Additional Coverage:
- ‘Shark Tank’ contestant turns down $200,000 offer from Mark Cuban, later builds million-dollar business (marketrealist.com)
“Shark Tank” Hopeful Rejects Mark Cuban, Builds Multi-Million Dollar Empire
Facing the Sharks on the hit show “Shark Tank,” entrepreneurs put their all into securing a life-changing investment. Sometimes, however, walking away from a deal proves to be the best move. Such was the case for Derek Pacque, founder of CoatChex, a ticketless coat check system.
Seeking $200,000 for a 10% stake in his company, Pacque emphasized his commitment, stating, “I have risked a lot to turn this business into a career…getting a deal with the sharks is exactly what I need.” He presented his computerized system, utilizing facial recognition to match coats with their owners.
Pacque’s plan was to franchise the technology to bars and nightclubs, allowing them to easily implement coat check services and generate additional revenue. He touted the success of a trial run during Super Bowl week in Indianapolis, claiming to have earned tens of thousands of dollars.
However, he faltered when questioned about overall sales, admitting the technology was still in its early stages, being developed in partnership with his college professor.
Pacque’s franchise-focused strategy drew criticism from the Sharks. Mark Cuban deemed his plan to sell to area developers a “horrible idea,” questioning its viability.
Kevin O’Leary dismissed the business as seasonal, while Barbara Corcoran and Daymond John considered the system overvalued. Robert Herjavec, intrigued by the existing patent, initially showed interest but ultimately declined to invest.
Cuban then offered $200,000 for 33% of the company. After consulting with his professor, Pacque countered with a 20% offer, which Cuban rejected.
Pacque later admitted his shock at turning down the prominent investor.
Despite not securing a deal on “Shark Tank,” Pacque rebranded his venture as Chexology. The company has since flourished, growing into a multi-million dollar business valued at $7 million. Chexology now operates in a variety of venues, including nightclubs, museums, Barclays Center, House of Blues, hotels, and restaurants, proving that sometimes, the biggest risk leads to the biggest reward.