"You're making a big mistake" — When Shark Tank investor Kevin O'Leary's offer got rejected by Neuro's founders

Kent Yoshimura and Ryan Chen appeared on Shark Tank season 11, episode 19, which aired on April 10, 2020. The business owners sought $750,000 in exchange for 5% of their company, Neuro, which specializes in nootropic energy gums and mints. Kevin O'Leary offered $750,000 for 5% equity alongside a $0.50 royalty per unit sold until he recouped $1 million.

Ryan and Kent, unwilling to accept an equity-royalty combined deal, turned down Kevin's offer and left the Tank empty-handed.

"You're making a big mistake, my friend," Kevin reacted.

Robert Herjavec was the only other investor who had presented the entrepreneurs with an offer. However, Ryan and Kent rejected his offer as well, dissatisfied with the valuation offered. They believed the $15 million valuation that they came with was fair.

Despite leaving Shark Tank without an offer, Neuro continues to grow as a business. According to its press release dated June 21, 2023, the company sold over 50 million pieces of gum in the same year. Neuro made its way onto the shelves of over 10,000 retail locations, including CVS, Whole Foods, Target, Walmart, and more. The company was valued at $50 million in 2024 and had a reported annual revenue of $10 million.

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"Not a category that I feel I can connect to enough" — Shark Tank guest investor Daniel Lubetzky rejects Neuro

Neuro specializes in energy mints and gums made of natural caffeine, L-theanine, and B6 and B12 vitamins using a patented cold-compressed method. They are also sugar-free and without any GMO besides being a vegan supplement. On the show, the Sharks tasted the product and the business owners informed them it usually takes 5-10 minutes to activate.

After being in business for four years, they garnered $3.5 million in sales in the year of filming. The entrepreneurs also mentioned that they did $1.5 million in sales the year before. Ryan stated they spent the first three and a half years focusing on selling online (Neuro's official website and Amazon) and saw that 33% of the customers on their website re-purchased the product in the last 12 months.

"So the people who try our product really love it," he said.

He informed the Shark Tank panelists about their recent venture into 5000 retail stores and added it was where they needed the Sharks' expertise. Lori was impressed to hear that Neuro was the number two best-selling product in memory and focus in CVS with sales close to half a million dollars.

Ryan then stated that the gums and mints retailed for $3.95 to $3.99, whereas it took only $0.67 to manufacture them. The Neuro founders claimed they could make up to $10 million the following year since they had two POS lined up with Delta and JetBlue airlines.

Shark Tank guest panelist Daniel worried about the company's growth, saying they could go out of business if the airlines did not re-order. Therefore, he urged them to beware of their growth rate and removed himself from consideration, saying:

"It's just not a category that I feel I can connect to enough. I'm out."

When Kevin asked the founders what they planned to do with the money, Kent responded that they wanted to use it for marketing efforts in retail. The Shark Tank investor disapproved of their plan and urged them to re-center their focus on the proven online model. Ryan explained that they wanted to make Neuro a "national brand," which was why they wanted to expand into retail.

The entrepreneurs then mentioned that they sampled their products at various shows to connect with people. Hearing that, Shark Tank expert Mark Cuban told the business owners that they put themselves at risk when they sampled.

Since their claims of clarity and focus would never impact two people the same way, he felt it was a bad move to test their supplements. As a result, he bowed out of the discussion. Likewise, Lori refused to invest in their company because she was unsure.

Despite the concerns, Robert offered $1 million in exchange for 20% of their company. Kevin followed suit, although he thought their valuation was "stinky poo poo." He presented them with an equity-royalty combined deal.

The Neuro founders countered Robert, asking him if he could offer them a $10 million valuation by lowering his equity to 10%. Robert said the lowest he could do was 14% which reduced their valuation to $7 million. Ryan and Kent declined the offer, saying it would be unfair for the other investors. After much deliberation, they also turned down Kevin's offer and left empty-handed.

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Shark Tank season 16 airs every Friday at 8 pm ET exclusively on ABC.