Kevin Hart didn’t invest in this 'Shark Tank' company because of his own past 'mistakes'
Actor, producer and entrepreneur Kevin Hart is the one of world's highest paid stand-up comedians and owns a successful venture capital firm — but he didn't get where he is in the business world without learning from his mistakes.
On Friday's episode of ABC's "Shark Tank," the guest Shark turned down an offer from Candi — a celebrity meet-and-greet network — simply because of his previous personal experience.
"A lot of mistakes early on in my business career were made in that space," Hart said after rejecting the founders' pitch. "All based off of, 'Oh, said person has this many followers. If we get them to do this, then this is going to be a success.' That's not true."
Since launching the Chicago-based company in April 2020, husband-and-wife team Keithan and Quiante Hendrick said Candi has made over $100,000 by connecting fans to influencers and entertainment stars via live video calls. The talent — which ranges from famous TikTokers to Grammy-winning artists like Chaka Khan — sets their own rates for five-minute long conversations. The personalities pocket 75% while the Hendricks keep 25% of earnings.
At the time of filming, however, Candi had no "traditional forms of marketing," meaning the company's promotion completely relied on promotion from its 350 celebrities.
From his own experience, Hart said Candi's dependence on endorsements meant the company lacked "an engine."
"The talent pool is going to guarantee your return, which is where I'm having trouble because these [platforms] have existed before," Hart said. "The reason why they come far, few and in between in a place of success is because they fall apart."
Hart is referring to a competitive industry of similar sites and apps that connect fans to celebrities by way of recorded video greetings. Cameo, for instance, is perhaps the most well-known and made $100 million in 2020 alone.
The Hendricks argued Candi's platform is "more personal," since their site sets up live direct-to-consumer video calls with the stars. They said they just need a Shark's "validation" to grow their technology and talent acquisition team.
Hart still didn't see how Candi's platform could hold its own.
"We don't really know if this is something that not only works, but who's to say somebody won't swoop in and do the bigger version of Candi," the comedian said.
Hart also said their pitch of $500,000 for 15% equity was "extremely aggressive." The other Sharks agreed, and Mark Cuban called the ask a "fundamental Shark Tank mistake."
"You only gave up 15% and are expecting us to be that door opener," Cuban said. "That's a lot of work. That's a lot of obligations."
Lori Greiner said the pitch was also "much higher than [Candi has] actually sold."
The Hendricks left the tank without an offer from any of the Sharks, but said they still gained valuable insight from the experience.
"We do regret the amount of the ask, but it was great just meeting Kevin Hart," Keithan said. "Any time you have a guest Shark like that that can give you such invaluable advice — I feel like we just got a free consulting session."
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Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."