Mark Cuban’s First-Ever Investment in the Makeup Industry

You don’t all the time see the phrases Mark Cuban and make-up in a single sentence, however that’s about to vary.

On the investing present “Shark Tank,” the billionaire investor made his first-ever deal for a make-up model after initially rejecting the corporate.

The choice to speculate got here after a lot deliberation. Youthforia, a beauty firm owned by Fiona Co Chan, is a brightly coloured assortment that calls itself “make-up you may sleep in.”

The model is focused at Gen Z. Mark Cuban was clear about why he opted out of investing within the firm, and acknowledged, “When you may have one thing that’s utterly differentiated you trip that and also you don’t do anything as a result of that dilutes your efforts.”

“When you may have one thing distinctive you play that edge. And that sort of made me query how efficient your main product was,” Cuban added.

Nonetheless, Kevin O’Leary, Mark Cuban’s colleague on Shark Tank, thought in any other case. He supplied Co Chan $100,000 for 20% of the corporate together with a $300,000 mortgage and a lower of distribution pay.

He praised Co Chan and stated, “It’s a wager on the jockey on this deal. You’re actually spectacular.”

Because the different Sharks had but to supply their very own bids, Co Chan wished to listen to from Mark Cuban and Barbara Corcoran. Co Chan stated the corporate was set to launch extra shades of blush, failing to catch the 2’s curiosity.

O’Leary and Co Chan then started negotiating phrases. She supplied O’Leary 5% fairness for $400,000 and a 50-cent royalty for every unit offered by the corporate as much as $500,000. O’Leary countered with an $800,000 supply for 10% fairness and a $1 royalty on every unit.

As the 2 went backwards and forwards, Mark Cuban appeared to vary his thoughts. He began to shift to Youthforia’s facet of the negotiations, and stated, “She’s obtained $2.1 million in gross sales in a 12 months. That’s not nothing.” He stepped in and supplied $400,000 for 10% with no royalty.

Mark Cuban wished that he knew extra concerning the make-up business since there appeared to be an actual deal in Youthforia and he wished to offer the precise steering for the corporate.

Nonetheless, he shared that he was within the make-up model as a result of his daughters and spouse would “perceive” the product, even when he didn’t.

O’Leary countered with a $400,000 supply for 7.5% and a 75-cent royalty on gross sales as much as $1 million. Finally, Mark Cuban obtained Co Chan to simply accept his ultimate supply of $400,000 for 8% and no royalties and ended up beating O’Leary.

Mark Cuban’s curiosity in Youthforia, which goals to mix eco-friendly components with revolutionary formulations, has advantage.

Launched in April 2021, the hybrid make-up and skincare firm had $2 million in gross sales earlier than showing on Shark Tank.

TikTok contributed a lot to the corporate’s viral success, with mentions of its color-changing oil blush that reacts and blends into prospects’ pores and skin.

Youthforia has  135,200 followers and over 4 million likes on TikTok, in addition to 61,700 followers on Instagram.

Co Chan created Youthforia after realizing that her pores and skin was affected by pollution from the locations she traveled for work in gross sales at a tech firm.

She shared, “After I first began courting my husband, I used to all the time sleep in my make-up. I’ve had experiences previously the place I’ve gone to the hospital with allergic reactions from sleeping in make-up and that’s after I got here up with the concept of constructing make-up that works like skincare.”

Youthforia provides face wash, blush, gloss, primer and setting spray, which Co Chan stated is secure sufficient to go to sleep in.

One of many model’s standout merchandise is the BYO blush, a color-changing blush oil that reacts to the pores and skin’s pH to provide prospects the right shade.

Mark Cuban might have additionally damaged one in every of his personal guidelines on this first-ever funding within the make-up business.

He likes to put money into corporations with merchandise that he or members of the Dallas Mavericks, the Nationwide Basketball Affiliation group he owns, are probably to make use of. It’s a secure wager that Mark Cuban is not going to use merchandise made by Youthforia.

Co Chan later shared on Instagram that taking part within the present supplied publicity as she expanded the model’s presence at retail.

She stated, “A giant purpose why I made a decision to go on ‘Shark Tank’ is as a result of after we filmed, it was proper earlier than we had been launching nationwide in Ulta Magnificence.”

The funding is predicted to spice up the following section of Youthforia’s evolution, together with the launch of non-color-changing blush shades. 

Watch the video beneath and see for your self the second Mark Cuban got here again to the negotiating desk: