Watching “Shark Tank” can sometimes be confusing, especially with all the fancy words they use. When Legacy Shave was on the show, Mike, the guy who created a special shaving brush, needed some money to grow his business. Lori said she’d help, but her offer might have sounded a bit tricky. Don’t worry, Here’s a simple explanation of what happened between Mike and Lori during their talk, so everyone can understand, even if you’re not a money expert!

### Simplifying the Concepts

• Equity: Represents ownership in a company. If you own 10% equity, you own 10% of the company.
• Royalty: A payment made to an inventor or owner for each sale of an item, calculated as a percentage of the revenue per sale.
• Buyout: Purchasing full ownership of a company, including all its assets.

## The Initial Pitch

Mike introduced Legacy Shave with a request for \$300,000 in exchange for 10% of his company. This means he valued his entire company at \$3 million and was offering a slice of it to the sharks for their investment.

Imagine you’re starting a lemonade stand and need \$30 to buy supplies. Your friend offers to give you the \$30, but in return, they want a 10% share of your stand. This means they own a small part of your business and will get 10% of the earnings from your lemonade sales. This is similar to what happened on “Shark Tank” when the entrepreneur from Legacy Shave asked for \$300,000 in exchange for 10% of his company.

## Lori’s Turn to Offer

Lori thinks Mike’s idea is good, but she has a different plan. Instead of just buying a piece of Mike’s company, she wants to buy the whole company! Here’s how she does it:

1. Complete Buyout: Lori offers Mike \$1 million to take over his company completely. It’s like offering to buy someone’s entire lemonade stand instead of just a share of it.
2. Royalty Deal: In addition to the buyout, She says even after she buys his company, she’ll still give Mike 3% of the money from every shaving brush sold in the future. It’s like saying, “I’ll buy your lemonade stand, but I’ll also give you some money every time I sell a cup of lemonade.” This ensures that Mike still benefits financially from his invention, even though he no longer owns the company.

Read more: Legacy Shave Net Worth 2024

## Mike’s Smart Move

Unsatisfied with giving up his entire company, Mike makes a counteroffer. Mike asks to retain 5% equity in his company. This is his way of keeping a small part of his business, which could be valuable if the company grows significantly under Lori’s leadership.

As Mike proposes to keep 5% ownership in his company, he also suggests lowering the buyout price. This leads Lori to modify her offer accordingly in her final adjustment.