After more than a decade as an investor on ABC’s “Shark Tank,” Kevin O’Leary has bettered his negotiating skills. And with all that experience, he’s found a common thread among some of his “very best” deals.
“What I’ve learned over the years, because I’ve negotiated so many different deals, [is that] the very best deals are when you feel you left something on the table, and the other side feels the same way,” O’Leary tells CNBC Make It.
“[In] the very best deals, everybody walks away unhappy,” he says.
This may sound “crazy,” O’Leary admits, but “it means it was a fair deal.”
For example, O’Leary recalled two of the “great women entrepreneurs” he has negotiated with on “Shark Tank” in recent years.
Margulis and her husband, Josh, asked the Sharks for a $400,000 investment in exchange for 10% equity. O’Leary was unsure of their valuation, but Sara was sharp in negotiating, O’Leary says. Ultimately, O’leary offered the couple a $400,000 loan in exchange for no equity – instead, he wanted his investment returned three times over.
After a bit of deliberation, Sara and Josh accepted O’Leary’s offer. The deal worked for both sides, because the couple did not want to give up much equity, and O’Leary was able to ensure a return on his investment.
“She was tough as nails,” O’Leary said of Sara. “[We] met in the middle. Everybody gave something up to get something.”
In a negotiation with season 11 “Sharkt Tank” contestants Sarah Paiji Yoo and Syed Naqvi, co-founders of cleaning supply start-up Blueland, the pair sought a $270,000 investment in their business in exchange for 2% equity.
Sharks Lori Greiner, Daniel Lubetzky and O’Leary were all interested. O’Leary offered a $270,000 investment for 5% equity and 1% advisory shares, but the co-founders did not want to give away more than 5% equity.
After negotiating, Paiji Yoo presented O’Leary with a counter-offer: She asked for a $270,000 investment in exchange for 3% equity and a 50 cents per unit royalty until he was repaid. O’Leary, a fan of royalty deals, accepted.
As a negotiator, Paiji Yoo was also “tough as nails,” O’Leary says.
“Those are great deals,” O’Leary says of Honeyfund and Blueland. “We both had to give something up, but they’ve both been phenomenal investments.”
All in all, “it’s tough love,” he said. “You got to give to get.”
Are you stuck in a financial feud? Fighting over money with a business partner, a vendor or even a family member? Kevin O’Leary wants to help you resolve your dispute. Click here to find out how.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”