Find Your Exit | Byron Young | CordaRoys

 

Ready to learn the real secrets to bagging massive profit? In this episode, we sit down with Byron Young, the visionary founder of CordaRoy’s, to unpack his incredible journey—from creating the game-changing bean bag with a bed inside (backed by a utility patent) to stepping into the infamous Shark Tank firing squad. Byron reveals the shockwaves caused by his $1 million valuation request, the truth behind his $100,000 net income claim, and why he ultimately took a tough deal with Lori Greiner. Discover the crucial lessons every entrepreneur needs to know about setting the right business valuation, securing intellectual property, and building the solid foundation needed for massive business growth. Fasten your seatbelts for a fast and bumpy ride—you’re about to be loaded with content!

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Watch the episode here

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Bag Your Profit With Byron Young, Founder Of CordaRoy’s

Welcome to another episode of the show. Thank you again for tuning in. I always say it is going to be a fast and bumpy ride. You are going to be loaded with content. It is going to be like drinking out of a fire hose. This time, I know it is going to be an exciting episode. Fasten your seat belts, get ready for the ride. We have Byron Young, founder of CordaRoys. He is going to throw some stuff in the air and make sure you are paying attention. Get ready to listen and learn. Go ahead, Byron. Welcome to the show.

Michelle, it is nice to be here. I appreciate you having me on. I am not an expert podcaster like you, so forgive me if I am a little raw. I will try to keep my language to a minimum.

Say whatever you want to. I do not really care. I do not think we have a big kid audience. We have a really big entrepreneurial audience. Say what you want, but you have been on Shark Tank. You used to be under pressure. You used to be in front of the firing squad. You are used to that, so you are going to do just great. Plus, I think you have been on QVC a few times, maybe.

Yes, five years straight with Lori.

Do not give it away. We are going to start the episode that you were on. Have you seen this episode of Shark Tank since you have been on?

I have seen it. I will tell you what, it is playing right there in my store 24 hours a day, pretty much. Yes, to say I have seen it. I get to see how skinny and young I was every single day. I am constantly reminded.

It is funny because some entrepreneurs who are Shark Tank guests will say, “Michelle, I never watched it at all after the episode because it was terrifying, and I still have PTSD from that. This is my first time seeing it.”

Mine went really well, so I am completely fine with it.

That is letting the cat out of the bag. Maybe yours went horribly. Let us see. Get ready. Here we go.

“Sharks, my name is Byron Young. My company is Cordaroys. I am here seeking a $200,000 investment for 20% of my company.”

Byron Young, last name Young. You still look young.

Thank you.

It is so funny because what episode, what year was this?

2013.

What I notice is not so much that you have aged. I notice all the Sharks have aged, especially Lori.

Yes, well, it happens, I suppose.

We have this evaluation you came up with, which is a million dollars. Do not give anything away because we are going to discuss it a lot more as the episode continues to play. How did you come up with that number real quick without giving anything away?

Pulled it out of my ass.

I love it. He pulled it out of his ass. That is great. Tell the truth. Always be honest.

There is a longer story behind that. It was a sudden change the day before filming.

We can explain that after the take. Let us go back and listen to what Byron has to say.

“Sharks, I am here to show you the CordaRoys bean bag and demonstrate why it is the most comfortable and versatile chair in the world. Now, first of all, it is like sitting on a cloud. There are absolutely no pressure points because it cradles you with super soft foam that is guaranteed to never go flat. That is just the beginning. Check this out.”

How do you get out of it? It is very difficult to get out of that baby.

It helps to be in shape, and it helps to have friends.

I had to be in shape to have friends in order to buy these bean bags.

“With CordaRoys, there’s a bed inside.”

Now that is freaking amazing because are there any other bean bags with a bed inside? I am sure there is now.

We had that patent.

I have never seen that. I have bought bean bags on bean bags, I have never seen it with a bed. Automatically, when I first watched this episode, I was like, “I have to go buy that because I have this fold-out bed that you got to pump.” It comes with a pump, but then you have to put it back together, and it takes like twenty people to put it back together. When I saw the bean bag, I was like, “I am throwing that out. I am getting the bean bag bed.”

It does not go flat at 3:00 in the morning either.

Regardless of how rough you are.

Exactly.

“Amazing products in every household, apartment, and dorm in the US and beyond. My product is ready, my company is ready, and I am ready. Let us do this. Can we feel it? Absolutely. I am afraid that if we sit in it, we will not come out. That is what everybody says. You will not want to get out, but I will get you out. Just fall back like you want to make a dent. What do you think? Nice? Yes. This one converts to a king-size bed. This is a full-size.”

“What is inside? Poly-fil? It is the same thing that is in a sofa cushion, except that it is shredded, so it will never go flat. All the parts are replaceable. The covers are washable. Was it comfortable? It is really comfortable. It is. You are saying, for $200,000, I get 20% of your business? Absolutely. That means you are telling me it is worth a million dollars. Absolutely. Our sales are so lucrative that you are making at least $200,000 of profit this year. Both.”

Let us see if he is worth that million dollars. My audience, you should really comment. Send me some PMs about that.

The Utility Patent And Its Successful Enforcement

“The concept of the bed coming out of the chair is a utility patent. Not just a patent, but we have enforced it twice against companies much larger than us. Successful. Really? Good for you. I like that story. Let us talk about the cash.”

Let us talk about this real quick. You knew right away you were going to have to get a utility patent because you knew there would be a bunch of copycats. There are going to be copycats anyway, but you could protect your product.

What is important about a patent, too, is not just having a patent. The fact that I had enforced it twice was really important because having a patent is one thing, enforcing it is a totally different thing. I can have one. If a company larger than you infringes, sometimes it can just be a money game. We had enforced it twice successfully, so that was a really important part of that.

Having a patent is one thing; enforcing it is a completely different thing. Share on X

To my audience, I have a lot of inventors, not necessarily entrepreneurs. Let us see. You really have to get these patents. It is like it can make or break your company. If you did not have those patents, you could have been put out of business. There is no doubt about that. I would also say that I see a lot of people getting patents way too early.

There is that as well, spending way too much money on a patent, on an idea that you have not even made one yet, and have not done any testing at all. There are tons of patents that are filed, and nothing ever happens with the product. It was not even a good product.

What is your ideal timeframe, because I know there is a balance between filing too soon and filing too late, because the product is already out there, and the market, it is much more difficult to get that patent.

Most people who come up with ideas are not curing cancer. They are coming up with a better mousetrap. The funny thing about the thieves out there who want to steal your ideas is that they really do not want to steal them until they are making money. I usually recommend these. We are not talking about medicines and things like that. That is out of my realm. I am talking about products, knick-knacks, better mousetraps.

A better bet, better be back.

Make 1, make 10, whatever it takes, make them and sell them to your friends, make them and give them to your friends, do whatever you have to do to start testing, and do what I did, say patent pending. That is not necessarily true, and it is not true. It was pending my filing it. It is just a little white lie because let us face it. The only people who care about that white lie are the thieves. We are even. I am lying, and you are a thief, so go with it.

Just add another angle to that because I own multiple companies myself and some product companies. You can file for a patent pending. That is what we did with one of my companies in Houston.

It is a provisional patent that will give you one year, but that year goes by fast.

It will go by fast. I suggest if you have already tested out with friends and family, you go for that provisional patent. You go for that patent pending, and then you really have to hurry up because it is in one year.

Putting it together at that point and being moved, and during that year, because that year is going to fly by. Now, it is retroactive. Your patent will start on the day of that provisional patent, so you are covered from that date as long as you do not forget to file and follow through with it, and file the utility or whatever it may be after that.

It is important to get the right attorney, too, because the right attorney is going to keep you on track and make sure you do not forget about it.

A good attorney also will not take all your money. There are a lot of companies out there that will just take them. They will just keep taking money, especially these online companies. A lot of these ones make it seem so easy, whether it is trademarking or patenting. They will give you an entry rate, and then you will just keep getting bill after bill after bill, and they use scare tactics, and it is crazy.

If any of you listening need a good patent attorney, contact me. SeilerTucker.com is my website, but on social media, Michelle Seiler Tucker. I have got a couple of great patent attorneys.

Do not go to what you and I might remember as the yellow pages. Do not go find some random person.

Do not date me. You could date yourself.

Get somebody who is recommended.

Do not do it online.

I still say do not do it too early. Do not kid yourself. Your idea is probably not as good as you think.

Test them out with friends and family.

After Shark Tank, I got invited to lunch every single day by a friend or somebody who had an idea. I got to tell you, not one of them was a good idea. Most of the time, they are not great ideas.

He is not discouraging you.

Listen to people, do not just have your mom tell you it is fantastic. Get some real feedback and listen.

Yes, a thousand percent.

“Last year we only did 1.4 million in sales.” “Not bad.” Wow. I say only 1.4 million because my business is designed to be a $5 million business. I have got everything in place, from manufacturing products to personnel. We have a store at the Mall of America, which has been in business for almost eight years.” “A store, meaning your retail store?” “Our retail store sells only our products.”

Let us unpack that right there because there is quite a bit to unpack right there before we get into net income. You were at 1.4 revenue in 2013. This one, I want everybody to pay attention to. You designed it to be a $5 million company. You were ready for that growth. You built that foundation, correct?

Correct.

It’s because you knew ahead of time that it was your goal.

Yes. At one time, we had 24 mall locations. We knew we could handle a lot of manufacturing and customer service and whatnot. We had the infrastructure. When I took over from my partner, I bought him out in 2009. When I took over, I went more internet-heavy, and I closed down the locations because it was more of a pain than it was a profit. I kept the Mall of America, and I think one more, but I kept it because it made money.

The point I am trying to make here is very important to entrepreneurs. Entrepreneurs will go ahead and start a business and have no real growth plan. They just know they want to grow. They do the marketing. They do all the things that they think are going to contribute to growth. Then they get the growth, but they do not have the solid foundation to support the growth, and they end up crashing and burning. I help fix businesses all the time. I have business coaching, I fix companies, I sell companies, and I do business valuations. The biggest thing I see is people grow, grow, and then they do not have that foundation. What specifically did you do to build that foundation to handle the $5 million growth?

As I said, we did it a little slower than it might seem. One of the things about my company when I went on Shark Tank was that we had been in business for fourteen years. I had to downplay that.

We had already been in business for fourteen years.

I had to downplay that. At one point, I think Mark Cuban said, “Man, you have been doing this forever.”

He does say that.

You’ve got to remember some of those years that I count were also in my garage. I came up with plywood tools, everything. I made everything from scratch. I was doing all the cutting in my garage, and then 9/11 happened, so we had to get through that. There are a lot of valid excuses.

You have 2008, the financial debacle.

Pivoting From Kiosks To Internet Focus

I had just taken over from my partner in 2009 and realized that we did not have the money in the bank to pay the bills. That is when I decided to close the kiosks that were costing me money, focused on this relatively new thing called the internet. That is when I hit. That was the best thing I’ve ever done.

This is a good journey. Rather than you having been in business for fourteen years before Shark Tank, it is what most business owners go through before they even get to see big numbers.  You are not an anomaly here. It is important to know that when you go on Shark Tank, if you have been in business, a lot of people think, “If I have been in business fourteen years, I should have already made it. I do not need a shark,” but that is not true. Go ahead.

In fact, I was going to mention the whole growing too fast thing, too. I used to laugh when people said that because my entire fourteen years up to that moment, I could never make enough bean bags. My whole stress that I would go to bed every single night thinking about was how to make more bean bags. We constantly needed more.

You are like the donut guy. “I got to get the donuts.”

I can tell you a story when you are ready. I can tell you about growing too fast as well, because that is no fun either.

It is a fine balance, but what was your revenue in those previous years? Did you even make enough money to support yourself?

I felt like I was rich. I had a wife and two kids. That was my wife on the show with me, by the way. She does not get enough credit, and she actually looks better than she did back then.

You should have had her on.

I know. She hates this stuff. She was nervous. She said her legs were shaking on the show when she was there, even though she did not have to talk. Anyway, growing too fast can be an issue as well.

Growing too fast can be an issue. Share on X

That was a fine balance.

“Last year, what was the profit? The net was the problem because we are at our critical mass. When I say we did 1.4 million, we only netted about $100,000 last year.” “Have you sold to any retailers?” “We are in mostly privately owned places. Now, we have done QVC.” “How did it do?” “We did about $2,400 a minute, and that was five days prior to Christmas.” “Is that good, Lori?” “I do not think it is very good.”

A lot of people would think that is good, but that is not good for QVC.

They screwed us over. They told us they were going to get the product to the customer before Christmas. Even though it was five days, they had time to do it because they had the products in their warehouse. I did not learn until we did the show that they said on air that you will not get this in time for Christmas. It was also not a good spot that we had. With Lori, you get the prime spots, so I did not think QVC would even work. I just want to clear something up real quick because I forgot what I was saying a while ago when you asked if I was making any money. At 1.4 million, I had a wife and two kids, and honestly, I felt rich. Things were growing, and 1.4 million was not costing me very much to do that.

You said your net was $100,000, and you were not at $1.4 million the entire time.

I was being way too honest, or I was not counting all of the money I was making. I was counting just the money I put back into the business. I was not counting the business growth, the money I was putting back into it. That should have been worded a lot differently than it was. It was definitely more than $100,000.

You were making more than 100,000. I mean, some personal expenses run through the business, which everybody does.

I was counting like what was actually left after I gave myself a shit ton of money and my employee. I could have worded that differently and made it sound a lot more impressive, but whatever.

How long had you been doing 1.4 million before you came on the show in 2013?

I do not know. That was what we did that year. Everything, I was being super duper honest on the show. We probably did one point something million before that, I do not know, so it was okay.

One point four was your top?

Yes, that was our top at that point, and I said it.

“You were five days prior to Christmas, which is a very hard time. What year was that? That was about 10 years ago or 8 years ago.” “How long have you been doing it? Seriously, since about 2001. You have been doing this now for eleven years. Yes, seriously. You have done about 1.4 million in sales in the last year. We have done up to almost 3 million. A year? Yes.”

You did almost up to 3 million.

Yes, but we lost a lot of money that year.

That is what these shows are about, to really put it in perspective, because like I said, that is a big point I want to make to the entrepreneurs. Just because you did 3 million does not mean you made any money. A lot of business owners are always saying, “I got $3 million in revenue. I got $5 million in revenue.” It really does not matter. Who cares? Everybody cares about the bottom line. What is that net number? What is that EBITDA, Earnings Before Interest, Taxes, Depreciation, and Amortization? You did 3 million, but lost money.

That is when we had all the kiosks. I will tell you what, if I did the show knowing what I know now about how a lot of the people talk on the show, there are ways to word this that are much better. I was being completely transparent and completely honest.

I do think you should be transparent. I am not telling the audience to lie.

There are ways to be transparent that are a little bit better than this.

What are the kiosks, by the way, that you shut down? Were those the retail stores?

Yes, we had a few actual stores and mostly kiosks. We had the retail store at the Mall of America. It was an actual store.

How many retail stores do you have now?

Where I am standing, this is our office, our corporate office headquarters, and it is a retail store. It is where we do our testing, where we do our filming, where we do our pictures. There are all kinds of good things here.

We will talk about that coming up.

“The queen, for instance, is our medium size. We make it for about $70, and it sells for $259. We got 40% margins on wholesale, 80% on retail.” “Furniture in this country you are sold in some pretty big furniture outlets, and why are they not carrying?”

Let me go back to knowing your numbers. You do know your numbers. You said it was 40%?

Barely. I am horrible at that part.

That is the mistake Shark Tank guests make is that they do not know their numbers. Even if you are not a numbers person, like maybe Byron is not, it is really imperative to know your numbers or get somebody else on with you who does know the numbers.

If they had dug too much deeper than that, I would have been screwed. If your audience wants some good advice, make sure you have a good accountant and a good CFO.

Come to me because Byron, I do have people come to me for me to help them get ready, know what the valuation is, know what all their numbers are. I quiz them, and we go back and forth. When you get on that stage, you just know it. Byron does not know. He did not know his numbers, but that is okay. A lot of people do not know their numbers. Just make sure you know them before you go on the show. Now, you were on in the beginning, if I remember correctly.

This was season four. We did not have all the information that people have now. It was very real, very terrifying, and they made sure of it.

Now people have a lot more data.

“It takes a salesperson to sell the product.” Come on. It is a bean bag.” “I know, but you do need to do the demonstration.” “How much investment have you made into it?” “I have got $300,000 in inventory right now that is paid for in full.”

Let us go back. It is a bean bag. You have to do the demonstration. That is because there is a bed in the bean bag, right?

Yes.

People do not get that.

If you want the best education, if you want to be thrown into the fire with your product, open a mall kiosk in a very crowded mall. I used to stand away from my people selling, and I would listen to people walk away. In fact, in Baton Rouge, Louisiana, in the mall, I listened to a customer walk away and talk about how bean bags always pop. That is the old bean bags because they did not have air release, so people would jump on them, and eventually the seams would give way.

Like a water bed. That would pop too.

The Birth Of The Lifetime Guarantee

It will pop, and those little beads will go everywhere, whereas ours will not do that. You could drop it out of an airplane, and it will not pop. As I was listening to these customers say that, I called my partner and I said, “We are doing a lifetime guarantee. I am going to nip this in the bud. I am so confident that these things will not break that when they say they are going to break, I am going to say you get a lifetime guarantee.” In Baton Rouge, Louisiana, not far from where you are, the lifetime guarantee was born.

Yes, I am in New Orleans in case you all were wondering. Impressive.

“I have got a hundred thousand dollar piece of machinery that is specially designed by us to manufacture this product, which by the way is a very key part of this because we can manufacture these very quickly.”

Manufacturing, when you first started, were you manufacturing in the USA or were you going overseas?

We were in the USA completely at this point, I think.

Are you manufacturing the facility you are in right now?

Not here. Back then, we were just not far from here down the road, and we were doing all the foam shredding, fabric cutting, and had a local lady doing our sewing for us. We were 100% at that point. There are certain things that people overseas do very well, and they happen to do cut and sew very well. They work with fabric very well.

They do.

There are certain things they do not do well, and we do those things here.

A lot of times, it is a lot less expensive. Your bean bags are pretty heavy.

They have to be sewn correctly.

What is the average weight of a bean bag?

Ours, the queen size, is probably 30 pounds. That is the average size that we sell.

“Just a little over 700,000 last year. Our customer is not technically a bean bag customer.

He did 700,000 because it got cut off there. He did $700,000 online sales. Correct?

Correct.

That was in one year?

Yes.

You were saying that it is not really a bean bag.

That was making the point that bean bag customers are typically a bean bag, which is a little tiny $30 bean bag, and it explodes. It is what we call a disposable bean bag. With ours having the bed inside of it, it would, and again, by being in the mall and dealing with thousands and thousands of people, we knew that the people who did not want a bean bag wanted our products. Everybody wanted one. It was just a matter of whether they had the space for it or the money for it or whatever it might be, but everybody loved it, and everybody wanted one.

The people who said they didn’t want a bean bag still wanted our products. Everyone wanted one—it just came down to whether they had the space, the money, or both—but the desire was universal. Share on X

“Our Mall of America location, they are all impulse buys. Those people did not come to the mall to buy a bean bag. What will you use the money for? I will use the money mainly for marketing, and frankly, I am here to find a strategic partner who has already done this with a product. That becomes a challenge for me because I just do not know if I can give you assistance in that area.”

Let me ask you this before people start saying if they are in or out, and do not give anything away here. Who was your ideal shark walking into this?

Honestly, I thought it might be Mark.

Mark might be your ideal shark.

I did not know much about Robert. I knew Lori from QVC, and I had already had a bad experience on QVC. Mr. Wonderful, I do not know. He just, I did not even know what to think of him. Nowadays, I know he is a pretty nice guy. Back then, I did not know what to think. Mark, I figured he is into sports. I am an athletic guy. Maybe we would get along, and maybe that would work out somehow. That is what I figured.

“Action and production, that would be a different case, but I think you have that buttoned up, so I am out. All good. I like what you are doing. I think it is interesting, but there are two issues.”

A “but” is never good. We all have a “but,” but we never want to hear the “but.”

I totally disagree with that statement. I like a “but.”

I do not know, we all have “buts.” I do not like a “but.” It is like opinions. Everybody has an asshole, everybody has an opinion.

I will tell you, it is very strange to go on here and know that you have a product, know that you have a legit business, because I watched all the shows before this, and these people had only been doing it for like three months or a year or whatever. We have business with everything legit, manufacturing, office, people, customer service, and then to go on here and feel like that they have never even seen anything this good and legit, and then all of a sudden to have people going out. I did not prepare myself for this. I did not like the rejection of this, even though I did not show it.

“It’s very dependent on you to go sell. The other part is, it is geared towards impulse buys. Neither one of those really benefits from more spending, and you want to spend the money on marketing. I do not see that necessarily as a great fit. For that reason, I am out.”

Your hero was out. The guy you wanted to deal with is out. What did you think at that point?

You did not see what they edited out that he had already told me was that he owned one of my competitors’ bean bags, and that competitor had filed for Chapter 11 and screwed over a bunch of their suppliers and things like that. When he said he owned a couple of their products, I told him I was sorry that he overpaid, and I reminded him that my company had been in business and we had never ever screwed over our suppliers. Every bill I have ever had has been paid. They edited all that out, but I knew he was not going to stay because he had already committed to the competitor.

You knew going in he was not going to be a shark, even though you were hoping he would be.

I did not know. I thought they would be fighting over me, to be honest with you, because as I said, it was a legit business.

“Thanks, Dave. For $200,000, I get twenty percent. You are telling me it is a million dollars. I do not think so. I think your company is worth about 4 or 5 times what you made this year, which is about $500,000.”

Let us talk about that real quick and unpack that for my entrepreneur tuning in. How did you come up with the million?

It was $4 million, and that was the real valuation I had in my mind, because keep in mind a valuation. It is not only what you can get for your company, but it is also what you will take for your company.

I am going to beg to death with that, go ahead.

It does not matter because what I would take to walk away from the company was $4 million. If they wanted to buy the whole company, give me $4 million, and I will walk away from it right now. That was the value of my company. I took it based on, and again, when I said the $100,000, that was not really true. If you really worked the EBITDA, it was much higher than that. Plus, I had the inventory that was paid for, the machinery that was paid for. There was, let us call it, a million dollars there that was sitting there, paid for as well. You would be buying my manufacturing and everything. The bottom line is, I was not walking away from this business for less than $4 million.

Why did you say a million?

It’s because the night before, one of the producers had told me he was worried about me having to talk about my valuation too much. I said, “That is what I will take for it. What am I going to do?” He just said, “Okay,” and did not argue with me. That night, I decided that I was going to lower the valuation because I was not going to do the deal. That was what I was thinking. I did not know how this whole thing worked. I was terrified. Everybody I trusted told me I was crazy, but I said I did not want to talk about the valuation forever. I was under a lot of duress, and I am not a lawyer, but I knew that meant something. I knew that I could not do a multimillion-dollar deal on TV in fifteen minutes, even though I was there for an hour and a half. You saw about nine minutes.

I knew I could not do a legitimate deal. There were no papers being signed. Of course, this is all just in my head. I was wrong about some of it, too, by the way. The deals are real, and they will tell you to get lost if you do this. It was a huge chance. I thought people were going to be fighting over me. They were not, but I knew because they told me my website would go crazy if I got a deal. That is all I heard. After I heard that, I heard about money, websites, that’s it.

I knew you were not really on there to get a deal. You were there to get publicity. Mall sales, yes.

I wanted to work with one of them. I did not want the ride to be over. That is how I referred to it. At the same time, I wanted to look successful on TV, and I wanted my website to go crazy like they said it would. I did not realize that it was almost like they figured out that I figured it out, so they worked it against me and made it a lot more dramatic. I am like, “They are going out.” I did not expect this. It was not part of my plan.

They would have gone out even more if you had taken them at a $4 million valuation. They would have dropped even quicker. Let us talk about this real quick because I have to clear this up. I have been doing this for 26 years. I would have never paid you $4 million for the company. You went, and you said $100,000 net, but that was your net. That was not your true discretionary earnings or your true EBITDA. Is that correct?

Correct.

That is where you went wrong. That is where you, entrepreneurs, should listen to this. When you are going to go on Shark Tank or get to be in front of a buyer, the buyer does not care about your revenue. The buyer cares about what you are actually making in the company, what you are pulling out, salary, dividends, personal expenses, and non-recurring. You’ve got to recast the financials. You need to know that bottom line because you probably would have gotten better offers if they knew that. What was your true income back then? Do you remember?

I do not remember. I know it was much higher than that. I cannot remember what it was.

Valuation Mismatch: Why Revenue Doesn’t Matter

Much higher than maybe it would have been worth that. At a hundred thousand more, Mr. Wonderful, and I do not say this too often, he was absolutely right. I would have only paid you about four multiples of that price because I got to be able to get my money back. If you are trying to get $4 million, it would take me forever to get my money back by doing $100,000. Plus, nobody would lend on it. Plus, it would never cash flow, and I would never ever get my money. If you came in and said, “I have a $500,000 EBITDA or a million-dollar EBITDA,” that is a different story. I want to make sure everybody knows this. There was no way his company was worth $4 million or even a million at a hundred thousand dollar EBITDA. Why did you not say the real number?

Add to that that if you are selling your company, the best position you can be in is not to give a s***.

That is not true. It does not give a s***. I will not represent you if you do not give a s***. You are going to waste my time. You are going to waste my team’s time. You are going to waste my team’s time and money, energy, and effort because I do not charge retainer fees. If you do not give a s***, I am not going to give a s***.

Keep in mind, I did not keep in mind that I did not come to you. That would be a whole different matter. I am on a TV show.

I am telling everybody else. Why did you not go in there with a higher number? Why did you just say 100?

I have no clue. I was just trying to be honest about what we actually made.

You said you made more than 100 if you are supporting two kids. You definitely made more than 100.

As I said, my version of what I made was basically what was left in the bank after I did all that. When you are coming up with your EBITDA, you are supposed to count a lot more things than I counted. I do not know.

It is adjusted. For your small business owners, it is SDE, Seller’s Discretionary Earnings. For larger companies, it is EBITDA, Earnings Before Interest, Taxes, Depreciation, and Amortization.

Listen, I was so nervous. Who knows? You cannot tell it on that show, but I am telling you, I felt like I was having a heart attack for a month before the show.

I cannot imagine. I went and spoke in front of a thousand people. I cannot imagine it because they can be grueling. I get it.

Even now, I do not want to talk about my numbers. I am creative, that is not my deal.

Here is another lesson for you all. Most entrepreneurs are creative. A lot of them are visionaries, but then they do not always have the pulse on the numbers and do not know what their KPIs are, key performance indicators. Get a good CPA, get a good bookkeeper, get a CFO, get somebody like that, because you do not have to know it all. You hire people smarter than you and have strengths in the areas that are your weaknesses.

You need to realize what your strengths and weaknesses are. I have got a great CFO. I have got a great COO and everybody. I have on the team. My team is everything.

You need to recognize your strengths and weaknesses. Share on X

You are going to add me. You got the best M&A advisor out there with 26 plus years of experience. They wrote the book Exit Rich behind me.

Give me a reason to go to New Orleans.

Not that you need a reason, but I am an extra reason.

“You are not worth a million bucks. Yes, I am. We can disagree, but it is my money. It came at too high a price.”

You should have said, “I really want four million.” That would have really set them all in shockwaves, so you will not be the only one out there shaking.

I cannot remember if it is in here or not, but at one point, they were arguing. He and Robert were arguing because Robert was saying I was worth a million, and he was saying I was not. I looked at my wife, and I said, “See, there, I am worth a million dollars,” or something like that.

“You go for 50%. I do not think I am going to do it. I am out. How many do we have left? Just two?”

You are very charismatic. You are very good on stage. You should not be that nervous going forward. I do have to speed this up because we are starting to run out of time.

No, I am not nervous at all anymore. After that, I could talk to the whole world and not get nervous.

“This is a great deal here. Somebody better jump on it. Come on. Let me tell you where I am. I think it is obvious you need somebody like Lori for this thing. I want to be involved. I will give you $200,000 for 40%, but I will put up the hundred if you can convince Lori to come in for the other hundred. What do you think, Lori? Talk to me. Come on, women love this product. I do not want to partner on this.”

I knew before I watched the whole episode that she was going to say that because that is our wheelhouse. She does not need Robert, does not need anybody. In fact, she is going to partner with somebody. It should have been Mark Cuban, but she did not need Robert.

“Aerobeds are a multi-billion dollar business, and they do not have a chair, so there is a need. Might do well on QVC, not sure about the price point, so I am going to give you a tough offer. I am going to say first that an opportunity like what I am going to give you is going to come once in a lifetime, and it is going to come fast. If you blink, it may go away. Fast like a train right over your head. That is her blood-sucking offer. You know this is not going to be good.”

What were you thinking her offer was going to be? Now I know, obviously, what were you thinking it was going to be? If you remember back then.

All I knew was I was going to take it. It is a horrible offer, but little does she know she could have offered way less, and I probably would have taken it too.

Let us not give away the cat in the bag.

“I will give you the $200,000. I want 60% of the company. 60%? It’s because you are tired, you do not want to do it, and you cannot run around and do all the work. I can. She is trying to grab you by the beanbag. I get it, out in the Fast and Furious. She is obviously a very greedy shark. She has not eaten today. She smells blood in the water. I am out. Really? This is it. You could not talk her into my deal. I made my own deal.”

“Just so you are clear here, you realize that she has put a value on you that is less than half of what you asked for. I know. You want to control the company? I do. Could you at least tell me what the plan is? The plan would be to do our best to blitz it everywhere to get it out, get it on QVC, get it into retail stores, and possibly an infomercial. Try to get it to be seen fast and furious. That is what I do.”

I think you are a great salesman, and I think you have great salesmanship. Most people would have quit by now, or most people get on there, and they just cannot handle the sales piece of it, which is where you really shone. When I listened to her response, I was like, “Come on, girl, you can do a better job than that. You have even told him a plan.” That was not a plan, but it was also a spur-of-the-moment. That was not a plan for me.

“This is long with the company and gives you control. I really want to work with you. I really do. I think it would be great, but I think we have got to have to maintain control. Put a contingency on her. If she gets sales to $20 million, you will give her the next 30%. If you do that, I am out.”

Why not put your money where your mouth is?

Yes, listen to what she says.

“I cannot give you control of the company yet. Obviously, I cannot do that. My counter would be $200,000 for 8%. Exactly what my offer was originally. She is the right person for the deal.”

Slam Robert.

“Come on, Lori. It is going to be too much work for me. That is the problem because I know that I will have to do all the sales for it. I just know, sixteen years of experience, 400 products later. Give me a counter to your first dollar. Certainly, you can do better than that. Better than 60%. Better than 60%. Come on. Certainly, you can do better than 60%. 58%. Really? This is what I think it will take. I think I can make you millions. I like you. I would like to work with you, but I think it is going to take an enormous amount of my time, my connections, and my energy to get this out there everywhere. Are you saying that you do have control?”

I will say in her defense, real quick, for all of you tuning in, because I buy companies and I partner with business owners all the time. I do ask for a higher percentage because a lot of business owners do not understand how much work it does take and how much you do have to come in there. A lot of business owners, I am not saying this is you, Byron, at all, a lot of business owners have screwed up their companies so badly that it is going to take a tremendous amount of effort, and it is not worth 5% or 10%.

I agree.

It takes a tremendous amount of work.

“You have control, I have to work less. Whoa! Good point. Technically, you would have to work less, but you are going to be a partner because I do not go into anything without somebody being a partner. At that point, I have got your full staff, and we have got all the connections we need. Yes. Gotcha. Did I trust you? I have a reputation for being extremely trustworthy, honest, and ethical. 51%? Who gets the 51%? It is 58%, $200,000. Take it or leave it.”

See, one thing you entrepreneurs have to know is that investors or buyers are not emotionally attached. Owners are. Byron was emotionally attached. He built this business and raised himself and your kids and your wife, so he is emotionally attached. When you guys start thinking that, “We really want it,” then we do not have to have it. There are twenty other opportunities right around the corner. There are 100 opportunities right around the corner. We do not need it. Lori knew she could grow it.

“I came here to make a deal. Let us do it. What happened there? I believe that when the product sells as many as we are going to sell, it is all going to be worth it. He believes in me. I want the product to succeed and become a household name. That is my goal. If that happens, everything else will work out. Hopefully, your new boss will help you do that. That is right. Promise me. Yes, I promise you I will do my very best. Thank you very much. Congratulations, Byron. Thanks. This man went through these eleven years, and he gave it up that easily.”

“It is fabulous. This is a winner. He is going to be like, “Lori, it is your company.” I want to come up with an excuse for why he did that. I just wanted to sit in a bean bag that was once worth a million and is now worth 400,000. I really came here to get a deal. I was not leaving without a deal, if at all possible. I would rather make a little less money and have worked with someone like Lori than not get the deal.”

That is why I went through the end. I normally do not go all the way to the end, but there was a lot to unpack there. Number one, he was there to get a deal. He was not just there to get publicity, correct? He was there to get a deal. He was going to make it happen. Sometimes it is better to have a smaller piece of something than it is a bigger piece. If you got somebody like Lori or Mark Cuban or somebody like that involved, you have a much bigger pie. You might have a smaller piece of a much bigger pie versus a bigger piece of a much smaller pie. What happened? Did the deal go through with Lori?

After I got the deal, I went back, and I met her husband because Lori was still on set and Dan came around. A lot of people might not know this, but Dan is just a very normal guy. When I looked at Dan and met Dan the first time, I told Lori, “That guy was a bad guy.” I still say, “Dan, if you see this, thumbs up, man, you are a cool dude.” He came around and talked to me and gave me their phone number and whatnot. Everybody wanted that phone number. That was like the Holy Grail.

How much money did you make?

Renegotiating The Shark Tank Deal For Full Ownership

I did not know. I brought it back to my office, and I set it beside the telephone. I think probably a month or maybe even longer went by, and I never called it. I was not trying to be cool. I am not a liar, and in a way, I knew I was not planning on letting her have 58% of the company. That is a big no-no on the show, and they could have just told me to get lost. She could have told me to get lost, and I would have understood that completely. Instead, she called me one day, and she said, “Byron.” I was like, “Yes.” She said, “Lori Greiner.” I am like, “Lori,” almost like, “I was just about to call you.”

She said, “You must not be too excited about this. You did not call me.” I said, well, and I explained to her that I was nervous and I did not know, maybe she is crazy, or maybe I am crazy, and maybe she does not want to work with me. I was incredibly honest with her on the phone about why I did not call and everything, almost everything. We decided that we would probably spend 30 minutes, and we got along really well. Honestly, it is a lot like talking to you right now. It was just a normal conversation.

We figured out that neither one of us is crazy, or both of us are crazy, and it does not matter what it was. We decided to meet in Chicago. We met and had lunch. At the end of the lunch, it was her and her husband, me and my wife. We had a great lunch, it was perfect. At the end, she said that they were ready to hand me the $200,000 check. I was like, “Oh,” and she got the sense that I did not want to do the deal. She is very blunt, just like you are. She looked me square in the eyes and said, “Are you telling me you just did that deal only for TV?”

Which is a big no, no, they did not want that happening, especially in the beginning days. Nowadays, it happens all the time, I think. Back then, they really did not want people using the show for that, which is what I did. She said, “Are you telling me you did it for TV?” I said, “I am telling you, I was not leaving that room without your phone number.” Those were exactly my words. I came up with it on the spot, and she was cool. She said, “Well played. What is it you want to do?” We sat and chatted and came up with a deal that was good for her, too.

She did not have to invest any money at that point. She got a piece of the action for five years, and we were partners. The deal did go through. It was not the exact deal, but a deal did go through. She did get a piece of the action from my company. I maintained full ownership, and we did QVC together for five years and had great success selling beanbags, great dinners that she always took us to. We walked red carpets together, we did other talk shows together, and Lori and Dan, if you are tuning in, and Courtney. It was all great. It is like a fairy tale for me.

Did she bring in millions and millions?

Yes, definitely.

What did your company do for 1.4? How did you get it?

We definitely during that time period, we are probably hitting $15 million at least. Because of Shark Tank, we got a call from a California marketing company that talked me into it.

You got to 15 million. EBITDA was probably around two to three million, right? You are a visionary, not always known for numbers, but you were doing great. We are going to have you back on. Why are we going to have you back on? What goes up does not always stay up and continue to grow. What goes up sometimes falls and comes down, and you are not always prepared for it. You had to pivot manufacturing. You had to pivot marketing. There were a lot of pivots you had to make, right? We are going to talk about that in the next episode.

Yes. This story is just beginning, trust me.

The story is just beginning because guess what? Guess what? Byron is going to teach us. He is going to teach us a lot of golden nuggets about how you can be up one day, down the next because of market changes. He is going to teach you more about the beanbags. There we go. Everybody. Thank you for tuning in to another episode of the show. I know you found it to be very informative, very entertaining with Byron, probably one of my most entertaining guests.

It was like drinking through a fire hose. There is a lot to digest in this episode alone. Get ready for the next episode where Byron from CordaRoys is back on to share what to do, what not to do, what he would do differently, and how to, most importantly, pivot and continue to change with market trends. Make sure you share this episode with your network, your community, everybody in your peer group. I always say your network equals your net worth. Until I see you next time on another episode of the show.

 

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