It’s hard to imagine Mark Cuban struggling with money. But even the billionaire owner and investor of the Dallas Mavericks on ABC’s “Shark Tank” can remember what it was like to be short on cash.
That’s why Cuban might identify with the story of Shark Tank entrepreneur Kaitlin Mogentale, who introduced her sustainable chip company Pulp Pantry on Friday’s episode.
Cuban told Mogentale not to “feel bad” because her bank account once nearly went into loss. Since founding in 2015, her mission-led company was finally profitable, but it was a long and difficult road to get there. In fact, Mogentale’s bank account once had around $1,000, she told the Sharks.
It’s a feeling that many people – even Cubans – can relate to.
“We were all negative,” Cuban told her before investing $500,000 in Pulp Pantry.
It turns out that Cuban is no stranger to the usual financial problems that come with being a novice entrepreneur. On a 2019 episode of Shark Tank, Cuban — now worth $4.7 billion according to Forbes — alluded to his own financial instability early in his career. He grew up in a working-class family in Pittsburgh and couldn’t even afford to open a bank account before starting his own business.
But since then, Cuban says he’s also come to understand the value of purpose-driven businesses – which is why he felt compelled to invest in Pulp Pantry.
While studying environmental science at the University of Southern California, Mogentale told the Sharks she watched her friend make juice from organic vegetables, only to waste “handfuls of pulp” in the process. So she came up with the idea of reducing food waste by turning the leftover fiber into chips. She pitched the idea to professors and eventually received a business scholarship from USC to start Pulp Pantry after graduating.
At the time of filming, Pulp Pantry had made just under $250,000 last year and is expected to make $500,000 by the end of 2021. She wanted $500,000 for a 10 percent stake in her company—and for a shark to help her with marketing.
The Sharks all loved the vegan, gluten-free chips, which are made from recycled plant fibers. But Barbara Corcoran’s concern that the product wouldn’t stand up to fierce competition in the healthy snacks market — a global industry worth $78 billion in 2019, according to Fortune Business Insights — stopped her from taking action to join the deal.
Kevin O’Leary was more concerned about Mogentale’s $5 million valuation, which was about ten times higher than Pulp Pantry’s sales. However, since he still believed that the product’s sustainability was “on trend,” he offered the CEO $500,000 for a 25% stake.
Guest shark Emma Grede said that while she doesn’t normally “agree with Mr. Wonderful,” she also found Mogentale’s review “a little crazy” and declined to make an offer.
Then Lori Greiner stepped in with her own offer: a loan of $500,000 with 6% interest for three years, plus 10% equity.
Cuban followed suit, but first listed several sustainable, healthy snack brands he had already invested in, including vegan brands like Wanna Date and Everything Legendary.
“All of these are companies in your category — companies whose mission is to make the world a better place and people healthier,” he said. “I understand the category.”
He offered Mogentale $500,000 for 20% of Pulp Pantry.
After Greiner refused to budge from their original offer, Mogentale Cuban countered with an offer of 15% of the shares. The two met in the middle and agreed to invest $500,000 for 17% of Pulp Pantry.
As she exited the tank, Mogentale said she was excited to partner with an investor who understood Pulp Pantry’s mission.
“Mark Cuban has invested in this area,” she said. “He knows how to help brands our size do this. He will be a great asset to our team.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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