Highlights
- Shark Tank allows entrepreneurs to present their company on a global scale and gain wide-scale attention.
- Upon analyzing the fate of a product/company, Sharks decide whether or not to invest in it.
- But there are times when entrepreneurs turn down offers from the famous Sharks and later go on to earn millions.
The field of entrepreneurship, as exciting as it may seem, is equally tricky. Without the right guidance and help, your business can fall through in no time.
Out of the many aspects integral to the entrepreneurial dream, the most crucial one is to have enough money in your pockets. For any business idea to sail through, it gets imperative to find out the right investors who can supply you with adequate financial assistance.
Thanks to shows like Shark Tank, many budding entrepreneurs are now finding the right people who have the adequate expertise, experience, and capital to accomplish their goals.
But do you think every deal is successful? There are episodes when the Sharks step out of deals and in some the entrepreneurs refuse to agree to their terms.
What Happens When Entrepreneurs Say NO to A Deal?
There’s no compulsion for entrepreneurs to accept offers from Sharks, which is what allows them to make calculative decisions based on their business acumen. If they feel a deal poses a threat to them in terms of debts or losing out on a major stake in their business, they may simply refuse.
Below listed are some businesses that tasted success after rejecting offers from Sharks:
1. Coffee Meets Bagel
The Kang Sisters Arum, Dawoon, and Soo came up with their business idea Coffee Meets Bagel with the vision to change how people find and fall in love. The amalgamation of daily flash sales sites immersed with social networking is driven towards offering the highest quality dating services for singles.
The entrepreneur sister-trio proposed $500k for a 5% equity stake. To this, Kevin O’Leary and Barbara Corcoran had a similar response who marked themselves out citing the low percentage of equity. MarK Cuban, though, made an offer of $30 million, which they declined stating that their vision was a lot larger, “similar to match.com,” one of their competitors. They believed that they could generate huge revenues just like match.com, which could easily match Mark’s offer.
The latest update about the company is that it has managed to raise a venture capital of $11.2 million till date.
2. Xero Shoes
Lena and Steven Phoenix, a married couple, presented their business pitch upon Xero Shoes, barefoot shoes that are intended to help prevent any sort of modern shoe injuries. Explaining the many standout features, they discussed how the shoes offer high-performance and are stylish, odor-free, and way more comfortable than flip-flops.
The offer presented by the entrepreneur couple was $400K at an equity stake of 8%. The Sharks, however, were not at all impressed by the product and called it to be just a plain piece of rubber with strings attached to it. But what’s most surprising was that Kevin O’Leary, who criticized the product the most, was the only one to propose an offer. His proposal was $400K for 50%, which was turned down by Steven and Lena.
Despite declining the offer, the annual revenue of Xero Shoes touched a massive figure of $23 million by 2023. Additionally, it has expanded beyond having just a DIY sandal making kit. They now have a complete line of casual and performance shoes, boots, and sandals for almost every activity. It was even selected for the Summer Olympics held in Tokyo in 2021.
3. The Smart Baker
Stephanie and Daniel Rensing are two confident young people from Brooklyn, New York who pitched in their home baking brand The Smart Baker. Giving a quick demo of how baking at home can be a hassle, they started by showing an apron which is printed upside down so you can read it while wearing. They also showed a parchment paper that comes in pre-cut flat sheets and can fit in any common sized baking pans. Additionally, there are unique lift tops, which unlike other disposable towers made out of cardboard, are reusable, washable, and durable.
The investment sought by Stephanie and Daniel was $75K for 25% equity stake. Daymond John made the first offer at $75K for 40% equity followed by Barbara Corcoran who offered $75K for 40% of equity stake along with a 5% royalty. Daniel countered Barabra’s offer with a revised one at $100K for 40% equity and 5% royalty, which Babara declined. Stephanie jumped in the chat and asked her if the previous offer was still on and eventually agreed to it.
Even after agreeing to Barbara’s offer, it was revealed later on that the deal was called off. Despite this, The Smart Baker garnered an impressive spike in sales and is earning an annual revenue of $1 million (as of 2022).
4. CoatChex
CoatChex is a breakthrough coat check system powered by innovative technology. The idea was presented by Derek Pacque who explained that the technology matches a person’s face with their belongings. All you need to do is hand over your coat, type your name into the system, and your picture is taken automatically. And at the end, you just need to make the final payment.
Derek came asking for an investment of $200K for 10% equity stake. Mark Cuban was the first one to initiate the negotiations with an offer of $200K for 33% equity. Hearing this, Derek immediately went to call his business partner over the phone, who advised him to turn it down as it would mean giving out a large share of the company. Eventually, Derek said no to Mark.
Post its appearance on Shark Tank, CoachChex rebranded itself to Chexology and went on to earn an annual revenue of $7 million as of 2022.
To Sum Up
Shark Tank provides great exposure to entrepreneurs who are on the lookout for either growing or saving their businesses. Receiving investment from some of the biggest names in the entire business community of the USA can add a lot of value to their companies. But there are times when the entrepreneurs are not convinced by the deals proposed to them. During such cases, making best use of their confidence they turn down offers and create a path for themselves, which leads them to amazing results.
All the brand stories discussed above are the perfect testament to this. So the most crucial thing for any entrepreneur is to believe in themselves.
References
1. Derek Pacque, Crunchbase
https://www.crunchbase.com/person/derek-pacque
2. The sisters who made a global dating app, App Store Preview, Apple
https://apps.apple.com/sg/story/id1450063111
3. Xero Shoes: Steven Sashen and Lena Phoenix, App Store Preview, Apple
https://podcasts.apple.com/se/podcast/xero-shoes-steven-sashen-and-lena-phoenix/id1150510297?i=1000602694283
Entrepreneur, auteur, raconteur. Rob Merlino is a blogger and writer who enjoys the Shark Tank TV show and Hot Dogs. A father of five who freelances in a variety of publications, Rob has a stable of websites including Shark Tank Blog, Hot Dog Stories, Rob Merlino.com and more.
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