"Had his own company on the side"- When Shark Tank's Robert Herjavec got scammed by his own sales manager 

Shark Tank investor Robert Herjavec once revealed that he was scammed by his own sales manager.

In an interview with Inc. dated December 16, 2015, Robert shared a story from his first company, where his sales manager secretly funneled deals to a side business.

The manager had created a separate company with a similar name to Robert's, taking orders from Robert's company and fulfilling them through his own business.

"My own sales manager had his own company on the side and he would take an order for us and he started another company with a similar name and it was taking those orders, fulfilling them, and cashing the checks," Robert recalled.

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Shark Tank investor Robert Herjavec couldn't believe he was scammed

In the Inc. magazine interview, Shark Tank star Robert Herjavec described this incident as the "funniest thing" that happened to him in his first company. He called it "funny" because he managed to recover from it.

Robert went on to explain the full story behind the incident. He recalled that everything was "going great" when he started his first company. He had "great employees" and the company was growing.

However, his marketing head, Jennifer, suddenly left her position to take a job at a different company.

"As she’s leaving, we’re kind of having an exit interview... All of a sudden she starts crying. I’m like, 'Oh my gosh, what have I done to her?' 'I just loved working with you so much, you’re such a great boss, but there’s something I have to tell you,'" Herjavec recalled Jennifer telling him.

Before her exit, Jennifer informed Robert about his sales manager, Bob (not his real name). She revealed to the Shark Tank investor that Bob had a company on the side and was "funneling half the deals to his own company."

Robert then recalled that he didn't believe Jennifer at first, telling her that he was "too smart" and would have noticed if anything like that had happened to him. However, he still had doubts and checked if it was true. The Shark Tank investor said:

"I go back to the deals that we have lost and I call one of those customers. I called them up and I say, 'Hi, just curious, why didn’t you guys go with us?' Guy goes, 'I don’t know what you’re talking about, we actually did buy from you.'"

This made Robert realize that his own sales manager had a side company of a similar name and that he was taking orders for the original and fulfilling them in the latter.

This incident turned out to be a valuable lesson for the Shark Tank investor, as he urged his fellow entrepreneurs to be careful from the moment they hire their first employee.

"The minute you hire the first employee, you got to be careful. I’ve had people do horrible things to me in business, people that work for me, competitors, everybody. You’ve got to look out for yourself," he said.

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Robert Herjavec's hiring process

Over the years, after encountering many issues like this, Robert has improved his hiring process and is extra careful of who he lets into his company.

In a LinkedIn post dated September 1, 2015, the Shark Tank investor shared his multiple-round hiring process

He mentioned that he personally interviews the top candidates first and then gathers feedback from various people with diverse backgrounds on his management team. However, in the end, he emphasized that he trusts his instincts when it comes to hiring a new employee.

"Each hire is different but can influence the team so greatly that it’s important to take the time to get it right. Listen to your gut, be consistent in your interview approach so you can compare the candidates and seek the trusted advice of your colleagues to support the decision in the end," he said.

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Shark Tank season 16 episodes air every Friday on ABC.