“It’s going to be complicated:” When Shark Tank investor Kevin O’Leary questioned Vabroom’s founders’ offer

On Shark Tank season 13 episode 9, Vabroom founders, Trevor Lambert & John Vadnais, asked $350k for 2.5% of their business. Their product was a mixture of vacuum and broom to make cleaning easier. Despite Kevin O'Leary stating that it would be "complicated" to make a deal with the founders due to their business structure, Trevor and John accepted his offer.

They agreed to Kevin's offer of $350,000 for 2.5% equity and $3 royalty until $700,000 is paid back. The Shark Tank investor Kevin said:

"I like the product I like the fact that it is selling making a deal with you its going to be complicated. You need my 350,000 or inventory I'm assuming. I'm known for being creative with my offers I teach the sharks how to structure things."

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Shark Tank investor Kevin O’Leary decided to give an offer to Vabroom’s founders

Shark Tank investor Kevin O'Leary was the first shark to place an offer as he was interested in securing a royalty deal. Other sharks, including Mark Cuban and Daymond John, backed out. Two-and-a-half-percent equity for $350,000 didn't "feel right", according to Daymond. Meanwhile, Lori felt that this industry had a lot of competition and that scaling the business wouldn't be easy.

Mr. Wonderful explained that his offer of $350,000 for 2.5% equity and $3 royalty until $700,000 is paid back, was a good one. He encouraged the founders to think through their decision elaborating that he wasn't being "greedy" but wanted his capital back. The Shark Tank investor continued:

"I'm not being greedy about this I just want some return for capital but I want a two and a half percent of the design firm because I don't know what else is coming down the pipe. So equity is sort of a venture debt deal in a way with the structure that I get paid back. It's not a bad deal at all."

On the other hand, Mark Cuban stated that the founders had complicated the overall business structure. He chimed in after backing out from placing an offer:

"Guys let me clear the deck a little bit here. You guys are a design firm with inventors that are really good at that you're also good marketers but you're trying to segment things out so that you kind of have your cake and eat it too right. You have to control the design firm, you get to segment, your product into this new company that you only want to give us two and a half percentage of."

Then, the Shark Tank investor Mr. Wonderful stated that he could help sell the products and show the power of what a shark can do. The Vabroom founders countered with 5% equity for $700,000 which Kevin O'Leary declined. In the end, the founders agreed to Kevin's initial deal. As of 2023, the company has been generating approximately $5 million in revenue.

All episodes of Shark Tank are available on ABC.