"You don't have that one thing" - When Shark Tank investor Mark Cuban rejected Sparketh

In Shark Tank season 13 episode 4, Dwayne Walker and Tim Samuel pitched Sparketh, seeking $100,000 for 8% equity at a $1.25 million valuation. Their online art education platform showed $300,000 in sales in 2020, with $500,000 projected for 2021.

After demonstrating their teaching methods through an interactive painting session, the founders revealed customer acquisition costs of $51.50 and lifetime value of $160.

When asked about profitability, they stated they "could be profitable if we wanted to." This prompted Shark Tank investor Mark Cuban to address the fundamental issue.

"Guys look, I see where you're going with this. The real challenge I see in this as a business, you don't have that one thing to hang your hat on. You need something that says this is why we are different, this is what makes us unique. Why am I going to do this instead of just watching free YouTube videos?"

He continued,

"You don't have that one marketing thing for you guys that's an accelerant, and that's unfortunate, so for those reasons I'm out."

While three other Shark Tank investors declined, Barbara Corcoran and Daniel Lubetzky offered $100,000 for 20% equity with specific profitability requirements.

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Shark Tank investor Mark Cuban rejects Sparketh over competition

Walker and Samuel's partnership started in Atlanta, where they shared a vision of making art education available to young learners. In 2015, they left college to focus on building Sparketh.

Samuel spoke about his experience with sickle cell disease, explaining how this medical condition motivated him to create impact despite a shortened life expectancy.

The founders built their initial customer base by attending homeschool conventions and education events across the country. Shark Tank company founders structured their platform to serve both individual students and families seeking comprehensive art education solutions.

The Sparketh platform offered students access to an extensive library of art instruction videos. Their course catalog included training in multiple artistic styles, catering to varying skill levels from complete beginners to advanced practitioners.

Students could follow structured learning paths through different art forms. The curriculum covered fundamentals like color theory and perspective drawing, expanding into specialized topics such as portrait creation and landscape composition.

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Sharks' reactions

During the Shark Tank discussions, each Shark shared distinct concerns about Sparketh's model. Lori Greiner praised the teaching concept but withdrew, stating her limited expertise in app-based businesses made her unsuitable as an investor.

Kevin O'Leary questioned the high valuation given the company's break-even status.

Mark Cuban focused on market positioning, emphasizing how Sparketh needed stronger differentiation from free online art tutorials to justify subscription fees.

Barbara Corcoran spotted potential despite profitability concerns. She structured an offer of $100,000 for 20% equity, adding a requirement for the company to achieve profitability within six months.

Daniel Lubetzky, moved by Samuel's personal story and determination, joined Corcoran's offer.

He added value through a mentorship commitment while maintaining the same equity terms. The combined expertise of both Sharks led Walker and Samuel to accept the modified deal.

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Post Shark Tank development

Following their appearance, Sparketh expanded its course library while keeping its core subscription model intact, per Shark Tank Blog.

By April 2023, Sparketh's annual revenue reached $2 million, showing significant improvement from the numbers they presented on Shark Tank.

Their Instagram community grew to 18,000 followers, indicating strong social media engagement.

The company enhanced its service offerings with additional course tracks and teaching material. They maintained their original pricing structure, offering monthly subscriptions at $25 and annual memberships at $250.

The platform continued providing a free 30-day trial to new users, allowing full access to their course library during the trial period.

Days after the episode aired, Sparketh released a statement confirming progress in their deal with Corcoran and Lubetzky.

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