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 alter.

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’ll be able to 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 have got one thing that’s utterly differentiated you journey that and also you don’t do the rest as a result of that dilutes your efforts.”

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

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

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

For the reason that different Sharks had but to supply their very own bids, Co Chan wished to listen to from Mark Cuban and Barbara Corcoran. Co Chan mentioned 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 provided O’Leary 5% fairness for $400,000 and a 50-cent royalty for every unit bought by the corporate as much as $500,000. O’Leary countered with an $800,000 provide for 10% fairness and a $1 royalty on every unit.

As the 2 went backwards and forwards, Mark Cuban appeared to alter his thoughts. He began to shift to Youthforia’s facet of the negotiations, and mentioned, “She’s acquired $2.1 million in gross sales in a 12 months. That’s not nothing.” He stepped in and provided $400,000 for 10% with out a royalty.

Mark Cuban wished that he knew extra in regards to the make-up business since there gave the impression to be an actual deal in Youthforia and he wished to offer the best steerage 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 provide for 7.5% and a 75-cent royalty on gross sales as much as $1 million. In the end, Mark Cuban acquired Co Chan to just accept his ultimate provide 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 elements with modern 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 clients’ 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 relationship 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 thought of constructing make-up that works like skincare.”

Youthforia presents face wash, blush, gloss, primer and setting spray, which Co Chan mentioned 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 present clients 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 staff he owns, are seemingly to make use of. It’s a secure guess that Mark Cuban is not going to use merchandise made by Youthforia.

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

She mentioned, “An enormous motive why I made a decision to go on ‘Shark Tank’ is as a result of after we filmed, it was proper earlier than we have been launching nationwide in Ulta Magnificence.”

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

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