The relationship between "Shark Tank" investors is usually contentious; they get into bidding wars, snipe at one another, and frequently disagree.
For the first time, the five Sharks on ABC's reality pitch show saw a business that was so exciting they all jumped in together and invested $1 million in Breathometer, a startup that makes a breathalyzer that plugs into a smartphone.
The intriguing product reads your blood alcohol level in seconds, tells you how long it will take to sober up, and lets you call a cab with the push of a button.
Founder and CEO Charles Michael Yim had already raised $1 million for the business and wanted to raise another million, starting with $250,000 from the Sharks for a 10% equity stake. He brilliantly leveraged the Sharks' interest to get all of the funding in 20 minutes instead of over two months. Yim also got a massive publicity boost from getting all of the Sharks on board and the combined expertise of five multi-millionaires.
Yim had sold a company before, experience that was immediately evident in his confident pitch. He let the product and idea speak for itself, knew his numbers cold, and made it clear that it was succeeding in its own right. Breathometer had launched on the crowdfunding platform Indiegogo and done more than $100,000 in sales within a month, he said.
Yim fluently answered the Sharks' questions and eased their concerns about the potential legal liabilities involved in a breathalyzer that would influence users' behavior. And the fact that he already had venture backing didn't hurt.
The pitch was so compelling that investor and Dallas Mavericks owner Mark Cuban almost immediately made an offer of $500,000 for 20% equity, double Yim's initial ask. Cuban said he already had experience in the sensor world with his company MotionLoft and that he thinks it's "the future of technology."
Investor Lori Greiner asked if she could join in and do the retail side.
Cuban's response? "No."
"I'm not worried about the retail," Cuban said. "That's just like a smidgen vs. the long-term benefit."
Then Kevin O'Leary counter-offered with $250,000 for 15%, trying to persuade Yim that giving up less equity was to his benefit.
That's where Yim got clever. Instead of sparking a bidding war, like the one that divided the Sharks in the season's first episode, he encouraged everyone to join in.
"My idea within the next 60 days is to close a full $1 million round from angels," Yim said. "I'm more than willing to open it up to more than one Shark."
The idea for the Sharks to do the whole round was immediately floated, only for Cuban to respond that he didn't want to work with anybody else. But after the other investors showed they were willing to pitch in together, and that a bidding war would be far more expensive than working together, Cuban eventually agreed to a deal where he would put down $500,000 for 15% equity, and the other Sharks the remaining $500,000 for another 15%.
After talking through some concerns with his CFO, Yim accepted the deal, finding the combination of cash, expertise, and publicity too good to pass up.
More From Business Insider