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Shark Tank season 5 episode 10, which aired on November 15, 2013, featured a business that generated monthly revenue through educational activity boxes for children. During a $110,000 investment pitch, sisters Donna and Rosy Khalife sought funding for their educational subscription box company Surprise Ride.
Robert Herjavec became the first shark to make an offer, proposing $110,000 for 25% equity. The sisters then asked other sharks for competing offers. This decision backfired when Herjavec retracted his proposal with strong words:
"This was why my offer was so high. You don't live in the real world, you live in the world of theory ladies. This isn't Kansas anymore. I made you a generous offer for you and for me because I can help you…You need guidance along the way. I'm out. Gave me time to change my mind"
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The sisters eventually left the tank without any deal at the end.
Robert Herjavec withdrew from Surprise Ride deal on Shark Tank season 5
The Khalife sisters came prepared with strong credentials and clear numbers. Donna brought her Harvard MBA knowledge while Rosy contributed digital marketing skills to their subscription service. Each month, customers received boxes filled with educational activities aimed at children ages 6-11. The themed packages contained craft supplies, detailed project guides, educational materials, and additional items like books and snacks.
Their Shark Tank presentation outlined plans to use $40,000 to reach millions of mothers through focused marketing campaigns. An additional $60,000 would go toward converting web visitors into subscribers. The company operated through a Florida fulfillment center ready to handle increased orders.
The sisters shared detailed operational metrics. Their monthly subscription model showed consistent revenue from 220 active members. The customer acquisition cost remained at $5.30 while keeping profit margins at 50%.
Each box featured themes ranging from science experiments to art projects, with topics like light refraction and color theory. The fulfillment partner managed inventory, packing, and shipping logistics.
Negotiation turn
Robert Herjavec analyzed the business model and expressed concerns about the marketing budget allocation. He offered $110,000 for 25% ownership. Instead of direct negotiations with Herjavec, the sisters asked other Shark Tank investors to make competing offers. This approach shifted the tone of discussions.
Lori Greiner responded firmly to the sisters' request. She stated her belief in their ability to succeed independently, citing her own business path. Mark Cuban criticized their marketing budget plans. The sisters turned back to Herjavec, proposing 20% equity instead of his requested 25%. By this point, Herjavec had changed his stance.
Daymond John stepped away first due to concerns about the company's valuation. Kevin O'Leary followed, stating the business would need millions more in funding. Cuban pointed out issues with their web traffic monetization strategy.
When Herjavec withdrew his offer, he emphasized the gap between the sisters' business planning and market realities. O'Leary made a final observation about their missed opportunity, noting how they had secured then lost a potential deal.
Post Shark Tank performance
Despite leaving without a shark partner, Surprise Ride's business grew after the episode aired. As per Shark Tank Blog, their customer base expanded significantly, meeting their projected first-year goals ahead of schedule.
In 2016, Kevin O'Leary returned with a modified proposal. He offered $50,000 in exchange for a 6% royalty until reaching $150,000, plus 2.5% equity in the company. The sisters accepted this deal.
Kevin O'Leary's involvement helped Surprise Ride secure retail placement in Michael's craft stores. The company maintained its subscription model while expanding into retail channels. In 2018, Fat Brain Toys acquired Surprise Ride, marking a successful exit for the Khalife sisters.
The subscription service continued operating under new ownership, maintaining its focus on educational children's activities.
Catch new episodes of Shark Tank on ABC network.
