Entrepreneurs

This ‘Shark Tank’ investor backs out of a deal, but had a surprising change of heart -- and impressed Mark Cuban

LocTote Industrial Bag Co. pitches on "Shark Tank."
Photo by Kelsey McNeal
LocTote Industrial Bag Co. pitches on "Shark Tank."

When Don Halpern appeared on a "Shark Tank" episode that aired Friday to pitch his slash-proof, locking bag, investor Robert Herjavec was not impressed.

At least not Initially.

Herjavec, a self-made multi-millionaire cybersecurity entrepreneur, was skeptical that people would use the LocTote Industrial Bag. It's a heavy duty drawstring backpack made out of RFID-blocking material that protects your credit, debit and ATM cards, preventing hackers from being able to rip your financial data.

"Don, okay, here's the thing I can't get over. I still don't understand the fundamental application," said Herjavec. "I don't think people, in a casual environment, going out to a cafe, are going to lock up their bag."

All the sharks objected to the $179 price.

Halpern said he heard the same objection from Wal-Mart when he pitched his product to the retail behemoth, and was working on a lower price point option.

Work, Play and Travel knowing your bag cannot be tampered with or stolen. #lockitandleaveit #loctote

A post shared by LOCTOTE® INDUSTRIAL BAG CO. (@loctote) on

To prove the concept's viability, Halpern pointed to two successful crowdfunding campaigns the company has run. LocTote Industrial Bag Company raised $855,000 on Kickstarter and another $615,000 on Indiegogo.

Halpern was looking for $150,000 investment, in exchange for 5 percent equity.

Herjavec, again, was skeptical and withdrew from the investing pool. "You haven't been proven by the reality of the marketplace yet. I'm out."

Kevin O'Leary was the last investor to make his offer — and it was a long shot. "I'll take a flier on it. I am not interested in negotiating with you. I will make you an offer. If you don't want it, I am okay."

Mr. Wonderful offered $150,000 for 10 percent equity with a royalty component: $10 a bag until O'Leary makes $450,000, tripling his initial investment.

Halpern pushed back. "That's a little bit rich, Mr. Wonderful. Believe me, I am in awe of your greed and I respect it." He offered a counter: "We will do $150,000 for 10 percent equity. We will do a $10 royalty, per bag, on any of the bags, until your capital is returned at 1x, which will be within the first year."

It was then that Herjavec jumped in, immediately and enthusiastically.

"I will do that deal. I will do that deal. All day long," Herjavec enthused. "I am sitting here thinking, why wouldn't he take that deal. That's incredible."

Billionaire investor Mark Cuban approves and congratulates Herjavec on his quick instincts. "Good job, Robert."

Halpern was pleased with the negotiation, too.

"I didn't see that coming at all. I really thought Robert just had no interest," says Halpern. "He laid there in the woods waiting and then ah at the end of the deal he pounced. That was incredible. We couldn't be happier. We wanted Robert from the moment we started talking about the show, so it's just awesome."