A Lying of Credit


Spencer Quinn and Eric Child introduced their strong-as-steel repair tape to the Sharks, asking them to invest $90,000 for a 10% stake in the company. Well, at least this was their offer until they realized how badly they underestimated their own valuation.

After a fairly lame pitch consisting of lots of infomercial-grade shouting, multiple product demonstrations, and poor drama, the FiberFix guys faced a tough decision as they considered the three offers on the table: Robert's of $90,000 for 10%- just as they asked for, Lori's of $250,000 for 18%, and Kevin's offer of $90,000 for no equity, but for a 70 cent royalty until his money is recouped, at which point it drops to a 20 cent royalty. (Why do Kevin's deals always have to be so complicated?).

After seeing his fellow Sharks competing with him, Robert added a $250,000 line of credit to his offer. At this point, Lori Greiner stated that any of the Sharks can do this, and belittled this extra piece of value in Robert's offer, saying it would be no big deal for her to do. Then, Quinn and Child went outside to discuss what's best for them, and also face the fact that they messed up on their valuation. They then came back into the Tank with a counteroffer directed at specifically at Lori, asking her to extend them a $2 million line of credit in addition to $120,000 for a 12% stake. This ridiculous counteroffer got all of the Sharks reacting with shrugs, eye-rolls, and "Really's?", as Mark reprimanded them telling them that they were blowing it for themselves.

While most of us probably imitated the Sharks' reactions to this stupid counteroffer, many of us found our eyes rolling once more when Lori refused to make any deal that included a line of credit. She accepted the counter of $120,000 for 12% and said that she would fund future orders, but would not consider extending
any line of credit whatsoever. Gee, isn't that odd. Two minutes earlier The Queen of QVC downplayed Robert's offer saying that any Shark can provide it, and next thing we know she is completely unwilling to include one in her own deal.

Why would she contradict herself? Lori clearly knew that Robert was on the verge of getting the deal because his offer was the first and it was for the exact amount they had asked for. Therefore, before selling herself as a partner, she had to lower Robert's offer in their eyes to boost herself up and make her look like the best deal on the floor.

In the competitive world, there are, of course, winners and losers. But within the winner category, there are two subsets: Those who win by doing the best they can and doing greater than all those around them, and those who win by pushing their competitors down so that they can't succeed. In other words, there are winners and there are bullies. This is true in academics, this is true in sports, and this is certainly true in business. It may be true that both types of winners come out on top, the difference though, lies in how they got there. And while both types of winners land the spotlight of glory, only one truly deserves the accolade that goes along with it. In this pitch, Lori achieved first place. In this pitch, Lori got the spotlight for making the deal. But in this pitch, Lori was a Type B Winner. In this pitch, Lori was a bully.
Jeff Hopkins8 Comments