Why Mark Cuban rejected ‘Shark Tank’ engagement ring firm Do Amore

Krish Himmatramka’s engagement ring firm, Do Amore, sounds like several investor’s dream: Its diamond merchandise are ethically sourced and thoughtfully produced, and the enterprise makes some huge cash.

The corporate introduced in $11.5 million in 2021 income, eight years after launching in 2013. However on Friday’s episode of ABC’s “Shark Tank,” Mark Cuban rejected Do Amore for one essential purpose: He foresaw competitors, and did not assume Himmatramka’s firm might stand as much as it.

“You deserve a number of credit score,” the billionaire investor and entrepreneur mentioned. “However that is onerous to maintain, as a result of anyone else can stroll within the door and attempt to do the identical factor. There are not any boundaries to entry to compete with you, and that makes it onerous to take a position.”

Himmatramka began Do Amore, which he mentioned was worthwhile, after going searching for an engagement ring himself — and being delay by the ethical price ticket on a few of the diamonds he discovered. Diamond mining is commonly environmentally unsustainable, and diamond miners have a protracted historical past of being underpaid or exploited for his or her labor.

The expertise resurfaced a childhood reminiscence for Himmatramka: When he was younger, in India, Himmatramka watched a toddler die from water poisoning. Seeing firsthand how an absence of fresh water might influence communities caught with him as he constructed an engineering profession, studying that clear water was usually accessible to these communities — they only wanted assets to have the ability to drill for it.

So, Himmatramka got down to construct an organization that might assist tackle each points concurrently. He took $18,000 from his financial savings to launch Do Amore, striving to supply pure or lab-created diamonds from moral locations with sustainable practices. As of the episode’s taping, the corporate has additionally given again 20.5% of its internet earnings to assist construct clear water wells in 9 totally different international locations.

On the time of the taping, the corporate had made $26 million in lifetime jewellery gross sales. Himmatramka mentioned he needed extra monetary assist to increase its distribution and advertising, and requested the Sharks for $600,000 in trade for six% of Do Amore.

Cuban was one of many first Sharks to reject the deal, explaining that whereas he was impressed by Do Amore’s income and philanthropy, he thought any engagement ring firm might merely begin donating a proportion of gross sales to charity — negating Do Amore’s aggressive benefit.

“I do not assume simply anybody can add [charity] to what they’re doing,” Himmatramka retorted.

At the least a pair Sharks agreed with Himmatramka. First, Kevin O’Leary supplied $600,000 for six% of Do Amore, with a $100 royalty on every sale till he made again thrice his funding. Lori Greiner suggested Himmatramka to take the provide, noting O’Leary’s expertise within the marriage ceremony business.

However Himmatramka expressed hesitancy, countering with $600,000 for 10% with no connected royalty. “What do you assume I do with all of my firms?” O’Leary requested. “I scale back their buyer acquisition prices. That is what ‘Shark Tank’ is all about … I do know this house in and out.”

Then, visitor Shark Daniel Lubetzky, founding father of snack firm Type, jumped in, providing $600,000 for 15% of Do Amore. Himmatramka countered with 12%. Lubetzky mentioned he wasn’t prepared to budge, however would donate the distinction between their affords — 3% — towards Do Amore’s social mission.

Neither Do Amore nor Lubetzky instantly responded to CNBC Make It is request for clarification concerning the donation.

Himmatramka accepted Lubetsky’s provide. “Daniel understood what we’re making an attempt to do,” Himmatramka mentioned. “Daniel’s whole life’s work has been social influence … We’ll deliver so many individuals clear water and promote so many rings.”

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