"Only way I see for this to work" — When Shark Tank's Kevin O'Leary gave an offer with "giant contingency" to Pinblock

In episode 13 of Shark Tank season 8, Vladislav Smolyanskyy pitched Pinblock, seeking $100,000 for a 20% stake in his company. Pinblock was a construction toy consisting of uniform flat pieces with pins and holes, allowing connections from multiple angles. This design enabled users to create flexible, pixel-art-style structures.

At the time of the pitch, the company had generated $160,000 in sales through direct-to-consumer channels and Amazon. After Smolyanskyy's demonstration, Kevin O'Leary stepped up with an offer. The Shark Tank investor said:

"I'm going to make you an offer. The only way I see for this to work is that you actually partner with another toy company that's going to get this into their product line…I'll give you the 100k with a giant contingency. I have no interest in investing in this unless I can put it into a very large toy manufacturer that provides marketing and distribution globally."

After some negotiations, the entrepreneur accepted the Shark Tank deal in exchange for 50%.

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Shark Tank investor Kevin O'Leary wanted toy company partnership for Pinblock deal

Pinblock entered Shark Tank with strong business fundamentals. The manufacturing cost per starter pack was $3, with a retail price point of $19.99. This pricing strategy provided healthy margins in the competitive toy market. The founder maintained an 85% ownership stake in the company. A former business associate held the remaining 15% but had stepped away from active involvement.

The Shark Tank company sold its products online, including through its website and Amazon marketplace. The ability to create pixel-art designs added an artistic dimension to the play experience. These features convinced O'Leary to make an offer but with a specific structure in mind. Kevin O'Leary restructured his proposal after seeing Smolyanskyy's reaction to the initial terms.

The revised offer increased to 50% equity while maintaining the $100,000 investment amount. The deal specified that any licensing agreements would need Smolyanskyy's approval, maintaining his input in future partnerships. Barbara Corcoran considered the licensing strategy valid but stated she would not make an offer.

Mark Cuban stepped back from the deal after highlighting the competitive difficulties within the toy market. Robert Herjavec initially showed interest in the licensing approach but ultimately didn't invest. Lori Greiner assessed the timeline challenges specific to toy businesses. She described the path to success as "a long road" and chose not to participate.

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Product background

Pinblock originated from Smolyanskyy's vision to create a more versatile building toy. He first developed the concept in 2014 alongside a childhood friend. After an initial unsuccessful crowdfunding attempt, Smolyanskyy launched a successful Kickstarter campaign in February 2015, raising $18,573 for production. The standard Pinblock package contained 1,000 pieces and retailed for approximately $40.

The company also offered smaller 100-piece color packs priced at around $4. The blocks featured a uniform shape with a distinctive pin-and-hole connection system. This design allowed pieces to connect from multiple angles and even create movable components.

Pinblock offered various color-themed sets and published tutorial videos showing different construction possibilities. The product targeted both children and adults interested in creative building toys. Smolyanskyy secured a patent for the design, which served as a competitive advantage against other construction toys on the market.

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Deal aftermath

As per Shark Tank Blog, despite accepting O'Leary's 50% equity offer on the show, the deal ultimately fell through after filming. O'Leary presented the product to one major manufacturer, but they declined to license PinBlock.

The Shark Tank exposure did boost immediate sales, with Pinblock selling 80% of available inventory shortly after the episode aired. However, the company faced setbacks while developing Pinblock 2.0. The planned June 2017 launch experienced delays due to manufacturing changes and product redesign requirements.

Eventually, Smolyanskyy transitioned to a role at Raindrop Media Management, while Pinblock maintained limited product availability through its website.

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Fans can watch new episodes of Shark Tank on the ABC network.