I saw a very interesting negotiation on Shark Tank last night.
Mr. Wonderful found a business idea he really likes, a gourmet chocolate customization company. The guy pitching it has a bunch of other partners and he only owns 18%. (I find it very weird when companies with multiple partners don’t have all the partners on the show. Are they just shy or what?) Anyway, Mr. Wonderful made him an offer to come work for him and create a new gourmet customizable chocolate company, giving the guy 25% of the new company. So instead of Mr. Wonderful investing in the original business, he now owns 75% of a new customizable chocolate business. What a great idea! In this case, the guy turned it down because he felt had to be loyal to his original business partners.
I understand the value of being loyal, but do you want to make money or just do the job of running a gourmet customizable chocolate business? With loyalty being the issue, I would have asked if Mr. Wonderful would do 60% (not 75%) and give the remaining 15% to the current partners to come on board. They would get a piece of a giant thing because a shark owns it and would be the capital to fund all the growth.
So basically it was an interesting version of an acquisition with Mr. Wonderful going from 15% stake in a chocolate company to 75% and not having to do anything!!!
This deal really opens my mind to the creativity of negotiations!
- 7 Must-Know Negotiation Tips From Shark Tank (forbes.com)