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    Shark Tank India: reviews a co-founder but not his company for its unjust shareholding structure

    • Gavin Paris is street wear fashion brand creating gender neutral oversized clothing.
    • In just 7 months of operation, the startup achieved a turnover of ₹1.4 crore – thanks to the marketing genius of co-founder and CTO, Ashutosh Roy, who has 0% equity in the company.
    • While impressed with the startup’s sales and product quality, the Sharks backed out due to the unfair shareholding structure between the co-founders.

    Often it is not only the product that wins over the Shark Tank India panel, but also the person pitching the product. Something similar happened when founders Kishor Jairamka and Ashutosh Roy pitched their streetwear fashion brand, Gavin Paris, at Shark Tank India season 2 on Monday, February 6.

    What was surprising, however, was that most of the judges on the panel offered to invest in Roy, not Gavin Paris, for another startup he could run.

    All Sharks were quite impressed with Roy’s marketing skills and shocked by his almost non-existent shareholding in Gavin Paris. Consequently, he received not one, but two funding offers – from CarDekho.com co-founder Amit Jain and boAt co-founder Aman Gupta.

    “Ashutosh, if you ever want to start a business, contact me for money,” Jain noted. Gupta added, “If he (Jain) doesn’t care much, come to me!”

    Co-founder with no equity ‘practically run the company’

    Founded in 2022, Gavin Paris is a Kolkata-based startup that creates gender neutral oversized clothing. Capitalizing on the current popularity of oversized fashion, the startup generated a turnover worth ₹1.4 crore in just 7 months of operations – selling only on their own website.

    And that was mainly due to Roy’s marketing genius.

    Roy, 26, and Jairamka, 40, are family friends. Roy, who serves as the company’s chief technology officer (CTO), is a BTech graduate who founded his own start-up, TechOrion, in his sophomore year of college — and ceased operations in 2021.

    Jairamka, meanwhile, runs a 15-year-old family business – a packaged drinking water factory, which is currently run by his younger brother.

    Roy said that the monthly spend on digital marketing (on Facebook and Instagram) was somewhere between ₹ 5-6 lakh. Moreover, in just 7 months of operation, the startup had 115,000 followers on Instagram.

    “You (Roy) do the marketing on the website – you practically run the whole company,” added Amit Jain.

    Upon further investigation, the sharks realized that while Roy was clearly the reason behind Gavin Paris’ phenomenal sales, he had no stake in the company – 100% equity was with Jairamka, who had invested ₹50 lakh in the company.

    “I have 100% equity. Ashutosh has a commission model – later, when we register the company, we discuss equity. We verbally agreed on 10% equity (for Roy),” Jairamka said on the show.

    Roy shared that he receives ₹25 as commission per product which translates to a monthly income of ₹1 lakh.

    “There are two parts of your company’s backend, i.e. production, that you (Jairamka) handle. Second is value creation, which includes technology, marketing and user understanding – it is most important and captures more value, which is handled by Ashutosh. The man responsible for value creation, you kept him on a commission model,” said Anupam Mittal, founder of Shaadi.com.

    ‘Robbed the child blind’

    The sharks were impressed with the quality of the products and the nominal prices, but expressed concern about what they perceived as an unfair distribution of equity.

    Roy not only handled the marketing, but also answered many of the questions the sharks asked about the startup – from the vision for the future to the target audience, profit margins and even the challenges the company faced.

    While Jain noted that Jairamka “blindly robbed the kid”, Mittal believed that even the proposed stock split was unjust.

    “You (Roy) seem very naive to me, and you (Jairamka) seem too smart. What is happening in my opinion is unjust… Ashutosh, I think you should sit with him (Jairamka) and stand up for your rights. Stand up for yourself and demand what you deserve,” Mittal said as he retired from investing.

    Namita Thapar, executive director of Emcure Pharmaceuticals, also backed down because she didn’t believe the product had a strong USP to scale in a messy market. Jain, meanwhile, backed out as he did not believe that Jairamka understood the importance of his co-founder.

    “The day he (Roy) leaves, your business will close. How do you generate business without digital marketing and technology? Where are you going to sell?” Jain noted, also adding that he felt Roy deserved a fair share of the equity.

    BoAt co-founder Gupta also backed out, but advised Roy not to lose sight of the important things – and even made him an offer to continue on his own.

    “Fight him. Quit working and take the stock. If he does not agree, I have an offer for you – start the same business with me. Please think of yourself,” Gupta said.

    Jain also made the same offer as Gupta, again adding that Roy’s marketing skills were really commendable. However, Sugar Cosmetics co-founder Vineeta Singh made an offer for Gavin Paris – ₹ 30 lakh for 10% equity and ₹ 20 lakh in debt at 12% interest – but on the condition that Roy has an equity of 40% % received stake. This valued the company at ₹1.5 crore.

    However, the deal fell through because Jairamka Roy did not want to offer a 40% equity stake.

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