"Very much at risk"- When Shark Tank star Mark Cuban shared thoughts on Glow Recipe's inventory

Sarah Lee and Christine Chang, co-founders of Glow Recipe, appeared on Shark Tank season 7 episode 10, aired on December 4, 2015. They sought $425,000 in exchange for 10% equity in their business, aiming to bring Korean beauty trends to the United States. During their pitch, Mark Cuban raised concerns about their inventory, saying,

“If new products are coming out all the time, your inventory is very much at risk.”

Glow Recipe, a curated e-retailer for Korean skincare, pitched its potential as a thought leader in the U.S. K-beauty space. The founders highlighted their expertise and innovation, aiming to educate and expand awareness through platforms like YouTube while sourcing products from Korea. However, the Sharks had pointed questions about their business model, sales, and competition.

---

Glow Recipe’s Shark Tank pitch recap

Sarah Lee and Christine Chang started their Shark Tank presentation by introducing themselves and their mission to make Korean beauty accessible in the U.S. During their pitch, Sarah stated:

"Glow Recipe is here today to make every American woman's skin glow and make everyone look beautiful by bringing only the best products and skin secrets from the modern epicenter of advanced skin innovation, Korea.”

Christine noted that over the past year, leading U.S. beauty editors and media outlets have declared that Korean beauty is 12 years ahead of the rest of the world. They described Glow Recipe as both an e-commerce platform and a brand incubator, curating top-tier Korean products and introducing them to U.S. consumers. Kevin O’Leary, however, questioned their role, saying,

“You don't make these products. You source them in Korea and you bring them to the United States.”

During the Shark Tank episode, Sarah explained that their business operates in two verticals: one being an e-commerce site curating natural beauty skincare products from Korea and the other serving as a brand incubator. When asked about sales, Sarah disclosed,

“Last year, we opened Glow Recipe in November. For the first two months, our revenue was $3,000. 2015, year-to-date, we're at $550,000. We're projected to do $1 million by the end of this year.”

Half of these sales came from their e-commerce site, while the other half stemmed from their brand incubation model, where they shared revenue with product creators. The investors raised several concerns about competition and scalability. Kevin pointed out:

“If Korea is so much innovation, why wouldn’t large retailers that make billions of dollars in sales in cosmetics not have those in their stores?”

Sarah explained that Sephora and Target carry a few brands but are new in the market. Mark Cuban focused on inventory, noting the risk of rapid turnover in the beauty industry. Christine assured the Sharks,

“We don't have any slow-moving goods right now. Everything is cycling through so fast.”

Mark remained skeptical, responding, “Until the next one comes, right?” Christine emphasized their role as thought and trend leaders regarding K-beauty in the U.S.

---

The offers and final deal in Shark Tank

The pitch led to a mixed response from the Sharks. Barbara Corcoran noted discrepancies in their financial projections but offered $425,000 for 40% equity. Kevin O’Leary was more aggressive, proposing $425,000 for 50%, while Robert Herjavec offered $425,000 for 30%, stating, “I’m investing in you, not just the business.” Lori Greiner opted out, citing the competitive market.

Mark Cuban ultimately decided to pass, saying, “I don’t know what I don’t know.” Kevin questioned Sarah and Christine about their willingness to negotiate, prompting them to counter Robert’s offer at 18% equity. Robert countered with 25%, which the co-founders accepted after a brief negotiation in Shark Tank.

In the end, Glow Recipe secured a deal with Robert Herjavec for $425,000 in exchange for 25% of their company.

---

Shark Tank airs every Friday at 8/7c on ABC.