Shark Tank India: Entrepreneur rejects Peyush Bansal’s terms for Rs 1 crore deal, is told he’s making ‘big mistake’. Watch tense negotiation
After impressing ‘shark’ Peyush Bansal with their pitch on a recent episode of Shark Tank India, the team behind an insurance solutions start-up engaged in a tense negotiation with the investor. They were asking for 1% equity for a Rs 1 crore investment.
Ghazal Alagh, co-founder of MamaEarth, dropped out of the negotiations because she said she couldn’t understand their figures. “I cannot do the math in my head, looking at your current scale,” she said. “That is why I am dropping out.”
Vineeta Singh, co-founder of Sugar cosmetics, said she was impressed with the team, and offered them Rs 1 crore, but for 25% equity in their company, which was valued at Rs 40 crore. She said she could relate to their pitch, because she has seen her mother personally fight to secure insurance money.
But Peyush Bansal, co-founder of Lenskart, chimed in and asked a few questions about the company’s three-year goal. “Then I’ll tell you my offer,” he said. Vineeta said that they have two minutes to take her offer, but Peyush assured them that they needn’t worry, as his offer will definitely be better. The entrepreneurs agreed, and told Vineeta that her terms don’t make sense to them.
Peyush offered them Rs 1 crore at 10% equity, and said that he doesn’t want to share the investment with anybody else. A member of the team of entrepreneurs replied, “Sir, we have a counter-offer for you.” Peyush was surprised. He said, “Sir, isme counter kya karoge, next valuation aapko Rs 100 ka raise karna padega (How can you counter this? You will need to raise Rs 100 crore in your next valuation).” But they coutered with 1.3%. Peyush said that he wouldn’t go below 5%, because he felt that he isn’t being ‘valued’ by the entrepreneurs.
The team asked for some time out to consult privately. Meanwhile, the ‘sharks’ discussed the situation among themselves, and said that Peyush might just have struck gold. When the entrepreneurs returned, they’d made up their mind. The 5% offer would not work for them. They offered Peyush 2.5% for Rs 1 crore. “Aap badi galti kar rahe hain (You’re making a big mistake),” Vineeta said. Peyush added, “If you don’t make decisions with your head, you can’t become a big company,” and Ghazal concurred: “Bada company banne ke liye bada soch hona padta hai (You need to have big ideas to become a big company).”
But the entrepreneurs didn’t relent. And Peyush caved, and countered with 4%, which is the figure they finally settled at. You can watch the pitch in its entirety here.
Shark Tank India, based on the original American reality show that has been running for 13 seasons since 2009, features entrepreneurs who pitch ideas to a panel of investors. They either attract investment or walk away empty handed.