"Shark Tank" Buck Mason clothing company co-founders, including a Cleveland native, say they made the right decision turning down $200,000 and not turning over a big stake in their company.
CLEVELAND, Ohio -- "Shark Tank" viewers might disagree, but Buck Mason co-founders Sasha Koehn and Erik Schnakenberg say they have zero regrets about turning down the Sharks' $300,000 offers to buy a stake in their American-made clothing company.
Nearly a year after they made their pitch on the hit ABC television show, in an episode that aired April 24, Schnakenberg and the Cleveland-born Koehn say Buck Mason has prospered perfectly well without Shark Tank money.
That's despite the fact that billionaire shark Kevin O'Leary had offered them $200,000 on the spot, plus a $100,000 line of credit, for 50 percent of the company.
Self-made millionaire shark Robert Herjavec then countered with his own $200,000 and a $100,000 line of credit, in exchange for a 25-percent stake in the company. He later tweeted:
Focusing on the basics - great for guys with no fashion sense - im looking at you @mcuban #SharkTank #BuckMason
-- Robert Herjavec (@robertherjavec) April 25, 2015
Fellow shark Barbara Corcoran, a real estate tycoon, tweeted: "Take the deal, @buckmasonusa!"
"It was an enticing offer," Koehn admitted via telephone from Venice, California. "We both really like Robert and were excited that he came back in with that, but we were still giving up too much equity for our first round of funding."
"We were eight months old at the time of this filming and were actively looking to raise a seed round of funding. Shark Tank was just another channel for capital on top of several other meetings we were taking, albeit a crazy one."
Buck Mason, founded in 2013, sells its clothing online and via one brick-and-mortar store in Venice, California. Its merchandise ranges from 100-percent cotton slub tees for $24, to oxford button-downs for $88, to indigo jeans for $135 to $155. All the cotton is loomed at Cone Mills White Oak factory in Greensboro, North Carolina, and all the clothes are stitched together in Los Angeles.
"You're in there a lot longer than what the episode shows. It's this wild, made-for-TV kind of thing where you're making this major business and life decision in front of the cameras in the blink of an eye," Koehn said. "We really wanted to make a deal. In that situation you have thousands of thoughts, trying to evaluate these people that you've only known for 10 minutes and asking yourself, 'Do I really want this person as a business partner?'"
Schnakenberg said: "Sasha and I stepped out of the room and talked about the offer. We did think about it, and ultimately, we knew there would probably be additional rounds of funding. At that point, we had only put $10,000 into the company, and we were looking to raise $200,000" to buy more merchandise.
They felt Buck Mason was worth $1.5 million to $2 million, so taking $200,000 for a 25-percent stake felt like the sharks thought it was worth only $800,000. "We did $500,000 [in sales] right out of the gate, we did it with $10,000, and it was all direct" to customers, he said.
Koehn added: "It was a very difficult decision, but we both stuck to our gut on it, and we have no regrets about it."
Others disagreed, and told them so via social media.
Viewer C. Michael Ferraro tweeted:
Should have taken that deal! @robertherjavec they missed out. #SharkTank
-- C. Michael Ferraro (@cmferraro) April 25, 2015
Nicole Franklin agreed:
I would've taken that deal with Robert. And he would've looked good in the clothes! #SharkTank
-- Nicole Franklin (@Nicoleedits) April 25, 2015
@buckmasonusa are fools for not taking the offer from @robertherjavec ! BIG MISTAKE!!! #SharkTank
-- michelle (@mishma808) April 25, 2015
A customer named Holly Hughes Terpening posted on Buck Mason USA's Facebook fan page: "I can't believe you didn't take the deal. My husband and I were literally just hollering at our television because we wanted you to take that amazing offer from Robert and we still can't believe you turned it down. Love your company, love your vision and products, but you should have taken it. I hope you find great success just the same..."
John Duffy agreed, saying: "Big mistake not taking the advice of 5 individuals with billions and billions in sales and likely a few hundred years of combined expertise."
But Eric Fuehring thought they had made the right call. "You guys worked too hard to give away 25%. Good for you."
Koehn and Schnakenberg, who had been invited by producers to appear on the show, said they saw it more as an opportunity for exposure than to raise capital.
"We really wanted to make sure that we were able to share our story with the sharks just as much as share our numbers," Koehn said. "Because we had some success already and were confident about our brand, we didn't go onto the show with any sort of desperation."
They went into the tank with a figure in mind, but would not say what it was. "I think being in front of the Sharks and all the cameras could have easily let us forget that number and our plan, but fortunately having my partner next to me helped us balance these decisions on the fly," Koehn said.
"It was pretty intense at the end because they were all talking over each other, even more than the camera showed. That said, the Sharks were all incredibly cordial and supportive. Even Kevin was awesome," he added. "It was kind of a wild experience that did nothing but reaffirm that we were on the right path and doing the right thing."
Sasha Koehn and Erik Schnakenberg refused offers to relinquish control of their Buck Mason's made-in-America men's clothing. The two explain on their website: "We created Buck Mason because the idea of living in an America where we don't make things anymore didn't appeal to us. Because we believe for every stitch and every rivet there should be an American worker who takes pride in making a quality product. That's why we're bringing manufacturing back home. It's what drives us every day."
"Our business has grown 20 [percent] to 100 percent month-over-month since. Since the episode aired, the 'Shark Effect' has been incredible," Koehn said. "It's been a wild ride, and we're starting to prepare for our next round of funding to continue to scale and keep up with demand."
As they told "Shark Tank," Schnakenberg said they are absolutely committed to creating something they can pass along to their children. "People tell me 'it looks like Sasha wanted to take it,' but that's not true. He definitely did not want to take it."
"This isn't about trying to build something and selling it in three years. We're doing it because we love it, and we want to do it," he said. "I think it's really reflective of who we are and what we are, and the quality of the product is something that we really believe in. And if we do it right, we know people will come back over and over and over again."