Krish Himmatramka's engagement ring company, Do Amore, sounds like any investor's dream: Its diamond products are ethically sourced and thoughtfully produced, and the business makes a lot of money.
The company brought in $11.5 million in 2021 revenue, eight years after launching in 2013. But on Friday's episode of ABC's "Shark Tank," Mark Cuban rejected Do Amore for one crucial reason: He foresaw competition, and didn't think Himmatramka's company could stand up to it.
"You deserve a lot of credit," the billionaire investor and entrepreneur said. "But that's hard to sustain, because anybody else can walk in the door and try to do the same thing. There are no barriers to entry to compete with you, and that makes it hard to invest."
Himmatramka started Do Amore, which he said was profitable, after going shopping for an engagement ring himself — and being put off by the moral price tag on some of the diamonds he found. Diamond mining is often environmentally unsustainable, and diamond miners have a long history of being underpaid or exploited for their labor.
The experience resurfaced a childhood memory for Himmatramka: When he was young, in India, Himmatramka watched a child die from water poisoning. Seeing firsthand how a lack of clean water could impact communities stuck with him as he built an engineering career, learning that clean water was often available to those communities — they just needed resources to be able to drill for it.
So, Himmatramka set out to build a company that could help address both issues simultaneously. He took $18,000 from his savings to launch Do Amore, striving to source natural or lab-created diamonds from ethical places with sustainable practices. As of the episode's taping, the company has also given back 20.5% of its net profits to help build clean water wells in nine different countries.
At the time of the taping, the company had made $26 million in lifetime jewelry sales. Himmatramka said he wanted more financial help to expand its distribution and marketing, and asked the Sharks for $600,000 in exchange for 6% of Do Amore.
Cuban was one of the first Sharks to reject the deal, explaining that while he was impressed by Do Amore's revenue and philanthropy, he thought any engagement ring company could simply start donating a percentage of sales to charity — negating Do Amore's competitive advantage.
"I don't think just anyone can add [charity] to what they're doing," Himmatramka retorted.
At least a couple Sharks agreed with Himmatramka. First, Kevin O'Leary offered $600,000 for 6% of Do Amore, with a $100 royalty on each sale until he made back three times his investment. Lori Greiner advised Himmatramka to take the offer, noting O'Leary's experience in the wedding industry.
But Himmatramka expressed hesitancy, countering with $600,000 for 10% with no attached royalty. "What do you think I do with all of my companies?" O'Leary asked. "I reduce their customer acquisition costs. That's what 'Shark Tank' is all about … I know this space inside and out."
Then, guest Shark Daniel Lubetzky, founder of snack company Kind, jumped in, offering $600,000 for 15% of Do Amore. Himmatramka countered with 12%. Lubetzky said he wasn't willing to budge, but would donate the difference between their offers — 3% — toward Do Amore's social mission.
Neither Do Amore nor Lubetzky immediately responded to CNBC Make It's request for clarification regarding the donation.
Himmatramka accepted Lubetsky's offer. "Daniel understood what we're trying to do," Himmatramka said. "Daniel's entire life's work has been social impact … We're going to bring so many people clean water and sell so many rings."
