Inside Dating App Hater’s Shark Tank Deal With Mark Cuban

Last Valentine’s Day, Goldman Sachs alum Brendan Alper, 30, launched his new dating app, Hater, which matches people based on what they hate rather than what they love. Users can swipe on thousands of topics, from Kim Jong-un to ketchup on hot dogs. The app’s algorithms recommend the most compatible matches. On a segment of ABC’s hit business pitch show Shark Tank that aired November 26, Alper struck a deal with Mark Cuban. The billionaire Dallas Mavericks owner pledged to invest $200,000 in lesbian video chat exchange for a 10% stake in the company, valuing Hater at $2 million. Just before the show taped, Alper had raised $500,000 from a venture firm called Sweet Capital, which bought a 12.5% stake, valuing the company at twice as much. Based in London and Stockholm, Sweet Capital is run by the founders of the company behind the hit mobile game Candy Crush.

Brendan Alper: I graduated from Brown and went straight to Goldman Sachs but I quickly realized it wasn’t the life I wanted, being a cog in the machine. Six years in, I worked up the guts to quit and decided to become a comedy writer.

Alper: Very early on, one of the ideas I had for a comedy sketch was based on Hater, a dating app that matched people based on what they hated. The more I told people about it, the more they said, I would totally download that if it were a real app.

We’d go to brands like Starbucks and we could tell them that 18-year-olds in the Northeast region who love Starbucks also love coconut milk and they also love a particular kind of music

Alper: I used my savings and cashed in my 401(k). We also raised $100,000 over the course of two years from friends and family, which was just enough to build the app.

Alper: Right now, the app is free but we’re experimenting with a few different monetization strategies. One would be to sell data. The other strategy is the more traditional dating app approach of charging for premium subscriptions.

Alper: There are a lot of questions about brands in the app already already. There are 4,000 topics. They range from politics, like Trump and Kim Jong-un, to questions about Starbucks, Ford and United Airlines.

Alper: We can sort the order. People typically answer a few hundred each. We can promote certain ones at the top.

Alper: We were basically out of money but very early on I knew the only way we were going to survive in a crowded space was to make a giant splash. Sam Terris, head of PR, was my first hire. He was a publicist at Random House and my friend’s little brother. We created a viral pitch, timed for Valentine’s Day 2017. That shot us out of the gun.

Alper: We did that on Valentine’s Day as well. It was a projection, not a billboard. A friend runs a projection company. It cost $1,000.

Alper: The whole application process is very difficult and lengthy. They don’t want us to talk about the different steps they require you to take but you have to provide information, and pass tests at various rounds to proceed to the next stage.

Alper: Very stressful. Being abruptly put in front of all the sharks and being asked to perform is hard. We rehearsed the pitch 100 times. But you don’t know what they’re going to ask. None of that is scripted.

Alper: How are you going to make money and what are you going to do about growth? Why should we invest in you based on your relatively small number of users compared to other apps? We have 750,000 users worldwide.

Adams: I can see why the sharks would be skeptical, when Match has 21 million users. How can you compete?

Alper: Our app isn’t just for dating. It’s for meeting in a social capacity. We can’t compete purely from a numbers perspective.

Adams: Why did you do a deal with Mark Cuban when other sharks were offering you more money? Barbara Corcoran wanted to give you $250,000 for a 5% stake, which would have given you a much higher valuation.

Alper: To be honest, the one thing we didn’t really prepare for was picking a shark. It’s a strange thing to have to make a decision in 10 seconds. Also we’d just closed a $500,000 investment from another investor so the money didn’t matter so much to us.

Adams: But your other deal valued the company at twice the amount Mark Cuban’s offer did. Why dilute the value of your company so much?

Alper: There are a lot of unique benefits that come from working with the right person that can offset the dilution from a relatively small investment. I thought e and his celebrity would help get the word out about Hater. Also I also don’t believe that a Shark Tank valuation represents our true valuation.

Adams: How did your other investors react to you selling a stake to Mark Cuban for half of what they paid?

In this interview, which has been edited and condensed, Alper talks about his contrarian approach to dating, how tough it was to pitch to the sharks and why he sold a stake to Cuban at a bargain rate

Alper: We had to sign a non-disclosure agreement so I can’t talk about it. But it’s being worked out now.

Adams: What do you say to people who suggest that Hater is a gimmick and not based on any empirical evidence about compatibility?

Alper: Our No. 1 goal is to offer something that’s a lot more fun than the other options out there. We kept hearing that online dating seemed like a chore. You swipe, swipe, swipe, then you go out on a crummy date and then you start over.

Alper: We were in mutual friend groups. Online dating is a great resource for people who don’t have the time or don’t like meeting people in real life or who have very specific requirements for a partner. But I believe there’s no substitute for real life.