Everyone wants the American dream, owning your own business. You may see a product and think “I should have invented that!” ABC has created a show called Shark Tank which allows entrepreneurs the opportunity to have millionaires/billionaires invest in their business.
The Plot: Shark Tank
(from Forbes.com) Shark Tank is produced by Mark Burnett. Daymond John, Kevin O’Leary, Robert Herjavec, Barbara Corcoran, Kevin Harrington, Mark Cuban, and Lori Greiner are the show’s regulars.
“Daymond John is a fashion and branding expert who grew his homemade hats and t-shirts into the globally recognized brand Fubu. Kevin O’Leary (who calls himself Mr. Wonderful on the show) is a venture capitalist that started a software business in his basement which he eventually sold for $3.2 billion dollars. Robert Herjavec, the son of an immigrant factory worker, is a technology mogul who sold his first internet companies for over $350 million dollars. Barbara turned a thousand dollar loan into a real estate empire worth hundreds of millions in Manhattan. Kevin Harrington is the Chairman of As Seen On TV, Inc, a public company trading as ASTV. Mark Cuban is a self-made billionaire entrepreneur, the owner of the 2011 NBA Champion Dallas Mavericks and author of How to Win at the Sport of Business. Finally, Lori Greiner is regarded as one of the most prolific inventors of retail items, having created over 350 products.”
Corrin and I love watching Shark Tank. Corrin used to reward her Economic students by showing clips of Shark Tank and incorporate the different economic terms in the classroom. I am always wondering which items were successes and which ones were failures. My sweet sister Michelle bought Corrin and I each one the Monkey Mats after she saw it on Shark Tank. It is a very neat blanket (with weights on the edges that folds up into a small pouch.
As I watch Shark Tank, I wonder which deals actual get made (with the terms shown on TV) and which deals fall through.
The Real Scoop:
According to (cnet.com), just because an entrepreneur makes a “deal” with a shark during an episode doesn’t mean the deal actually goes through. In 2012, owner of You Smell Soap made a deal with Robert Herjavec: $55,000 for 20 percent of her company, with a $50,000 salary for a year. Megan Cummins, owner of You Smell Soap tried to contact Herjavec several times to close the deal but he wouldn’t return her phone calls. Apparently both the contestant and the investor have the opportunity to back out of the deal. Cummins still is in business, one reason being her appearance on Shark Tank. It has been a hard road for her but she has her products in several major retailers.
Airdate: Sept. 6, 2009
Deal: $180,000 from Corcoran and former Shark Kevin Harrington–contingent on founder “Cactus Jack” Barringer losing 30 pounds using his product. (He did.)
Result: Corcoran calls this her “worst investment.” (We assume all money was lost.)
Toygaroo, an online toy-rental service
Airdate: March 25, 2011
Deal: Cuban and O’Leary gave $200,000 for a combined 35 percent stake.
Result: Company filed for Chapter 7 bankruptcy in April 2012.
Here are some Shark Tank Winners
I Want to Draw a Cat For You, an online cartoon service (one of Mark Cuban’s best investments) I Want To Draw a Cat For You
Airdate: Jan. 27, 2012
Deal: Cuban paid $25,000 for a 33 percent stake. (John regrets not going in on this one.)
Result: 8,930 cats drawn and counting, at $9.95 apiece. ($9 of that is profit.)
This one was a very odd product but so funny.
Daisy Cakes (one of Barbara Corcoran’s best investments)
Airdate: April 22, 2011
Deal: Corcoran paid $50,000 in exchange for a 25 percent stake and $1 for each of the first 50,000 cakes sold.
Result: $50,000 paid back within three months. Daisy Cakes has sold more than 10,000 cakes per month since airdate. (Prior to that, it sold 1,000 cakes over two years.)
This one was interesting because they did an update on it and the profits started to decrease. The owner figured out that the quality of the cakes (recipe) was slipping so she got back in the kitchen to make sure the quality of the cakes never slips again.
ReadeRest, magnetic reading-glasses holder (Lori Greiner’s best investment)
Airdate: Feb. 24, 2012
Deal: Greiner paid $150,000 for a 65 percent stake and took the product to QVC.
Result: More than $3.5 million in sales and climbing.
Talbott Teas (Kevin O’Leary’s best investment)
Airdate: Feb. 17, 2012
Deal: O’Leary paid $250,000 for a 35 percent stake. John came in later after extricating himself from a deal with another tea-related company and provided an intro to Jamba Juice.
Result: Jamba Juice acquired Talbott Teas for an undisclosed sum and sells it at its 750 locations.
Robert Herjavec describes his best “Shark Tank” investment to date: Tipsy Elves. He made a $100,000 investment in return for a 10 percent of the holiday sweater company. Prior to the show, Tipsy Elves had about $750,000 in sales. Now they are projecting over $6,000,000 in sales for upcoming 2014 season alone and Herjavec says the company’s possibilities for growth are endless.
My question for you is this, “Which Shark Tank product is your favorite?”