Investor:Kevin O'LearyShark Tank Appearance:November 15, 2013; Beyond the Reservoir , February 4, 2016 Offer:$50,000 for a 6% royalty until he makes $150,000 and 2 ½% equity Results:Sales went from $18,000 to $3 million.
Donna and Rosy Khalife got the surprise of their lives on February 4, 2016.
It's been over two years since the sisters appeared on Shark Aquarium , the Emmy-winning ABC commercial reality series, seeking $110,000 in exchange for 10% equity in their start-up, Surprise Ride, an activity kit subscription service for kids. Robert Herjavec was willing to pocket the money, but he wanted 25% ownership – terms which he said were non-negotiable. The sisters questioned the other sharks for their interest. There was none.
When they returned to Herjavec, now ready to agree to his terms, he was out. They got out of the float, taunted by Kevin O'Leary. "You are going to be a legend," he told them. "You walked into the Shark Tank, you had a deal and you didn't close it. ”
After spending over 1000 hours preparing for the show, preparing for every possible question a shark might ask, the sisters say they were happy the sharks liked their product but disappointed when they left.
“It was a once-in-a-lifetime opportunity,” says Donna. "We were in the tank for an hour and a half, and when it was all over, not only did we end up with no deal, we didn't even know if our segment would air after all the hard work. »
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Yet the sisters were determined. Their family had emigrated from Lebanon to the United States as war refugees, and they were not going to give up the American dream.
Their presentation was broadcast, gaining exposure that helped them exceed their goal of $500,000 in sales in 2014. The following year, they broke the $1 million mark.
Despite his heckling, Mr. Wonderful was careful. "I've always been interested in Surprise Ride," says O'Leary, adding that he didn't have a problem with the product or the contractors, but rather the valuation. “I had been watching them since their debut in the Tank. The numbers don't lie and when I saw them I knew I wanted to get on board. He says he believes their tripping Shark Aquarium only gave them a stronger foundation as resilient entrepreneurs.
“Failure and disappointment are two of the most valuable resources for any entrepreneur,” says O’Leary. “An investor’s refusal leaves you with no choice but to take charge of your business and your future. Some entrepreneurs may use rejection as an excuse to give up, but top performers will embrace the lesson they have been taught and use their failure as motivation to climb to the top. »
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When the sisters agreed to be filmed for a February 2016Beyond the Reservoir update, they didn't know O'Leary would call and ask if he could drop by their office in Washington, D.C. "We didn't have time to go through anything," Donna said. "I had flashbacks to being in the Tank, and we weren't going to waste that chance. When O'Leary made them an admittedly painful take-it-or-leave-it offer, they said yes.
They're glad they did. When O'Leary came on board, Donna and Rosy presented offers from several retailers to bring their kits to stores. “Like any entrepreneur, we wanted to make the most of the opportunities that came our way,” says Rosy. “We were excited and ready to move forward with a number of retailers. But Kevin advised us to start small and go big without getting ahead of ourselves. We were so surprised to hear that from Kevin; we thought if anyone was going to tell us to go all in, it would be him. »
“Failure and disappointment are two of the most useful resources for any entrepreneur.”
Under O'Leary's guidance, Donna and Rosy decided to take O'Leary's advice and chose to launch their retail collection with Michaels, the craft chain. “We had grown up going to Michaels,” Donna says, “so we knew they shared our vision of getting kids away from their screens and gadgets and engaging with the real world. »
Four years after leaving the Shark Aquarium Feeling demoralized, Donna and Rosy now have advice for fellow entrepreneurs reaching out to potential investors:Don't take rejection personally. “Every time an investor turned us down, it was a big blow to our belief in the company,” says Donna. “It would make us wonder if we were good enough to succeed. But what we've learned is that investors' decisions often have nothing to do with you or your idea. Maybe an investor doesn't make trades of your size, or he or she doesn't know your industry.
O’Leary, who made his fortune in educational software, thinks Surprise Ride is tapping into a huge market. “The Khalife sisters are powerhouses and their business model is awesome,” he says. “I expect Surprise Ride sales to reach tens of millions over the next few years. »
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This article originally appeared in the February 2018 issue of SUCCESS magazine.
