Process of getting on Shark Tank and the trip over to the taping!
Back in March, 2011, my friend Berti (who works at Villy Custom) told me that we should apply for Shark Tank. I followed through and sent them several emails but didn’t hear anything back for 3 months. Finally, I received an email from one of the Producers of Shark Tank on June 14, 2011. They wrote and asked me if I would be interested in trying out for the show later that month as they were going to be in Dallas interviewing possible contestants.
Berti and I showed up with two bicycles, a book we had made about Villy Custom, and DeVille. After answering loads of questions and filling out a comprehensive questionnaire, they told us that we were a finalist for the show, shot a quick 3 minute video of me talking about our company, and told us they would be in touch within a month to let us know whether or not we were selected for taping a segment.
I received a call in July, 2011 letting me know that Villy Custom had been selected by ABC staff to be a contestant on Season 3 of Shark Tank. They mentioned that there were over 10,000 applicants and only 82 companies were selected for actual segments (I would learn later that only 52 of those companies actually “air”). They told me not to tell anyone, and put me in touch with my Shark Tank point person that would help me prepare for the show.
After writing my pitch and practicing it over and over, I waited for confirmation on when I would be heading to the West Coast to shoot the airing at Sony Pictures Studio. Since I would be bringing my dog, DeVille, on the show with me (he is our Brand Icon), I had to drive from Dallas to California and back and I had to plan everything out. I finally received word that I would be one of the last tapings and they told me to be there on Sept. 1, 2011.
After packing up 3 special Villy Custom bikes and lots of bicycle accessories to display for the show, Adelaida (our Chief Brand Officer), Martha (her mother) DeVille and I headed off on the big adventure. It took us almost 3 days of driving time to get there. It was a nice drive filled with lots of fun moments and they kept me relaxed and practicing my intro. Speech throughout the journey.
Once we arrived , we were told that our segment had been pushed back a couple of days so we were able to do some sight seeing. We went to Coronado Island in San Diego, Venice Beach in LA, and also spent a half day at the Grauman’s Chinese Theatre.
We finally checked into our Hotel (booked by Shark Tank for us) where we met Shark Tank staff who would coordinate our schedule with us. There were 10 other Shark Tank contestants at the same hotel going through the same process. The plan was to tape all 10 companies in 2 days. We were all kept on pins and needles because they would not give us our taping time until the very last minute (literally the night before). After lots of waiting and preparation, the big day was finally here.
We had to get up very early (I think it was 6 a.m.) and all of the contestants were transported over to the Studio and given a waiting room. It was cool to see our name, Villy Custom, on the door. I had a special leash and collar made for DeVille with some Cadillac logos on it and they told me I had to cover those up for TV. Although Berti, Martha, and Adelaida were all there for me, I could only pick one person to come to the actual taping. Adelaida, DeVille and I waited around in the room. I was doing some last minute work on my presentation with Adelaida to make sure I had it down good. I was called into the makeup room and the stylist got me looking good and ready to go on. A couple of hours went by and finally, they called me in to the filming studio. First they filmed DeVille and I sitting on a couch contemplating what we were about to do. They told me to just be myself. We were then led into a large building, almost like a warehouse where there were lots of people and we were given a tiny draped off room to sit in. I could see the set and the Sharks but I never got to meet them or say one word to any of them. It’s true, the Sharks don’t know anything about you or your business until you show up. It keeps the show “real” and exciting. The Shark Tank staff set up my table for me and rolled the Villy Custom bikes onto the set. They let me look over the setup and asked me if I was ready to go. At this point, I wasn’t nervous at all because I figured I was well prepared, I had a great product to sell, and I had the best dog ever with me. At this point, they took me back into our little room and I grabbed DeVille and Adelaida wished me luck and I walked over to the front doors of the entry hallway which you see on TV. They had a handful of people there asking me if I was ok and doing some final makeup and touchup on me. Then, finally, the big moment, they told me that they were going to close the doors. We would then do a countdown and when the doors opened, I was to walk down the hall with DeVille and stop at the “X” marked on the studio floor where I would do a 30 second “stare down” with the Sharks and then begin my presentation as they counted down to zero. Walking down that corridor finally got me rattled . There were lots of bright lights and once the second set of doors opened, I could see the Sharks right there in front of me staring me down. I was nervous, but, I was ready to go….at least I thought so!
What comes next I will have to write about after our show airs on May 4th. It was very humbling, exciting, and something that I wish I could do over again. I know I could do a much better job and present our product much better. I also think I took it too seriously and should’ve been myself more, but hindsight is 20-20.
The Actual Experience of being in the Shark Tank
As Deville and I walked down the hallway and the final set of doors opened up, there they were. I looked to my right and saw Robert Herjavec, then Barbara Corcoran, Kevin "Mr.Wonderful", Damond John, and on the far left, Mark Cuban. My intention was to try and enjoy it and just be myself, but, it got real serious, real quick. DeVille (aka Villy) wasn’t nervous at all. The first thing he did was lay down, yawn and relax. He was a crowd pleaser all the way through and that is exactly why I brought him along. He even did the “worm” on the carpet in the middle of my presentation – he really knows how to ease the tension in the room. I wanted to have my co-worker, Adelaida handle him on stage, but, the Shark Tank people did not want anyone else out there to take away from DeVille, myself, and our bicycles.
After the 30 second “stare down” that you have to do, the first words that came out of my mouth were a little shaky and I’ll admit it was pretty scary, but I got through it and started my pitch. Once I got going, everything was good because I saw the looks on their faces and I could tell they were digging the look of the bikes and understood what Villy Custom was all about. Once I got the pitch part over (which, for me, was BY FAR, the hardest part), Cuban hit me with question number one. Then, they all started peppering me with questions.Sometimes they were talking over each other asking multiple questions at the same time so I just did my best to answer every question as directly and honestly as possible. Pretty sure that each Shark has a separate microphone and separate camera on each one (they told me there were 12 cameras in all). Once they edit things, you only really hear and see the one Shark asking a question.
For the most part, I think all of the Sharks treated me pretty good. Damon complimented our Brand and even my own personal style but he said he was out. He just wasn’t interested and that was fine with me because he wasn’t who we were going after anyway. It’s hard to remember because some of it is a big blur but I’m pretty sure that Robert bailed out next. Again, he was very complimentary, told me he thought I did a good job and he liked the product and felt that we would be successful, I just don’t think he really “felt” the concept. At that point, Barbara complimented the bikes and told me she “got it” and “was interested” and asked a few more questions. I was hoping that she was going to make the first offer, but, no dice. There was some more back and forth and then Mr. Wonderful, Kevin O’leary was hammering me on the valuation of 1.5 million dollars. I think I held my ground pretty good and even thought he was “riding” me a little, I told him why it was worth 1.5 million and eventually, he told me he liked me and he liked the bikes and told me I was a good salesman (which is awesome coming from him) but he said the valuation was just too high. I said, “No Problem”. Cuban had been laying back but I could tell he was interested. He’s smart and he knows when something is unique and I’m pretty sure he knew I was confident about our future. The night before, I had thought it over, and I prayed to God that it would go well and I asked God to get us a deal with Mark Cuban and Barbara Corcoran…..and I’m NOT making that up. Reason being, Mark Cuban is a local hero of mine. I’ve read all of his stuff and he really is a genius….I don’t care what anyone says. He’s a tech whiz, super smart, has an immense amount of power, he’s a celebrity, tons of connections and he doesn’t like to lose….IN ANYTHING. I want that on our team. I thought Barbara would be a fantastic partner for Villy Custom because she is a woman and she understands what we are doing from the fashion/fun/style end of things. Also, she is super smart, connected and a big name on the East Coast. She seems to take an active role in helping small companies like ours in a much more personal way than some of the sharks (and I say that with all due respect to Damon, Kevin, and Robert).
I had the two sharks we wanted left and everyone else was out. Funny thing, even though Kevin, Damon, and Robert were out, I thought someone might change their mind and come back to the table because at that point, I really made a hard sell. I told them more about all the unique features and a heartfelt confirmation about what I knew about the market and my confidence that Villy Custom will be very successful. I told them what our customers tell me – about how ecstatic they are when they receive a Villy Custom. I also shared our growth strategy with them. Finally Barbara said that she would like to make an offer and asked Mark if he would like to partner up. I got to admit, that put a big smile on my face, but, I tried to keep my cool. They offered us $500,000 for a 45% share of the company, rather than the 33% we were offering. Before I went on the show, I had pegged giving up 40% as the most we would give up, so, we were very close.
Here’s the deal. You don’t have a lot of time up there to think things over. They don’t cut and take a break or anything. It’s 100% real and you have to think quick on your feet. I was considering taking advantage of my “phone a friend” option and calling my best friend Andy to talk things over but I watch the show and sometimes when you leave the Shark Tank, they re-strategize and gang up on you and things can go sour fast. I decided to try and come their way as much as I could so I mentioned how much money, effort and time I had put into creating our Bicycle Brand and I told them we would do the deal for 40%. I got to give props to Damon John because he actually jumped in and mentioned that I had put much more into this company than just a few years….that my whole career in fashion design played a big part in our company and Branding strategy. Mark and Barbara countered at 42.5% and then 42% to make it an even number. Sometimes I think I should have held firm at 40%, but, in my mind I figured that 2% wasn’t going to make or break the deal. If we do what I think we will do, everyone, including Adelaida and I will be very well compensated down the road. Sometimes fighting over 2% can really cause a deal on Shark Tank to fall apart. We needed the cash infusion, but, even more, we needed the support and connections that Mark and Barbara bring to the table and I am thankful that I was smart enough to realize that. I thought it over for about a nanosecond and I told them we had a deal. I told them they made an incredible deal and I still think they did. They are going to make a lot of money off of their investment, but, the cool thing is that Adelaida, myself, and, hopefully others at Villy Custom will come out of this with our own li’l pots of gold. That is definitely our plan!
It was a great feeling to shake Mark’s hand and get a hug from Barbara. As I’m writing this I got tears in my eyes. It’s not the money, it’s the process of succeeding and achieving a goal that we worked hard on.
I thanked all of the sharks. Kevin Oleary offered me $2,000 for the Shark Tank bike that we had created for the show. I said that we couldn’t sell it. Cuban stepped in and said, “Kevin, we’ll sell it to you for $5,000”! Kevin said, “you got a deal….sold”. Wow, we just sold a Villy Custom to Mr. Wonderful for $5,000. Awesome. Unfortunately, ABC wouldn’t let us sell the bike because it had Shark Tank logos on it. Bummer. I didn’t care, we had just partnered up with the two Sharks that I was hoping and praying for. You can’t beat that. When I left the stage and walked back down the hallway it was truly a feeling of relief. I got through it and got what we wanted. Afterwards, my Shark Tank coach (Bill) wisked me away on a golf cart to another part of the studio and did an immediate interview with me before I could speak to anyone. For some reason, I felt like I was in shock and I felt kinda nervous in that interview. Said a few words and that was it. Done deal!
You are instructed (and under contract) by ABC and Shark Tank not to talk to anyone (except co-workers and very key people) about the outcome of the taping. Any violation results in a potential lawsuit. I got to tell Adelaida first and she was very excited. It felt awesome to give her the good news cause she was a trooper on every single part of our plan to grow the business, the trip out and all the practice. She had to sit around and wait because they would not allow her to watch the taping.
Afterwards, Adelaida and I went back to our waiting room and got to meet Barbara Corcoran’s Assistant (Chelsea) and she was AWESOME. She told me they were super excited about Villy Custom and gave me all kinds of docs and contracts that we had to get back to her. A bunch of my friends and family had been calling and texting to hear all about it but we had to keep everyone in suspense. ABC sent in a psychiatrist to our room to make sure I was ok. I think they do that to make sure you aren’t depressed or freaked out, but, I was good because I was excited. Adelaida and I had to take two of the bikes apart and pack them up to ship home. All the Shark Tank production people took care of DeVille and by the end of the day he had the whole crew wrapped around his paw.
The Shark Tank people took us back to our hotel in black vans. There were some other Shark Tank contestants on with us and one of them happened to be the “Veteran Voice of the Octagon”, the announcer for UFC fights (Bruce Buffer). At the time I didn’t know who he was, but, he did the “It’s Time” slogan in the Van for me and I was pretty impressed. He was going to be on Shark Tank, but, somehow, they didn’t air his taping. He has trademarked the words, “It’s Time” and that was going to be his pitch. Would have been awesome.
Berti was back at the Hotel waiting all day on us. We had left at 6 a.m. and we returned about 4 pm in the afternoon and we couldn’t call anyone, so, he was on pins and needles. I told Adelaida that we were going to play a trick on Berti and tell him that we didn’t get a deal on the show. He asked me “what happened” and I said, “Berti, I tried my best, but, they just weren’t interested..but we’ll be ok”. He got real upset, pretty much speechless. Then, Adelaida came over and acted real disappointed and confirmed that we didn’t get an offer. Finally, I couldn’t hold it in any longer….I told him I was kidding and we got Cuban and Barbara on board for half a million. Picture this, Berti running around in the parking lot screaming pumping his fists in the air. He was super excited and we had really punked him. Haha.
Once you are on Shark Tank, they make you immediately leave the hotel that you were in. They keep all of the contestants from talking to one another and move you to a different hotel. We checked into the new hotel and went out and had a big dinner celebration. It really hadn’t set in yet for me, I was pretty calm about the whole thing. I slept real good and we got up the next morning, took Adelaida to the airport, and Berti, DeVille and I got in our Van and headed back on a 3 day Voyage to Dallas. We had a great roadtrip back because the pressure was off!
The morning after my taping of Shark Tank was when it all sunk in. I was taking a shower in the hotel and started thinking about what had happened and what was to come. I got overcome with joy, and, I got to be honest….I started crying in the shower. Just emotions of achieving something that you worked hard for. I was very thankful and grateful that everything went as well as it did.
Berti and I loaded up the Van with boxes full of bike parts and headed East back to Texas. The pressure was off so we had a great time. Lots of stops and sightseeing and talking about everything. I was getting a ton of calls from people wanting to know how things went (family and friends) and the tough part was, I couldn’t really tell them. You sign a contract with Shark Tank and if you “spill the beans” not only do you risk them removing your airing from the schedule, but, they also have the right to sue you for up to 5 Million dollars, that’s right….5 million dollars. Anyhow, my stock answer to people asking questions was “It was a great experience, and, overall I’m pleased with the outcome but you got to watch the show to see what happens”.
It’s a long drive from California to Dallas. We got pulled over twice in Arizona and we weren’t speeding or anything. The first time they told me I was in the “fast lane” and I was not in the act of passing a car and it was a warning not to do so in the future. Within 10 minutes, I got pulled over again, this time, they told me that I pulled back over in the slow lane too quickly after I passed another car. I don’t know if we looked suspicious or what, but, the officer asked if he could search our van. I guess my “Panama” hat, DeVille (my bullmastiff), the Van, and all the taped up white boxes inside looked fishy. Anyway, we let him search the car and he made me open up some of the boxes but everything worked out good. No tickets or anything. Next time I drive cross-country, I will definitely avoid the state of Arizona. Not a good place to drive!
We saw a double rainbow and Berti just about freaked out he was so excited. It was beautiful and something neither of us had ever seen before. Lots of other cool adventures along the way and then pulled into Dallas a couple of days later. Wow, from the time I left Dallas, until the time I returned home, 11 days had gone by….all for a 45 minute pitch in front of the Sharks. It was definitely well worth it.
Now, once you complete your taping of Shark Tank, you have no idea if they will actually air it. They do not tell you, they only let you know that they will call and let you know once a decision is made. From what I understand, ABC looks over all of the tapings and determines which are the best for TV. So, even though you tape your segment, there is still competition for those coveted 52 spots, and, you don’t know for sure until later in the game. All the while, you can’t talk about it because you are afraid if you do that you may not air and then everyone will think you are just blowin’ smoke.
About 2 and a half months after my taping, I finally received word that we made the cut and our segment was selected to air. I can tell you, when they call you, it is very exciting. You finally feel safe and you can actually let people know you will “air”. Although they could not give me a firm date, they told me that Villy Custom would more than likely be scheduled late February or early March. No problem, that would give us time to prepare: update our website, beef up inventory, get ready.
February came and went and it was now end of March, we had taped our segment 6 months before, and we still didn’t have a confirmed “air” date. I was seriously thinking something was going wrong. In the meantime, we had to go through all kinds of due diligence with Cuban Companies and Corcoran Group. I will write about that process on Part 4 of the Shark Tank Experience….coming soon!
Part 4- Due Diligence
While waiting for 5 months to find out if we “made the cut” to air, we had to go through the process of inking the deal with our new partners, Mark Cuban and Barbara Corcoran. From what I’m told, only about 50% of the deals you see made on Shark Tank actually officially get DONE. As a guest on the show, you have the right to pass on the deal and the Sharks have the same right. The deal made on TV is simply a “good faith” agreement that you will begin the due diligence process. I’ve heard that some companies just go on the show to get PR, but my intentions were to close our deal. I felt that we needed the funding to grow and I also value their expertise, connections and power to assist Villy Custom to blossom into what we have the potential to become, a nationally recognized lifestyle brand. Fortunately, Mark and Barbara really wanted to ink the deal, as well!
Although we (Adelaida and I) get to speak to both Mark (pretty much all email correspondence) and Barbara (skype, phonecalls and emails) on a regular basis now, going through due diligence I primarily dealt with their team of people (and most of the initial due diligence was handled by Cuban’s crew) . I received a separate stack of documents to complete from both Mark and Barbara that was about 50 pages. They requested lots of personal information about my past, my personal financial status, tax returns, full accounting reports and all that jazz. They also wanted to know what our sales projections were for the next 5 years and also the plan for using the $500,000 in funds. Because I had been so focused on building our Brand and making a cool product, I was unable to keep the kind of records I should have been keeping. They wanted reports back right away so I had to explain to them that our accounting and inventory weren’t as current as I wanted them to be and that we would need additional time to complete them. One thing I learned from this process, if you are looking for investors – you better have a full set of current financial reports. We took a couple of months to get them done and finally sent them over.
Upon their review, they said everything looked fine and my point person at Cuban Companies, Stephen, was real good to work with. He came over to our offices and I gave him the red carpet treatment and I felt like we hit it off real well. Good guy. They did ask for a few more things thrown into the deal and we eventually came to a verbal agreement. After that, Stephen and Cuban’s attorney (Daniel) drafted up a term sheet with all of the deal points. Because Adelaida (our Chief Brand Officer) had been such an integral part of helping me get Villy Custom to this point, we made it official, and she received a nice amount of ownership shares for all of the work she has put into this thing with me. It is pretty awesome seeing a 20 year old college intern get an ownership stake and a seat on the Board with Mark Cuban and Barbara Corcoran. She is an amazing person and great part of our success story so I was real happy for her.
We then received a full set of partnership documents from A to Z. I have two super smart consulting advisors that helped me through everything and they both agreed that the documents were pretty fair to both parties. After a couple of weeks of back and forth with Mark’s attorney and Stephen we had one big conference call with Mark’s people, Barbara’s people, and my people (mainly just myself and Adelaida) to go over the final deal points. At the very end of that meeting, Stephen said that they would be firing off final documents for signature within the next few days. The entire process had started in early Sept of 2011 and it was now near the end of January, 2012, so we are talking 4 months to get everything done.
Within a few days, we received the final documents and I reviewed them one last time with one of my close advisors and I did have one or two final questions. We worked those out on one final phonecall and it was finally time to ink the deal. Adelaida and I signed off (and took some memorabilia photos of us signing…haha) and emailed the docs back to Stephen and within a week we had final copies signed by Mark Cuban and Barbara Corcoran. It was pretty amazing gazing down at those signatures and realizing that you got a Billionaire and a Multi-Millionaire on your team. All I can see is: AWESOME!!!! Mission Accomplished! Stephen told me that the deal would fund within a week or so and we would be receiving $500,000. Saaawwweeeeeeeeeet. Money to grow!
The cool thing was I had planned a trip to Maui Hawaii several months previous to completing the deal. It just turned out that the week after we closed the investor deal I got to go on my trip to Maui. Perfect timing. Every morning when I was in Hawaii I would check the Villy Custom bank account. On Feb. 8th we got a wire deposit of $250K from Cuban and then a couple of days later we got another $250K from Barbara. That was another great couple of moments sharing that scenario with my best friends in Hawaii. Everyone was real happy for me and it’s almost like you don’t really believe it until you see it.
Now that the deal is done, I know we have big things ahead. I want to make sure that this is a great investment for both Mark and Barbara and I want myself, Adelaida, and all of my co-workers to benefit and prosper and make Villy Custom as successful as it can possibly be. We will be utilizing our funding very wisely and we will hopefully make the right moves as we grow. We will continue to innovate and give it 110% every day. So far this has been a wild ride and hopefully it will continue and I am confident that it will.
My next segment is going to be about what everyone wants to know – what is it like interacting on a daily basis with Mark Cuban and Barbara Corcoran? How involved are they? What else besides funding do they bring to the table? What is our growth strategy and how are we going to implement and achieve it? What is the latest news with Villy Custom, etc…. I hope to just keep adding to this periodically to keep track of what it’s like to build a tiny start up company into a big national brand through this amazing Shark Tank course we have taken. More to come soon.