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Mark Cuban rejected Ride FRSH for ‘dumbest marketing move’

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Investors often reject startups for sloppy pitches or unprofitable business models.

On Friday’s episode of ABC’s “Shark Tank,” billionaire Mark Cuban left a deal in lower than two on-screen minutes for a distinct reason: the “dumbest marketing move ever.”

The corporate in query, a Los Angeles-based automotive air freshener company called Ride FRSH, was on target to make greater than $750,000 in annual revenue on the time of filming, brothers and co-founders Donovan and Trey Brown said.

But they made their fatal error early: They gave Cuban, the owner of the NBA’s Dallas Mavericks, an air freshener with the Golden State Warriors’ logo on it.

“You bought to read your room,” Cuban said, throwing down the air freshener. “Mistaken move, mistaken time.”

Cuban remained quiet for the remainder of the negotiations, stewing over the loss his Mavericks took to the Warriors within the 2022 NBA playoffs earlier this yr. Luckily for the Browns, the opposite Sharks were interested.

Ride FRSH had made $1.1 million in revenue in three years since launching, due largely to its subscription model. On the time of filming, the founders also said they were in negotiations with AutoZone, amongst other large retailers.

If the deal were to undergo, AutoZone would buy $2.1 million value of Ride FRSH air fresheners to distribute at 2,000 of their locations, the Browns said.

They asked investors for $200,000 for five% of their company.

Lori Greiner quickly withdrew, saying the corporate skewed toward men since the products had traditionally masculine scents and shapes. Robert Herjavec left too, saying the corporate’s product reminded him an excessive amount of of a protracted, miserable family road trip.

Kevin O’Leary said the Brown brothers valued their company too high, given their sales record. Their investment request valued Ride FRSH at $4 million, however the startup only brought in $540,000 in 2021 revenue, O’Leary noted.

The last remaining Shark, Barbara Corcoran, wasn’t initially impressed either. She congratulated the pair on their high sales, but said going into retail was a mistake since the brand was already growing independently.

The brothers responded that the retail plan was specifically to assist offset rising customer acquisition costs. That got Corcoran to reconsider.

She offered $200,000 for 25% of Ride FRSH, contingent on their pending partnerships becoming official. After some negotiation, the 2 sides agreed on 20% of equity as an alternative, and the Browns left the show with a deal.

On their way out, they apologized to Cuban.

Cuban smiled and told them, “It’s all good.”

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”

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