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In a February 5 podcast with Lewis Howes, Shark Tank investor Robert Herjavec revealed details about a crucial moment during AT&T's acquisition of BRAK Systems in 2000. The deal valued at $32 million faced significant hurdles when AT&T's external auditors discovered operational issues during due diligence.
AT&T called a meeting to discuss problems about the company's systems and ticketing processes. During this meeting, after the audit team presented their findings, Herjavec recalled the tense moments.
"I'm thinking, 'Oh my God, I'm not going to get the $32 million.' So I'm scrambling and I'm like, 'Hey, did you ask those customers if they would buy from me again?' And they're like, 'Yeah, we did.' So they flipped to the last page and they said, '97% of your customers said they would buy from you again despite all of these things,'” he said.
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The Shark Tank investor continued:
“And I said, 'Did you ask them why?' And they said, 'Yes,' and they said two reasons: One, you made them happy, and two, they believed if they had an issue, you would take care of them."
In the end, the deal was closed, and Robert successfully got the exit.
Shark Tank star Herjavec's career explored
Shark Tank star Robert Herjavec arrived in Halifax, Canada, from Zbjeg, Croatia, in 1970. His family left Yugoslavia after his father faced problems with the communist regime. They landed with a single suitcase and $20. The family stayed in a basement in Toronto for 18 months after arrival.
The early years in Canada presented financial challenges. Herjavec worked various jobs to support himself. He delivered newspapers and waited tables in the early 1990s.
His previous role at LogiQuest, where he initially worked for free to gain experience, provided insights into the technology sector. Following this, he started BRAK Systems. Through the 1990s, BRAK Systems steadily expanded its presence in the growing Internet security market.
As BRAK Systems captured a larger market share, it attracted attention from major industry players, leading to AT&T's interest and subsequent acquisition offer of $30.2 million CAD.
BRAK Systems began with basic Internet security solutions in the early 1990s. The company quickly gained momentum in the Canadian market by implementing a focused recruitment strategy.
Herjavec brought in skilled professionals from competing firms, building a team of security experts. The staff count grew from three initial employees to a substantial workforce. The company maintained high employee retention through its work culture.
The rapid market expansion caught AT&T's attention in 1999. BRAK Systems had secured major contracts with leading Canadian businesses, strengthening its market position. The company developed specialized security protocols that set industry standards. Their client base expanded across different business sectors, making BRAK Systems a dominant force in Canadian cybersecurity.
Post acquisition developments
After successfully completing the AT&T deal, Shark Tank investor moved forward with new ventures. He accepted a vice president position at RAMP Networks, bringing his security expertise to a different market segment. The experience at RAMP Networks proved valuable when Nokia acquired the company for $225 million shortly after.
In 2000, following the RAMP Networks sale, Herjavec stepped away from the business world temporarily. He spent three years focusing on family life as a stay-at-home parent. The break gave him time to reflect on his business achievements and plan his next moves. The success of BRAK Systems laid the foundation for Herjavec's future business ventures.
In 2003, he returned to the cybersecurity sector by founding The Herjavec Group with three colleagues and $20,000 in initial capital. The company brought fresh perspectives to IT protection services.
By 2013, The Herjavec Group reached $500 million in revenue, validating Herjavec's business strategies. The company expanded beyond Canada, establishing offices in the United States and the United Kingdom. Presently, Robert Herjavec is serving as an investor in Shark Tank season 16.
Shark Tank season 16 is airing on ABC network.
