When Investor Likability Can Make or Break a DealWhy two grandmothers chose personality over money for the shark's investment in their candy business.

Editor's Note: This series examining the deals presented on the popular ABC television showShark Tankthrough the eyes of a venture-capital investor.

The most interesting pitch of the week was for Ice Chips Candy.Ice Chips Candyis a small manufacturer of sugar-free hard candy. The founders, Beverly Vines-Haines and Charlotte Clary are two grandmothers who hit on a way to make hard candy from a new alternative sweetener called Xylitol. Ice Chips candy comes in a variety of flavors and are shaped in irregular chips because they are made in a sheet and then smashed with a hammer to make bite sized pieces.

The company sought $250,000 for 15% of the company in order to switch manufacturing from a manual process to an automated one.

Ice Chips has been seeing terrific growth, both from existing accounts and new accounts. It did $324,000 in revenue last year and is profitable and on track to do two to three times that this year, mostly selling through health food stores and dentists.

Due to its growth and profitability, Ice Chips was popular with the sharks, who were all very positive on the company.

Barbara Corcoran was the first to make an offer, offering to invest half of the $250,000 required in return for 33% of the company. To raise the full $250,000, the founders would need to give up 66% of the company. In return, Corcoran guaranteed that she could get the candy into 3,000 big box stores.

Kevin O'Leary offered to take the other half of the deal, but suggested that they get 20% equity each instead of 33% each. Corcoran said that she'd do that deal, but not with O'Leary. Mark Cuban said that he'd do it instead as he thought that Corcoran worked very well with consumer products.

Daymond John then jumped in and offered to invest the $250,000 for 30% of the equity. O'Leary suggested joining John, but instead of giving up 30% the company would give up 35% since the company would get the benefit of two investors instead of one. John initially accepted the partnership, but when it became clear that the founders did not want to work with O'Leary, he ditched him and suggested $250,000 for 25% ownership on his own.

Related:On Sharks, Scrubbies and Why Money Isn't Everything

The two founders elected to work with Corcoran and Cuban, thereby taking far more dilution (40% vs 25% ) and half the pre-money valuation ($375,000 vs $750,000) of John's offer. The combination with their personalities was best, although this may not be the best business decision.

The way this played out was very interesting. The founders elected to take a worse economic decision because they liked the investors more, and because the investors offered concrete ways to help.

Both elements are important. In a hot deal, the investors are competing with each other to sell a commodity. The entrepreneur has to decide from whom to take an investment, based not just on price, but also on whom they think they will be able to work with more easily.

The typical time between a Series A investment and an exit is around seven years. That's a long time to be working with someone if you don't like him. Personality compatibility is a very important factor. And O'Leary did not act in a very likeable way over the course of the pitch. Not just to the founders, but also to Corcoran, who refused to co-invest with him.

There is one other key consideration. Which investor will help the company grow faster and better realize its potential? In this case, Corcoran was the only person who offered concrete help beyond money, she offered to get the candy distributed into 3,000 big box retailers. That is a material benefit.

Related:Shark Tank's Lessons in the Art of Negotiation

Although the founders took a deal that valued the company at half of their alternative, I think that they made the right decision in the long run.

To see a breakdown of the other three companies that pitched on Friday, see the analysis at theLightspeed blog, which discussed failing fast, and being prepared for your pitch.