"Cry me a river" - When Kevin O’Leary lost a deal to Mark Cuban on Shark Tank

A Season 9 episode of Shark Tank captured a pivotal negotiation shift when Kevin O'Leary lost a ProntoBev deal to Mark Cuban. When Alexander Simone pitched his 30-second wine chiller powered by proprietary gel technology, O'Leary demanded 50% equity for $100,000. O'Leary suggested possible future dilution when Simone expressed concerns about maintaining control.

Cuban challenged this proposal, suggesting O'Leary should instead offer $200,000 or $250,000 upfront. When O'Leary defended his position about future investment rounds, Cuban pointed out the entrepreneur would still lose company control. Seeing Mark's consistent support toward the entrepreneur, O'Leary expressed his frustration,

“Cry me a river Mark."

After some discussion, Cuban gave an offer of $100,000 for 25% equity, with a contingency to raise an additional $100,000, which the entrepreneur accepted, and O'Leary lost the deal.

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Kevin O'Leary's "Cry me a river" moment led to a lost Shark Tank deal in 2017

Shark Tank regular investor O'Leary saw potential in ProntoBev despite its early stages. The product had shown promise through an IndieGoGo campaign raising $61,317, with units sold at $89 against a manufacturing cost of $22. The planned retail price stood at $129. O'Leary made his position clear, demanding 50% equity for $100,000, telling Simone,

"You don't know what you don't know and you really need somebody to actually endorse this and help you get it out there."

Simone strongly resisted the high equity demand. He explained to O'Leary that giving away 50% equity would limit future growth opportunities for ProntoBev. The company needed flexibility in equity structure to accommodate additional funding rounds and maintain operational control.

O'Leary remained unmoved by these concerns, maintaining his position that his experience and connections justified the equity stake. He stated,

“I take you out of the wastelands, the darkness, I bring you to the light…You have a high probability of making money versus you walk out the door with without a deal and you are so dead to me. I won't even remember this thing”

The negotiation intensified when Mark Cuban, who had initially declined to invest, suggested O'Leary offer more money to justify the equity stake. O'Leary proposed he might dilute or invest more capital later. This prompted Cuban to point out how such moves would further reduce the entrepreneur's control. O'Leary's "Cry me a river Mark" response marked a crucial turning point in the negotiations of this Shark Tank pitch.

Mark Cuban redirected the negotiations by exploring ProntoBev's future lineup. When Simone mentioned plans for a martini chiller, Cuban probed deeper into funding needs.

Simone disclosed having interested parties ready to invest an additional $100,000. This information shaped Cuban's strategy.

"I'll give you $100,000 for 25%," he proposed, adding one condition. "You must raise another $100,000."

This offer preserved more equity control for the entrepreneur while securing necessary capital. Leaving Kevin's 50% equity demand, Simone went ahead with Cuban's offer.

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Other shark reactions

The Sharks scrutinized ProntoBev's $2 million valuation, considering the company hadn't generated revenue yet. Daymond John immediately questioned the numbers.

"The valuation makes no sense at this stage," John stated, withdrawing from consideration. Robert Herjavec followed suit, mentioning that early-stage companies carried substantial risks.

"You're asking for too much money too early," Herjavec explained before stepping back.

Lori Greiner studied the product carefully and recognized its potential. "Your invention shows promise," she told Simone. However, she expressed doubts about reaching an affordable retail price and decided against investing.

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Aftermath

The aftermath revealed unexpected challenges. As per Shark Tank Blog, despite the televised agreement, the deal with Cuban never materialized. By June 2021, ProntoBev had failed to produce any units for IndieGoGo supporters. The company website displayed only a preorder button, while social media accounts went inactive.

Previous supporters began demanding refunds. A former fraternity brother of Alexander Simone, who had backed ProntoBev through its IndieGoGo campaign, posted on social media platforms calling the entire venture a scam. His criticism stemmed from the fact that despite paying for the product, he never received the wine chiller.

The Shark Tank company's status remained inactive through April 2024, with no products delivered and no way for customers to make purchases.

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Shark Tank's new episodes air on ABC network.