? couldn't attest to, actually. yes. he has the experience. have you tried it? well, i'm actually wearing it right now, as i'm dancing. really? really? oh, 'cause you really needed it, right, jonathan? (laughter) you know what? you can always get better. how long have you been selling these? or have you been selling these? we've--to date, we've sold about $330,000 worth. whoa. whoa. and how much do you sell them for? uh, $39.95. what does it-- what does it cost to make? costs about $5 a unit. so what's your wholesale price? we--we do wholesale also. wholesale price is $19.95. how are you selling them right now? internet only. every month on google, there are over 1 million searches for "posture" and posture-related keywords. are--are chipractors and doctors gonna get behind this and say,
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"this is good for your back"? i can't say they're gonna get behind it, but they've been buying the hell out of it. and you're saying this company is worth now about $700,000? $650,000. yeah. yeah. that's what we value at. okay, $50,000 between friends, right? yeah. yeah. um, it's a lot of money you're asking for this company. i mean, you are stacking the deck, because you have anna and jonathan in here talking. yeah. why not? but the only problem is if they weren't here-- but you know what, daymond? they are here. how much money have you guys invested to this point? initially, we put about 5 grand on a credit card. oh, $5,000 now is worth $700,000. i like those numbers. these guys are drug dealers! hey, it's a great business. only in the shark tank can you create that kind of wealth. (barbara) so you do have a patent? we do. a utility patent. and you only spent $5,000? i'm sorry. i'm sorry. pending. it's--it's pending. oh, patent pending. ohh! pending! but also, we've gotten some really good support from chiropractors. and another market which we're just starting to hear from is h.r. departments of--of--of huge fortune 500 companies that are like, "this is preventative." so how many corporate orders did you get? we have no corporate orders, just inquiries. oh, you've heard from them. something we want to target.
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okay. well, these guys like to talk about what's wrong. let's talk about what's right. let's do. thank you. i'd love to do that. okay. let's get into some real details here. okay. you've done $330,000 in sales. you've said your net margins are 40%. so you're making $132,000, basically. so you guys-- you're splitting it and you're putting it in your pockets? yeah. pretty much, so far. i mean-- what are your real jobs? are they anything to do with posture? i-i'm a--i'm a sales director for an art handling company, so we--you know... and i own a little videography company where i do corporate training films. why did you not reinvest that $132,000 into the business since you already have other jobs? well, to be honest, this was kind of more of a hobby. and so now we're starting to realize this could be really, really big. it's a hobby. you're pulling out some cash. but, you know, if i put money in, i wanna know you're gonna do it full-time. i want to be the first guy to quit his job on--on national television. (laughter) you have tantalized me with the idea that there is a market for this. i think it's sort of semi-interesting.
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i'd give you 100k. i want 50%. i also want-- not gonna happen. (daymond) whoa. not gonna happen. you haven't heard my offer yet. whoa! it gets better, my friend. i--well, i've heard enough. i've heard enough. it gets better. it gets better. let's--okay. i'll hear you out, kevin. always listen, all right? $100,000 just doesn't fall out of the ceilings. understood. all right. i'll give you $100,000. i want 50%. i want a star attached, that comes out of your hide. all right? okay. and i want a 10% royalty on every unit sold. if you own half the business, why would you want a royalty? i have to get some cash flow back. how do i get my money back? how does it come back? no. i would not do that. whoo! whoo! let's give him a round of applause. i just wouldn't do it. no way. so--so far i'm the only guy that offered you anything. but it's just too much equity. and i think you know that. well, what do you think is a fair amount of equity? uh, the offer i made--15%. no, that's insane. that's what i think's fair. this is not worth $600,000 right now. why not? because you haven't proven it yet... we've proven it two years! as a business. it's sold $300,000! you haven't proven anything.
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yeah. you put $5,000 into it. patent pe-- we took $5,000 and turned that into $330-- $5,000, patent pending, and it's worth $700,000 now? that's--absolutely. well, then you don't need the money. you shouldn't be here then. this stage is for people who need money and need deals. and every time you get up here, you take that opportunity away from somebody who really needs it, who appreciates the offer of $100,000. you know what? i-i'm--i'm not begging for anything. i'm offering something. oh. ooh. ♪ [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪
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♪ mike and matt have rejected an offer from kevin. and mike has likely blown his chances with daymond due his arrogance. i'm--i'm not begging for anything, i'm offering something. oh. ooh. and--and i'm offering it to you guys. do you wanna do something with it? no. i'm out. feel better? you feel better, d.j.? i do. wow. okay, good. 'cause they just took-- they just took the opportunity of somebody who really needs this... calm down, daymond. no. no. you--then write him a check, barbara. ay, ay-- you gonna write him a check? daymond, i think i was being passionate, i think you were being passionate. i'd like you to reconsider. just--just reason it out here. here--here's why i cannot reconsider.
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okay. honestly. okay. i'm gonna tell you the truth. okay. i know the product. i like it. i wore it before. okay. you did? yeah. i was fascinated with it. i was staying in the back, as i usually do. and then i ran my mouth. yes. (laughs) so please-- but i'm gonna tell you the honest truth-- i would have had the same exact offer without the royalty. i'm gonna stay out. okay. fair enough. i don't know what he's seeing wrong in you. i mean, i've never met an entrepreneur who wasn't as spunky as this guy. but you got up on the wrong side of the bed today. well, i-- what is this, "kumbaya"? it's a business! the way he treated you.ze for d, that--i-i-- who cares? talk business! barbara, you gonna give him an offer or not? or just keep preaching? there's a lot i like about this. what i don't like is i think your price is way out of line. 39 bucks? i think it should be under $20. it could absolutely be done. but i have to say that i am not as convinced as you are that its application is as broad as you're suggesting. and you were a little weak in your presentation on who's gonna buy it.
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so for those reasons, i'm out. wow. thanks. that stings. (laughs) yep. what you're asking for is just nuts. uh, i'll give you $100,000 for 40%. no royalty. okay. that's my offer. mark, we haven't heard from you yet. well-- whoa! what am i, chopped liver? exactly. i-i-- "thanks for your offer, but, mark, what do you think?" matt, there's a reason you don't talk! (laughter) robert, thank you for the offer, and we'd like to consider it. are there any other offers? they are working the room. you know what? i'm gonna pull my offer. because it seems like you're trying to work me... (exhales) so i'm gonna work you. but you know what? that's a good thing. let him go. it's that simple. here's where i'm at-- absolutely. in fact-- absolutely. we actually-- sometimes it pays to listen.
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isn't this wonderful? all roads come back to me. no, actually, the undertaker-- we already know what's happening with you. i understand on the equity. because there's 2 of you, 50% partners, and if you give up 40%, it just doesn't feel right. so 35% for matt, 35% for, uh, mike, and 30% for mark. but because there's an evolutionary life, um, scale for the product, i do want a royalty. ouch. of $5 per unit, only until i get my money back. then it ends, with the expectation you-- mike, you have to quit your job. okay. you have to tell me now. i'm not gonna get into a bidding war. how do you feel? i feel great. we're in! and i quit my job! let's do this! i quit my job! i don't have to go to work on tuesday! (barbara) sorry! (laughs) thanks, mark. appreciate it so much. thanks, mark. appreciate it.
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you are two smart guys. (anna) bye! (jonathan) take care. (barbara) bye, mike! (mike laughs) i didn't think they were gonna go for the royalty. i didn't think so, either. i like you on that one. i like that. so may i have a little celebratory dance? yes. all right. yeah. if you don't mind, jonathan? go for it. (laughter) you deserve it today. and, jonathan, i'm not gonna ask you to dance. that's all right. (laughing) i really don't know how to dance. ♪
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. >> abc2 news at 11:00. trafficking of a minor. we learn more. >> boundary lines. always a good battle, but what a meeting tonight. abc2 news at 11:00 starts now. thank you for watching. an all too similar story. a man charged with trafficking of a minor. >> how we can keep our kids safe. >> reporter: it is often a man connected to achild. rodney hubert is facing federal charges. the roots don't run too deep.
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this parkville neighborhood had police here for a different reason. >> i thought you were coming for me. why would i be coming for you? >> i have 158 girls on a website. >> reporter: the man claims he lived with hubert in a transitional house. >> females that looked young to me. >> reporter: they were young. he was known as noah and had a girl work for him as a prostitute. $400 to pose in provocative photos. he recruited a driver and security guard and had advertisements for two girls.
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the community needs to recognize sex trafficking victims. >> he was acting as her boyfriend. >> reporter: 50 people from the community gathered. hubert is arrested on state charged and on a 2010 trafficking case in montgomery county. >> it is not good. they are kids. bring them up not bring them down. >> reporter: he faces a minimum of 10 years in prison. we have tips on how to recognize the sign and why maryland is a target for
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trafficking. we want to take you to the quiet streets of glen burnie. neighbors are talking about this, a man tried to grab a girl. >> she wants people to be aware of the situation. she will be cutting back hours to pick up her daughter from the bu stop. a man took an 8-year-old girl out of her bed room in colorado. he cut through a window screen
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and snatched her. police say she screamed for her father. the 8-year-old put up a real fight. he had blond hair and a black coat. her father says he got away in a silver or gray bmw. >> the outcome may have been different if it wasn't for the struggle and noise she put up. >> there is a reward for information leading to a an arrest. another accident involving don dwyer. it happened around 10:30 this morning. he was sentenced to 50 days in jail in a crash that injured 7

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