On Sunday’s “Shark Tank,” a former high school science teacher and entrepreneur was on a mission to save man’s best friend from the crippling effects of aging.
Aaron Hirschhorn is the founder of Gallant, a company that specializes in veterinary rejuvenative therapy and storing a pet’s stem cells for later use in life. Hirschhorn became a believer in the science after doctors used stem cell therapy to treat his bad back. He then watched as his family dog, Rocky, suffered from debilitating arthritis, and wondered why there wasn’t a similar treatment for pets.
To help him pitch his company, Hirschhorn brought along a group of puppies for the sharks to hold.
“If you were to flash forward just 10 short years, four of five of these little guys are going to suffer from devastating age-related ailments like arthritis, blindness or worse,” Hirschhorn said as someone dressed like the grim reaper appeared to collect the puppies. Shark Mark Cuban refused to give up his puppy, Fred.
But what was even more terrifying for the sharks than the grim reaper was Hirschhorn’s valuation of Gallant at $25 million. He was asking for $500,000 for just 2% of his company. The sharks groaned as shark Daymond John lamented: “This is not going to end well.”
Hirschhorn has previous experience with turning a profit. After becoming unemployed in 2009, he and his wife started a dog-sitting platform similar to Airbnb that generated more than $100 million before they sold it off to a larger company.
Gallant has two divisions: a therapeutics division developing new stem cell treatments and a banking division, where customers store their pets' stem cells after a routine spray or neuter.
When it came to stem cells, shark Kevin O’Leary was thinking about himself: “Screw the dogs, I’m going to do this myself.”
“You would have to be neutered first,” guest shark Anne Wojcicki replied.
The company’s business model made Wojcicki, the co-founder and CEO of 23andMe, nervous. Gallant charged customers $95 a year, but including payment to the veterinarian, each stem cell kit cost Gallant $375.
“For every sale you have, you’re losing money. You’re going to sink because you’re not going to have cash flow to support that,” Wojcicki said. “It makes me really nervous you’re going to lose money on every single kit that's going out the door, and it’s going to be a couple years to recapture.”
That was enough for John to decide to pass on the company: “Let me tell you something: If Anne’s nervous, I’m out.”
In classic Mr. Wonderful fashion, O’Leary made multiple-choice offers. Hirschhorn could choose either $500,000 for a 2% stake plus an additional 2% in options, or $500,000 for a 1% stake plus a royalty of $10 per kit sold in perpetuity.
“That gets me so incentivized to sell these kits for you. You have no idea,” O’Leary said.
While she still had her reservations about Hirschhorn’s price model (preferring he increase the price of the kits), Wojcicki partnered with fellow shark Lori Greiner to make an offer. They would give Hirschhorn the $500,000 for 8% of his company.
“I got employees I’ve given a lot of equity,” Hirschhorn said. “I got top scientists who basically took a chance on me. I’ve got to protect them, too.”
His counteroffer was for 4% of the company before the three settled on 5% and made a deal. Holding puppy Fred, whom he'd rescued from Cuban and the grim reaper, Hirschhorn was ecstatic to be partnered with the two, saying: “You can see even Fred’s happy.”
This article originally appeared on USA TODAY: 'Shark Tank': Sharks consider stem cell tech for man's best friend