The Walk Away — Why I Turned Down a Deal on Shark Tank & What Happened Next | Pashion Footwear
I truly can’t explain what a surreal experience it is to be inside of the Tank. As someone who grew up watching Shark Tank, I’ve idolized the Sharks my entire career. I’ve visualized myself setting foot on that set hundreds of times. To actually find myself walking down that iconic hallway, standing yards away from entrepreneurs I’ve looked up to for over a decade, and presenting my insanely over-rehearsed elevator pitch about my company Pashion Footwear (i.e. my baby) and our convertible high heels was quite literally breathtaking. Going toe to toe with the Sharks during one of those intense Q&A sessions we’ve all seen on TV was overwhelming, to say the least.
Of course, I have dreamed of not only going on the show, but about going that extra mile and winning a deal. I’d been preparing with this singular goal in mind for months leading up to filming. I was determined to wow them, answer every single question with preparation, confidence and grace. I prepped for well over a thousand hours, and was confident my female-stacked panel of Sharks would jump at the opportunity to be a part of the convertible heel revolution.
In addition to my childhood dreams on the line — Pashion’s future was in jeopardy. We were 90 days away from being out of money and I didn’t just want a deal — I needed one.
My entire strategy going into the Tank was to negotiate on equity. My ask of $500k for 5% of the company gave Pashion a $10M valuation — which I believed to be extremely fair given the highly disruptive, defensible, and compelling nature of our design, partnered with strong sales and loyal customers. I, of course, appreciate the value a Shark brings to the table, and I was willing to adjust the value for the sake of getting a Shark in the door. To my delight — none of the Sharks fought me on the $10M valuation, but my negotiation strategy had been thrown out the window.
After battling it out in the Tank for over an hour, I found myself in the all-too infamous position….alone with Mr. Wonderful. Immediately, I knew I was in trouble with little leverage left to negotiate — and one of Kevin’s famous royalty deals was my only offer on the table.
I had made the decision going into the show that I had no interest in a royalty. The footwear industry is capital intensive — there’s no denying that — and I feel strongly that every single dollar we make needs to go back into the business — funding inventory, headcount, and marketing. It’s the only way we can grow.
I never would have guessed I’d be willingly walking away from a deal with a Shark. Or that I’d be standing here today, knowing that it was 100% the right decision for me.
Kevin’s deal in particular was a tough pill for me to swallow. His offer was to do my $500K for 5% (yay to that part!), but with a $5 royalty per pair paid back to $1M. Being in the Tank is very different than most investment discussions in the sense that you have to analyze and act on a deal in that exact moment. As I frantically tried to break the deal down in my head — I realized what it really came down to was a $500K loan to be paid at 100% interest, and I’d still have to cough up 5% of my baby. That also meant $1M going to a royalty rather than funding our growth. I couldn’t help but think how far $1M would go towards our operational needs. It simply wasn’t the right deal for me.
As those who’ve seen the episode know, I negotiated with everything I had — determined to find a way to make the deal work. I tried offering more equity, varying royalty amounts to help me mitigate the cash flow hit. I even tried to see if Kevin would be willing to put in more money to help me rectify the deal in my head. He refused to budge.
The pressure was on. I had to either accept a deal I didn’t believe in for the sake of survival, or find the courage to walk away. Kevin’s exact words were “You’re 90 days away from oblivion”. While I processed those words over and over in my head, I also knew I had overcome so much already and this royalty was one more obstacle I didn’t need in my way.
Exhausted, disappointed, and overwhelmed — I exited the Tank empty-handed. I did my best to keep my composure but couldn’t help but hear the voice in my head saying “what now, Haley?”. I already considered myself to be quite resilient, but proving Kevin wrong added fuel to my fire and I was determined to fight and come out on top in the end.
As I had eluded to in my segment, this was not a foreign situation for me. In 2019 I was blindsided when a bill for necessary production equipment came in much higher than had been forecasted. Unfortunately, this is one of the risks an entrepreneur faces when creating an entirely new product category. There was nothing on the market to use as reference for cost comparison and while we had done our best to project this cost, we budgeted incorrectly. With pre-orders we desperately needed to fill on the line, we went from having 6 months of cash in the bank to being $80K in debt and had 30 days to get back on track.
That experience was one of the most trying times in my journey as an entrepreneur. I pitched to anyone who would listen, trying to take rejection in stride and keep the paralyzing fear of failure from creeping into my mind. The sad reality is, only 2.8% of venture funding went to female-founded business in 2019 (which plummeted down to a meager 2.3% in 2020). One of the main reasons behind this is the massive gender disparity across the table — with only 12% of decision makers at VC firms being women. As a female entrepreneur pushing an extremely female-focused product, I found myself constantly dedicating half my allocated pitch time to attempting to convince the potential investors that the problem of high heel pain is a real, massive market. It’s been shown that female venture capitalists, when they are present, are twice as likely to invest in female founding teams. Why? They inherently relate to the problems many female founders are trying to solve. After all, the best entrepreneurs create solutions to problems they experience…it is undeniably helpful when those hearing the pitch experience the problem as well.
When female founders are able to receive funding, they’ve been statistically proven to be more successful — outperforming male founded companies by 63%. I think a large reason behind this phenomenon is the resiliency female founders are forced to foster in order to survive in the venture world. Those that make it do so by refusing to quit — and they carry that trait with them long after they are finally funded.
In 2019, I was able to secure a $1M deal on the 30th day — securing the capital I needed to purchase our production assets, get out of debt, and launch our ecommerce operation that June. Having survived that experience — I left the Tank shaken, but with confidence that I could do it again. I shoved any fears out of my mind, and got to work.
I’m incredibly proud to say that since my time in the tank, I got back up, dusted off my heels, and raised over $1M in *royalty-free* funding for Pashion. We formally crossed our $1M net revenue mark, grew our team to 6 full-time employees, grew our daily sales average 300%, welcome thousands of new #Pashionistas to our high heel revolution, and launched multiple new products…putting every single dollar back into the business so that we can continue on our mission to bring convertible high heels to women across the globe. Long story short, that 50% off sale isn’t happening anytime soon ;)
Even though I didn’t make a deal I’m so unbelievably honored to have had the opportunity to share a little bit about Pashion with the entire country. Truly, the value of being featured on the show is so incredible that every entrepreneur should apply….deal, or no deal. The future of Pashion is brighter than ever before and I firmly believe that is due to refusing to sacrifice on what I knew was right for my company. Good thing we have that extra $5/pair on hand so we can keep up with inventory!
If there’s anything to learn from my story it’s to trust your gut, stick to your guns, and fight for what you believe in. I strongly believe that the only thing separating entrepreneurs that make it from the rest is a heaping dose of resilience (even when the odds are stacked against you). I believe convertible high heels are the future of footwear and I believe in that too much for it to fail. I have no regrets about my decision to walk out of the Tank, and I encourage any and all entrepreneurs to go after this once-in-a-lifetime experience. If anything, walking away from the show without a deal empowered me even more to prove Kevin wrong and exceed that $500k goal. Over a million dollars later I suppose I owe him a Thank you after all.
