Daniel Lubetzky, founder of KIND Snacks, is joining the panel of regular sharks on “Shark Tank” to replace Mark Cuban. But before he became a business magnate, Lubetzky made a risky $220 million move that nearly cost him his company. It turned out to be the best decision he ever made.
In 2008, KIND was still a small player in the snack food industry. Lubetzky had just received a $16 million investment from a private equity firm, VMG Partners. The deal was that he had to sell the company within five years. It seemed like a solid plan at the time, but things took an unexpected turn.
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“Four years after the deal, I realized that Kind could be much bigger,” he told CNBC. Sales were rising, and Lubetzky felt the company had much more potential. But his investors were eager to cash in and pressured him to sell. Rather than give in, Lubetzky decided to buy back their shares. The problem was that he needed $220 million to do so.
The gamble of a lifetime
It was no small feat. Lubetzky had to scrape together corporate cash and take out millions in bank loans to make it happen. “Because I didn’t negotiate the terms of the buyout up front, it turned out to be very, very expensive — and very risky. It was a very painful negotiation,” he said.
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He could have lost everything if KIND sales had dropped even a little. He had sleepless nights knowing that any misstep could result in the loss of the business he had built from scratch.
But Lubetzky believed in KIND and decided to take the plunge. “I felt like we were just getting started,” he said. He was right. The company’s annual revenue nearly doubled that year, setting the tone for what was to come.
Lubetzky turned his $220 million gamble into a huge profit. By the time he decided to sell KIND to Mars in 2020, the company had amassed an astonishing $5 billion valuation. He credits KIND’s success to his decision to buy back his company.
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“If we had sold in 2013, KIND might have gotten lost in a big corporation,” he explained. Instead, he kept the company independent and grew it into one of the world’s most recognized healthy snack brands.
He wishes he had known then that when you’re negotiating with a private equity firm, it’s not “their way or the highway.” When you bring investors into your company, it’s no longer entirely yours. “You have to remember that it’s now a company that you and others own,” Lubetzky shares.
As a new regular on “Shark Tank,” Lubetzky will bring the same boldness and entrepreneurial spirit to the show.
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Why Mark Cuban Left
After more than 10 years as a regular guest on the show, Mark Cuban decided to leave “Shark Tank” to spend more time with his family. After years of balancing business and TV appearances, he wanted to focus on spending more time with his wife and three children before they left to live their own lives.
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This article The new Shark Tank star replacing Mark Cuban once made a $220 million blunder that turned his startup into a $5 billion powerhouse originally appeared on Benzinga.com
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