Mark Cuban believes in the power of silence and patience — until he's so tempted during a negotiation that he just can't help breaking one of his biggest rules.
That happened on Friday's episode of ABC's "Shark Tank," when couple Fred Zwar and Kirsten Maitland pitched their artisan vegan cheese company Rebel Cheese. The pair shared a love of cheese, and after deciding to go vegan, searched for suitable substitutes, they said. Finding none, they created their own in 2019.
Maitland and Zwar asked the show's investor judges for $750,000 in exchange for 5% of their company, which made $2.5 million in 2022 and was projected to make $3.5 million at the end of this year. They also handed out cheese samples, which Cuban — who is vegetarian, and has a track record of investing in vegan food companies — called "really good."
Then, negotiations began, and something unexpected happened: Five minutes into the episode, Cuban jumped in with an offer, before any of the other investors.
The power of silence
Typically, during the show's negotiations, Cuban speaks last, listening to everyone else's decision-making processes before making his own offer or withdrawal.
"There will be times when someone walks in on 'Shark Tank' and I'm thinking to myself: 'There's no way I'm interested. Or, if I am, I don't have quite all the data that I need to make a decision,'" Cuban said in a July discussion with bestselling author Chris Voss on Fireside, the interactive streaming app Cuban co-founded.
"When I listen to the other Sharks, they're going to tell me if I have any competition financially to do a deal. They're going to teach me things, potentially, about that industry ... about the person," he added. "Silence is powerful. Silence is money ... money in the bank."
He might also get a kick out of others' reactions to his quietness, noting how they "always freak out" when he isn't saying anything.
Zwar and Maitland skipped that guessing game entirely. "I'll offer you $750,000 for 10%," Cuban told them during the "Shark Tank" episode, taking Lori Greiner by surprise. "Wait, wait, wait," she responded.
Two sharks for 10%
Greiner invoked a deal she made last season on the show with Boarderie, a charcuterie board delivery company. "We are surpassing, by Christmas, $30 million in retail sales within one year," she told Maitland and Zwar. "We make the most fabulous cheese and charcuterie board that you can imagine, and we have no vegan cheese."
She asked Cuban if he'd be willing to collaborate on a deal. He agreed, telling the couple:"$750,000, 10%, you get two of us."
While making counter-offers, Zwar and Maitland explained why they wanted the money and the Sharks' mentorship. "We'd be looking for ... help with our distribution. We'd also be looking for a spokesperson," Zwar said. "We'd be looking for somebody to help us with marketing."
"I'll go to a grocery store in Austin and hand out samples," Cuban replied. Greiner noted how easily Vegan Cheese could gain access to Boarderie's millions of customers.
But the Sharks wouldn't budge on their offer, and the contestants seemed reticent to go any higher than 7.5%. That's when Kevin O'Leary stepped in and gave Maitland and Zwar a pep talk.
"There are only a few moments in your life [that] you get like this. You have an offer from two Sharks that are passionate about your business and [will] give you enhanced distribution, and you're worried about two or three percent?" O'Leary said. "This is your moment! What the f--- are you doing?"
The couple decided to accept Cuban and Greiner's offer, saying they were "very excited to work with Mark and Lori" as they left the show.
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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