In the latest episode of “Shark Tank,” Christopher Gray, the cofounder and CEO of scholarship database company Scholly, left the Tank with a big smile. He'd just gotten the exact deal he wanted with two Sharks, Lori Greiner and Daymond John.
The investors, on the other hand, weren't so happy. Left by themselves, a yelling match ensued that caused Robert Herjavec, Kevin O'Leary, and Mark Cuban to walk off the set in disgust.
The Sharks regularly battle each other for deals, but it was the first time a fight got personal. We asked Greiner and Gray to break down exactly what happened and provide their perspectives on the events.
In the season six segment, Gray walks into the Tank asking for $40,000 for 15% of his company. He explains that $100 million in scholarships go unused every year, and that Scholly is a simple smartphone app that matches students with hundreds of higher education scholarships they can apply for, tailored to their demographic and home state.
Gray and his two siblings were raised in Birmingham, Alabama by a single mom with a low income. Budgeting was so tight that despite his high GPA and test scores, he could not apply everywhere he wanted to for college due to application fees. But with some digging, he was able to get a whopping $1.3 million in scholarships, including a full ride from the Bill and Melinda Gates Foundation.
He enrolled at Drexel University and built Scholly with web developers Nick Pirollo and Bryson Alef. It's been less than a year and the Scholly team has had 92,000 app downloads for 99 cents each.
Every investor is interested, and John and Herjavec, who both grew up poor, tell Gray they can relate to him and admire his tenacity.
Greiner makes an offer in what seems like a few minutes into Gray's pitch. She tells Business Insider it was actually about 10 minutes in real time, before editing. Either way, it's very fast for the show, where it usually takes about an hour for all of the investors to decide if they want to make a deal or not.
“You know what, Christopher?” Greiner says. “I'm going to do something I've never done before. I haven't heard a whole lot, but I'm going to make you an offer right now.” She offers exactly what Gray had asked for — $40,000 for 15% equity.
Cuban, frustrated, asks Greiner if he can first ask some real questions to learn about the company.
Greiner stays focused on Gray. “I believe in you. I believe in what you're doing,” she says, which gets the other investors visibly perturbed.
Gray expresses his appreciation but says he still wants to hear what everyone else has to say. Greiner clarifies that she's not even going to ask how he plans on scaling the company and making a profit.
Seeing how aggressive she's being, John jumps in and says he wants to invest because it's “personal” for him. He wasn't able to go to college, he says, because he lacked funds and needed to support his family, and he wants to help give others an alternative. He and Greiner eventually decide to split the offer 50/50. Gray says he'd still like to hear from the others.
Herjavec, the founder of a large cyber security firm, and Cuban, a serial tech entrepreneur and investor, understand the smartphone app business very well and want to know more about how Scholly's algorithm works and what the developers' skillsets are.
It's also deeply concerning for them and O'Leary to discover that there are only between 10,000 and 20,000 scholarships in Scholly's database. Cuban and Herjavec need to know more to determine if they can scale the business. Greiner starts talking over them to say she and John don't even care about those questions. John sticks with her and says they'll figure it out as they go, and work with the other “Roberts and Mark Cubans of the world” to help them.