How I Got the Shark Tank Interested in My Bean Bag Chairs

Posted May 10, 2013

It takes guts to swim with these sharks!

Shark Tank is a reality TV show produced by Mark Burnett, currently airing on ABC.  It debuted in 2009 and has become one of the most watched shows today.  In the Shark Tank, there are 5 super wealthy, super successful business people who are "potential investors" ready to write a check to the right entrepreneur with the next big thing.  These folks are the "sharks".

As of today, the 5 sharks are (from left to right):

Shark Tank Investors - the "Sharks"

Mark Cuban - American businessman, investor, and philanthropist. He is the owner of the NBA’s Dallas Mavericks, Landmark Theatres, and Magnolia Pictures.

Daymond John - American entrepreneur, investor, author and motivational speaker. He is the founder, president, and CEO of FUBU (an urban clothing company).

Kevin O'Leary - Canadian entrepreneur, venture capitalist, and investor who turned a $10,000 loan into a computer software business worth $4.21 billion.  Mr. O’Leary is especially vicious sometimes!

Lori Greiner - the "Queen of QVC", with over 100 patents.

Robert Herjavec - Canadian businessman and investor who founded and sold an Internet Security Software company for $30.2 million dollars.

Entrepreneurs with a proven or potentially successful product appear on the show and stand before the sharks to present their idea.  The entrepreneurs pitch their best pitch to try to get the sharks to invest their own money into the business.  The entrepreneur has to tell the sharks how much money they need in exchange for some portion of the business.  Something like: I’ll give you 20% equity stake in my business in exchange for $100,000.  That, by the way, means that the entrepreneur thinks their business is worth $500,000 (the company’s “valuation”).

If one or more of the sharks likes the product, they give their offer, which can be what the entrepreneur originally asked for or something different.  The sharks are definitely there to invest in something they believe will be profitable.  It’s not just for show.  They want to make money.  The sharks can also all say “I’m Out”, in which case the entrepreneur smiles, thanks the sharks, and goes home sad, maybe a little pissed off, and empty-handed. 

But the silver lining is that they did get to go on prime time TV!  That’s worth A LOT, but before you get too excited (like I did), it’s NOT FREE either.  There’s a big catch, which you’ll learn a bit further down in this article.

Prime Time TV Isn't Free!

I watch the show a lot, and boy can I tell you that those sharks are tough!  Every time I watched it, I would think to myself "hmmm, I wonder if the sharks would invest in my bean bag chairs?  I've seen them invest in other bean bag furniture, so why not mine?  It really is worth a try!".  But, I know that you better have your product sales pitch ready, you better be entertaining, and you better have your numbers straight.  These sharks are on the top of their businesses and they can easily sniff out blood in the water – like if you go on and tell them you made $100,000 in 3 months, but your profit margins don’t add up.  The sharks will call you out with no hesitation, get pretty frustrated with you, and there have definitely been some tears shed.  They will tear you and/or your product apart if you can’t tell them how you think your idea can eventually turn a profit.  

O’Leary, for example, is brutal and doesn’t blink much even when someone pulls out a sob story about being down and out.  Some of the other sharks are a bit kinder, but they too aren’t there to hold your hand and tell you you’re awesome if you’re not.  If your product has a weakness, if your business plan has holes, if you have a “patent pending” but really that just means you applied for one and probably won’t get one… well, just beware.  Oh, and if you want to boast that you practically already have one foot in the door with QVC when really all you did was get a broker to sign with you (brokers will sign with just about anyone)… better to not mention that lest you be bitten hard by the sharks.

So… when I got the call to enter the second round of the process to go on the Shark Tank, I kind of freaked out.  But, let’s backtrack and talk about how I even got ABC to even call me for the second rounds.  Perhaps you may want to try getting your product on the Shark Tank, this may give you some insight into the application process.

Anyone that may want to apply to be on the Shark Tank should be aware of the following:  

1.  If you get chosen and decide to be on the show, you have to sign a contract that gives the producer of the show a part of your business…that means that even if you don’t get a deal, you will potentially have to give up a part of your future profits…forever!  Yes, you read that right.  The producer of Shark Tank has the option to take for example, a 2% royalty or a 5% equity stake in your business.  So you could possibly have to pay them 2% of everything you sell, or offer up 5% to this new partner.  And this new partner doesn’t have to do any work or help you with anything to get that share.

When I applied, I didn’t know this would be required.  In fact, when I got the huge stack of documents to sign and read through in order to proceed into the second rounds, it wasn’t until the second to last page (seriously) that I read this requirement.  I should have skimmed the documents instead of spending so much time filling them out just to find that at the end.  My fault…!

It's A Deal - Or is it?

2.  Just because you shake a hand on TV and get that deal, you don’t necessarily actually get that deal.  The sharks can cancel or renegotiate a deal after they have had the time to more thoroughly check you out after the show is over (I assume that means lawyers and scary things like that).  You don’t just walk away with a check.

It has been reported that in 2012, the sharks did invest $12.4 million in various entrepreneurs.  So going on the Shark Tank isn’t a bad idea for the right entrepreneur.  Plus, even if you don’t get a deal, you got some pretty awesome prime time TV exposure! 

Take, for example, a Husband and Wife team that created the most amazing organic dog treats that taste like human food but are made for pampered pooches.  Let’s say this team used up all their own money, can’t or won’t take out a second mortgage, and are on the verge of making a deal to sell to Costco…but don’t have to money to actually make the treats to fill such a huge order.  Well, in my opinion, this duo doesn’t have much to lose by making a deal with the sharks.  Even if they have to give up 5% to the producers, and whatever percentage or royalty they have to give to the shark, they would be nowhere without them anyway.  So, they take the deal, everyone gets paid, and the hubby and wife have the money to fill that Costco order and away they go to becoming gazillionaires.

Or, perhaps you have a product that has a great profit margin (you make a really good amount of money off of each sale after expenses are deducted).  And this product can sell like hotcakes on QVC.  Well, with the QVC queen on the show, if she picks you up and can make you rich….well, then giving up a portion of the business may be absolutely what you want to do in exchange for that once-in-a-lifetime opportunity.

Hey, maybe you even came up with a cool new invention that would make relaxing on our already super comfy bean bag chairs even better!  If you do come up with a great accessory or product to go with bean bags, please do let us know - perhaps WE can make a deal... but I digress...

3. If you do get past the second rounds (which includes making a demo tape – in which you get just five itty-bitty minutes to answer a ton of questions AND show off your stuff, sending in product samples, and filling out a stack of documents), I understand the tapings and rehearsals can be grueling.  Not to mention nerve-racking!  I would have probably wanted to throw up half the time, and the other half want to cry from stress.  Or maybe the adrenaline and dreams of dollar signs would have carried me through, who knows!

During the show's 2012 season, 36,076 people applied.  Wow!  That makes me feel pretty awesome that they called us for second rounds! Still curious to see how you can successfully get ABC's interest sparked to get on the Shark Tank?

Cliffhanger alert!!

...Stay tuned on Monday May 13, 2013 on my blog for more about what we sent in to ABC to catch their attention!  If you're thinking of applying, you don't want to miss it!  I'll even show you my actual application that got ABC to call me!

Yours truly, Jade