In the most recent episode of Shark Tank India, a retired Army officer boasting extensive experience from conflict zones presented his military tactical gear brand, Spec-Ops, to the five sharks: Anupam Mittal, Aman Gupta, Namita Thapar, Vineeta Singh, and Amit Jain. His straightforward demeanour and unyielding attitude left a lasting impression on all the sharks, evoking both admiration and a hint of intimidation. This was evident as the retired officer managed to secure a valuation tenfold higher than initially offered, showcasing his unwavering negotiation skills and refusal to yield to the sharks' demands.
Originally, he sought Rs 80 lakh in exchange for a 2 per cent equity stake. He explained that his current sales focus on military tactical gear, including combat shirts, cargo pants, and regular T-shirts, primarily targeting Army officers. However, his vision extends beyond this, aiming to transition his brand into a B2C (business-to-consumer) model that also caters to civilians. This proposition intrigued Anupam and Aman. However, Namita posed a fundamental question: How does he plan to sell to officers without government contracts? In response, he shared that during his time in the Army, 80 per cent of his personal clothing was sourced privately, which enlightened him about the market's potential.
The founder openly acknowledged his intention to leverage his appearance on Shark Tank for publicity. Aman expressed his admiration, stating, "What you’ve said just now, so many people come here and lie about. That’s the Army honesty in you." Namita agreed, remarking, “Straight shooter, in both ways.”
The sharks were further impressed when the founder disclosed some financial figures. He revealed that his sales for 2023 amounted to Rs 6.2 crore, with a projected increase to Rs 8.5 crore for the current year. However, he faced difficulty providing certain intricate details about profit margins, as Anupam inquired. "Frankly, I don’t know. My finance knowledge is limited," he confessed. Anupam countered, saying, “Don’t say that; you’ve created a business doing over Rs 6 crore in sales; you surely know something.”
The Rs 40 crore valuation proposed by the founder piqued Aman's interest. Meanwhile, Namita was the initial shark to withdraw from the negotiation, stating that scaling up the business would be a challenge.
Despite his reservations, Aman extended an offer valuing the company at Rs 2 crore. The founder appeared taken aback. “The sort of valuation you’ve offered me, if we were not on this platform, I wouldn’t have even entertained. I don’t want to sound rude because it’s difficult to understand the nitty-gritty of a business in such a short time. But right now, I’m getting an order for Rs 8 crore, which I’ll execute in three months,” he said.
This sways Aman's perspective. "I'll adjust my valuation," he said, revising it to Rs 15 crore. "I see the potential for virality in this emerging market, and that's the risk I'm willing to undertake," Aman remarked, prompting the founder to chuckle incredulously. "At Rs 15 crore, there's hardly any risk involved, I must say..." This remark elicited laughter from both Vineeta and Namita.
"Straightforward indeed!" Namita remarked though the founder's demeanour turned serious. "Perhaps I've taken this personally. Maybe I'm interpreting this as the value you're assigning to me," he reflected.
Vineeta attempted to reassure him, stating, "No, sir. We're solely focused on maximising our returns. This valuation isn't a reflection on you."
Once again, Aman found himself swayed. He turned to Amit, inquiring if he'd consider a joint offer. Together, they proposed Rs 40 lakh for a 2 per cent equity stake, along with an additional Rs 40 lakh in debt at 12 per cent interest for two years. Aman timidly questioned the founder about his opinion but appeared reassured when the founder expressed willingness to glean insights from both Aman and Amit.
Ultimately, although receiving a valuation half of his initial expectation, it marked a tenfold increase from Aman's initial offer.