In a recent episode of ABC’s “Shark Tank,” Aabesh De, the founder of houseplant health company Flora, managed to secure a $300,000 investment by using shrewd negotiation tactics.
The Journey of ‘Flora’: De, a former Microsoft employee, founded Flora in 2022. The company offers a soil meter and an accompanying app that notifies users about their houseplants’ health. Despite initial skepticism from the judges, De secured the investment by using a combination of equity, advisory shares, and a royalty per unit sold, as reported by CNBC.
De described his $64 soil meter and a free app as removing “the guesswork out of plant care” by providing precise information on moisture, temperature, light, and other essential plant needs. Customers have the option to subscribe to a premium version of the app, priced at $9.99 per month or $59.99 per year, offering perks such as 24/7 “plant diagnosis” support, access to “expert plant doctors,” and the ability for one soil meter to support an unlimited number of houseplants.
De initially asked for $300,000 in exchange for 10% of Flora, which had generated $192,000 in lifetime gross sales by 2023. However, three of the five judges, including Robert Herjavec, Mark Cuban, and Kevin O’Leary, were not interested in the houseplant industry and declined to make an offer. Barbara Corcoran expressed concerns about Flora’s subscription-based business model and also declined to invest.
De then received an offer from Lori Greiner for $300,000 in exchange for 30% of Flora. De, however, counter-offered with $300,000 for 15% equity, 5% in advisory shares, and a $2 royalty per unit sold until the investment paid off. This negotiation strategy impressed the judges, and De secured the deal.
“I think you’re smart as hell, and I like to invest in people who are smart as hell,” Greiner said. “You’ve got a deal.”
Why It Matters: De’s success on “Shark Tank” is a testament to the power of effective negotiation. This is not the first time a contestant has used this skill to secure a deal on the show. In a previous episode, Ramon van Meer, the CEO of Genius Litter, also used his negotiation skills to secure an offer from Mark Cuban, Lori Greiner, and Robert Herjavec despite initial skepticism from Cuban.
However, not all contestants have been successful in securing deals on “Shark Tank.” Heather Kelly, the founder of Heather’s Choice, a company offering outdoor adventure meals, was unable to secure a deal due to her unwillingness to compromise on her business model, despite her company’s impressive growth.
The startup world is not without its risks. In January, a startup backed by Mark Cuban, filed for bankruptcy. This serves as a reminder that even promising startups can face significant challenges.
