When the two co-founders made their pitch, SoleMates had been in business for five years already, with a valuation of $5 million and on track to earn as much as $1.5 million in revenue in 2016. They’d raised $1 million in investment so far and were asking for $500,000 more in exchange for 10% equity. They also offered the investors an opportunity to try out their product, even bringing out high heels the men could wear with the SoleMates protectors.
After everyone had a laugh, the Sharks began asking serious questions. Lori Greiner didn’t think the high-heel protectors were something people needed badly. “What about those who don’t wear high heels?” she asked before passing on investing. The numbers didn’t add up for Mark Cuban, either. He declined the deal, saying he couldn’t imagine SoleMates making $50 million so he could recoup his investment. Daymond John agreed, adding that making profits for any investor would already be out of the question.
Robert Herjavec saw potential in SoleMates, though, and believed the company was creating a new category in the market. With the resources needed to expand, he presented $500,000 for a 25% stake, saying, “You get a partner … to help you scale this company to a substantial size.” Kevin O’Leary offered $100,000 in investment for 10% equity plus a $400,000 loan, but Ferguson got to bargain Herjavec’s possible equity down to 20%. SoleMates walked away with him as an investor.
