“It’s crazy” — When Shark Tank’s Kevin O’Leary questioned QuikFlip’s valuation

Rener Gracie entered the Shark Tank stage in season 10 episode 4, with the confidence that the investors would be impressed with his inventive QuikFlip Apparel. A typical issue for people on the go was resolved by his patented design, which made it possible for hoodies to be converted into backpacks in a matter of seconds.

In 2018, Gracie valued QuikFlip at an astounding $10 million and sought $500,000 in exchange for a 5% stake. O'Leary thought the valuation was excessive, even with the remarkable sales numbers and viral success.

"You're asking me to pay 20 times sales. Forget about profits. It's crazy. Classic deal where you ask for too much money at too early a time. $500k for this you'd have to have 50% maybe more. I'm out."

He questioned Gracie about how he came up with such a high figure, pointing out that even well-known apparel businesses had trouble hitting that threshold. As Gracie defended his pricing plan by pointing to sales figures and anticipated growth, the argument swiftly moved forward.

However, by the end of the day, the founder was able to get a deal from a few sharks, including O'Leary, but he ended up shaking hands with Lori Greiner.

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When QuikFlip appeared on Shark Tank Season 9 Episode 4

Rener Gracie, the founder of QuikFlip, debuted his creative hoodie-to-backpack convertible clothing during the Shark Tank Season 9 Episode 4 appearance. The product, which was made with functionality and ease in mind, had already become popular thanks to viral marketing. After impressing the Sharks with impressive sales figures, Gracie entered the Tank looking for a $500,000 investment for 5% equity. But his lofty value provoked controversy, particularly from Kevin O'Leary, who struggled to defend it.

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Rener Gracie's intense pitch

On Shark Tank, Brazilian jiu-jitsu expert Rener Gracie pitched QuikFlip, showcasing his inventive clothing that can be converted from a hoodie to a bag in a matter of seconds. He came up with the concept because he needed a useful solution to transport clothing in inclement weather. QuikFlip was already well-known, had gone viral online, and had a devoted following before making an appearance on the show.

During this pitch, the founder revealed that in just a few months, QuikFlip had generated $575,000 in sales, demonstrating its market demand. The company was growing its product line and had agreements with big-box stores. With the help of strategic alliances and direct-to-consumer sales, QuikFlip was poised for rapid expansion.

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QuikFlip sparks debate among the sharks

The sharks engaged in a debate when Robert Herjavec, Lori Greiner, and Kevin O'Leary expressed interest in QuikFlip. Robert suggested a more conventional equity investment, while Kevin offered a royalty arrangement. But Lori, who highlighted her background in retail distribution and product licensing, saw the greatest promise.

By persuading Rener Gracie to collaborate with Lori, she was able to negotiate a $250,000 transaction for 10% stock and the other half as a line of credit. She demonstrated her ability to effectively scale QuikFlip and get it into well-known retail locations. Ultimately, with a Shark Tank expert on board, Gracie left, prepared to advance his brand.

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Stay tuned to ABC to watch more such deals on Shark Tank.