The Worst Investments On Shark Tank

over 40,000 companies apply to be on Shark Tank every year and 250 of those get to actually pitch the Sharks since the show's Inception back in 2009 the sharks have invested $27 million into businesses with numbers like that the sharks are bound to make a handful of bad investments in this video we'll be taking a look at two of the worst Investments the sharks have made to date starting out with toy Garo toy Garo or what some were calling the Netflix for toys was a fairly interesting Twist on a fast growing subscription industry back in 2011 essentially people would sign up for a toy box subscription where they would receive a certain amount of toys they could use for 30 days at the end of the month the families had the ability to either buy those toys for good or ship them back and receive a new toy box you can tell watching this episode the idea Peak the interest of all the sharks the average family spends anywhere between 12 and $1,400 a year and tell me again the cost per toy box that you ship was $200 did you say and what's your cost on the toys that you're shipping on the box of toys it's going to be anywhere between 50 to $85 90 2 and 1/2 months you break even on that's exactly right a deal was struck where Mark and Kevin invested $200,000 for 35% of the business but that money was gone quick toy garu had two massive issues inventory and logistical cost if the business begins to grow does it suck up a ton of cash Mick for every million dollars of sales how much do I have to put in to buy inventory of toys Justin Toys Justin Toys $64,000 that's going to cover a year of toys okay Nikki I've heard enough they had very high costs on toys because they weren't buying one toy at scale they were buying tons of different toys at low quantity also because toys are different shapes and sizes shipping costs were a nightmare M to fine-tune ironically enough the founder of toy Guru said appearing on Shark Tank may have been the worst thing for them they had a massive uptick in subscriptions after the show no grip on the logistics or inventory costs and just like that they filed for bankruptcy a year later the second company we're taking a look at is Breathometer this today will probably go down as the worst investment since the TV show's Inception because all sharks were involved D essentially Breathometer allowed you to plug in a breathalizer directly to your phone allowing you to check your BAC level at any time honestly the idea sounds pretty strong and it seems like a product that would have benefited a lot of people and the sharks have the same mindset at first glance as well Breathometer the world's first smartphone breathalizer it's so small it can fit in your pocket within a matter of seconds you'll be able to know what your breath alcohol level is and better yet he can even tell you how long it'll take to sober up and if need be you can even hail a cab with a push of a button so please join me on this mission to help people make smarter and safer decisions one breath at a time thank you now it's rare to have all five sharks go in on the same deal but it's even crazier that they all went in on a company that at its core was just a scam see the Sharks never thought to validate just how accurate this product was I mean you were plugging in a breathalyzer to your iPhone and it turns out the product wasn't accurate at all in 2017 the Federal Trade Commission ruled that the Breathometer device was seriously inaccurate in its BAC analysis because of this ruling the company faced legal issues and the FDC ordered a refund for all customers who had purchased the device on top of the product being faulty the founder of barometer didn't really seem to have his priorities in line with growing the company company the Sharks noted they would text and call him all the time asking for updates and he would rarely respond Mark cubin also noticed some early red flags about the founder and quickly realized he may be involved with the scam hi Charles um I'd look at his Instagram and he'd be in Bora Bora and I look at his Instagram yes two weeks later and he'd be in Vegas party and you know then be on nectar island with Richard Branson and I i' text him like what the are you doing supposed to be working oh no I'm networking next thing you know all the money's gone after a few years of legal battles refunding customers and vacations to Bora Bora barometer filed for bankruptcy and closed its doors I'm a small channel so any like comment and subscribe goes a long way um so if you feel inclined really appreciate the support uh and more videos coming soon

Channel: Facts Under Five

Views: 15,366

Keywords: Shark Tank, Entrepreneur, Startup, Business Success, Business Failure, Shark Tank Pitch

Id: h0jfMLDX70A

Length: 4min 56sec (296 seconds)

Published: Sun Feb 11 2024