Power Players

Robert Herjavec reveals how ugly Christmas sweaters became his best 'Shark Tank' investment

How ugly Christmas sweaters became Robert Herjavec's best 'Shark Tank'...

Robert Herjavec might have made his money from cybersecurity, but the quirky investments he's made on "Shark Tank" have paid off, too.

Of all the companies and products he's invested in since the start of the show, Herjavec says ugly sweater company Tipsy Elves has been his most successful.

"They were selling $600,000 of ugly Christmas sweaters online. I couldn't believe it," he tells CNBC Make It of the company's initial pitch on "Shark Tank" in December of 2013. "Everybody went out, I went in."

Tipsy Elves was started by friends Evan Mendelsohn and Nick Morton in 2011. The former lawyer and dentist created the company after realizing they didn't have enough festive wear for holiday parties they attended. Their business sense and passion for their product impressed Herjavec, who invested $100,000 and owns a 10% stake in the company.

"I didn't bet on the product, I bet on the guys," Herjavec says. "They left these secure, cushy jobs to sell inappropriate, ugly Christmas sweaters online. Anyone nuts enough to do that must really believe in the idea."

Herjavec says the key to any profitable venture isn't the strength of the product, but the strength of the entrepreneur.

"Give me a great entrepreneur and he can take a so-so product, and make a great business out of it," Herjavec says. "A bad entrepreneur can take a great product and run it into the ground."

Today, Tipsy Elves has made over $100 million in lifetime retail sales, making it his most financially successful investment on the show. It's an impressive haul, but his co-stars have also found success in their investments.

Fellow "Shark Tank" investor Kevin O'Leary's investment into meal-kit delivery service Plated generated the biggest returns of any company in the show's history.

"Plated, one of my deals, got sold to Albertsons, the grocery chain, for $300 million dollars. That's the biggest exit in 'Shark Tank' history, " O'Leary told CNBC Make It in October 2018.

O'Leary called Plated founders Nick Taranto and Josh Hix "a classic 'Shark Tank' story — excellent in executional skills and marketing logistics."

Like Herjavec, Daymond John also found investing success in apparel, albeit selling socks. John invested in athletic sock company Bombas. Their model — donating a pair for every pair sold — is part of what drew John in.

"Number one, the socks are amazing, they have no seams on the front so your toe doesn't get jammed up," he says. "Number two is they donate a pair to the homeless shelter, because the homeless, one of their biggest challenges are the care for their feet."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

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