Why These Entrepreneurs Turned Down $30 Million From Mark Cuban
The founders of dating website Coffee Meets Bagel swiftly rejected the largest offer in Shark Tank history.
By Graham Winfrey@GrahamWinfrey
(L-R) Coffee Meets Bagel co-founders Soo, Arum, and Dawoon Kang.
Courtesy ABC
Shark Tank host Mark Cuban offered a jaw-dropping $30 million to three sisters for their dating website during Friday's episode, but more surprising than the offer itself was how fast the sisters rejected the deal.
Entrepreneurs Arum, Dawoon, and Soo Kang came to the tank seeking $500,000 for 5 percent of their company, Coffee Meets Bagel. Unlike most online dating sites, Coffee Meets Bagel uses Facebook profile information to recommend romantic matches based on users' friends of friends, and gives singles just seven days to make contact. Dawoon met her current boyfriend on the site, while Arum is married and Soo is still using the site's services.
"Single women are tired of signing up for dating websites only to get hit on by creepy strangers bombarding them with disgusting messages," Dawoon said.
Amazingly, when asked how many people were using the dating service, the Kangs refused to share a specific number, saying the app had between 100,000 and 500,000 users.
"If you want an investment, you can't not tell us," said Cuban, who quickly opted out of a deal.
After learning more about the company's growth, however, Cuban asked if the Kangs would sell the entire business for $30 million, an offer they immediately declined.
"He offered you $30 million and you didn't even flinch!" exclaimed shark Robert Herjavec.
So why did the Kangs turn down the largest offer in Shark Tank history?
"We see this business growing as a big as Match.com," Dawoon said. "They're becoming a billion-dollar-revenue company, and we think this model and the product has potential to be as big as Match."
While growing to the same size as Match.com may sound like an ambitious goal, the Kangs had already secured $2.8 million in funding from investors including Match.com co-founder Peng Ong. The sisters, all of whom are in their early 30s and emigrated to the U.S. from South Korea as teenagers, have degrees from Harvard Business School, Stanford Business School, and Parsons School of Design. Each of the Kangs left a job paying six figures to found the company in 2012.
"It's a newer, ephemeral version of Hot or Not, which is brilliant," Cuban said.
None of the sharks felt comfortable investing half a million dollars for just 5 percent of the company, however, so the Kangs left empty-handed.
Stay tuned for another episode recap this week following a special episode of Shark Tank on Tuesday.