“Your CFO gave you bad advice”—When Shark Tank panelist Daymond John made a deal with Bombas

While Shark Tank season 16 is ongoing, fans of the show are reflecting back at the successful deals that were made in the past. Bombas is one of those brands. Founded by David Heath and Randy Goldberg, Bombas appeared in season 6, episode 1, which was released on September 26, 2014.

David and Randy came in asking for $200,000 for 5% equity claiming that their socks didn't only last longer than other socks, but also came in innovative designs. After all the sharks were out, Daymond remained. He agreed to give them the $200,000 for 20% equity in their company. David and Randy countered it saying they'd give him 15% equity, while Daymond asked for 17.5% equity.

When the two of them asked if they could call their CFO for suggestion, Daymond said:

"Your CFO gave you the bad advice already to ask for that valuation."

Daymond John further said that he didn't want to talk to anyone else, but them, because they were the founders of the company. David and Randy accepted Daymond's offer. According to Entrepreneur magazine's report published on October 30, 2023, Bombas achieved $1.3 billlion in lifetime sales till 2023, making them one of the most successful companies in the show's history.

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How Daymond dealt with Bombas in Shark Tank season 9 episode 1?

After David and Randy explained their product while showcasing them and made an offer, the Sharks started asking them questions about the sales figures. They appeared on the show after nine months of launching their company Bombas and their sales had reached $450,000 at the time.

The founders added that their estimated sales for the year would be around $1.1 million. They mentioned that their sales for the next year was estimated to be around $2.7 million, and a year after, it would likely be $4.9 million.

However, they said their current sales had plateaued, which was the point of concern on Shark Tank. They duo stated that since their growth was slightly stagnant, they had been looking for fund-raising for the last two months and were able to gather $900,000.

Shark Tank panelist Kevin O'Leary said that they didn't have a market share yet, and they were only selling online so they didn't have retail exposure. He said asking money for that valuation was "ridiculous" and added that he was out. He added:

"If any of these Sharks give you money at that valuation I will forbid it, it's ridiculous."

Robert Harjavec stated that their sales were great but he wasn't confident about socks being a standalone product because he categorized them to be supplementary. That's why he was out of the Shark Tank deal.

Lori Greiner said she didn't wish to hear that they were going to use the money to hire new people, so she was out too. Mark Cuban commented that he didn't feel like there was enough margin in their product, so he was out too.

Daymond was the only panelist who was in for the deal and as Kevin said, the former was known for his inclination towards businesses selling fashion products. Daymond said that he was ready to give them an offer at $1 million valuation, which was 20% equity for their ask of $200,000.

David and Randy said they had problems with the inventory and that's why the valuation Daymond gave wasn't acceptable. Daymond responded that he would take care of the inventory as well with that valuation.

However, David and Randy countered his offer right back and said they would give 15% stake for $200,000 and and extra $200,000 as a line of credit. Daymond said he was already taking care of the inventory, so he refused to give them an extra $200,000 as credit. Instead, he agreed to take $17.5% equity for the same money. After a little discussion among each other, David and Randy decided to take the deal.

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