Credit: Caroline Tran
Highlights
- Shark Tank Investors do not hesitate to invest if they like the vision of an entrepreneur.
- From losing millions in 2021 to selling its products in major retail outlets after a deal on Shark Tank, Tia Lupita Foods came full circle.
- The Lollacup and Daisy Cakes investments were two other risky deals secured by Shark Tank Investors that you should know about.
Shark Tank has emerged as the major force leading businesses towards success when no one else believed them. The different Shark Tank Investors have often made deals despite the potentially risky nature of companies. While the results may go either way, the Sharks have made huge through many investments.
In the hundreds of episodes across seasons, Shark Tank has presented the audiences with a variety of entrepreneurial ventures. Some have been in their pre-sales stage, while others have been laden with debts. Despite this, if the Shark Tank Investors believed in the pitcher’s vision, they made investments.
Below are some risks taken by Shark Tank Investors through different deals and the results after them:
1. Lollacup
The entrepreneur couple of Hanna and Mark Lim made their way to the Shark Tank Investors with Lollacup. Seeking $100K for 15% equity in the company, the duo explained the many features of their line of sippy cups. Here is how this was a risky investment for the judges:
Hanna and Mark described their products to be composed of BPA free plastic. Additionally, they claimed that their designs were far better than others. The company had earned more than $30K through sales in 2012. But the shocker for the investors came when they revealed to be paying 15% of the sales to an agent.
Lori Greiner admitted to loving Lollacup but opted out of the deal as the industry was not her niche area. Despite the risks of an external stakeholder, the other Sharks proposed their deals one after the other. Kevin O’Leary offered $100K for 50% equity. Daymond John was the next to offer $100K for 50% on the condition that the entrepreneurs broke their deal with the agent.
The Lims then countered both Daymond and Kevin for $100K at 40% equity. Robert Hejavec showed an interest, followed by Mark Cuban. The two of them then sealed the deal with the entrepreneurs for $100K at 40% equity.
The company is going strong after the deal, with an annual revenue of $2 million (as of 2023).
2. Tia Lupita Foods
Aspiring entrepreneur Hector Salvidar approached the judges with healthy Mexican food products. The investment sought for the venture was $500K for 5% equity. With the business losing huge capital in successive years, here is how Tia Lupita Foods was a risky deal for the Shark Tank Investors:
Hector started his pitch by making a comparison of his healthy food items with other Mexican food items infused with artificial ingredients. He then emphasized his line of sustainable food products, including chips and tortillas. The motivation behind it was to affirm that Mexican food is not unhealthy.
Having appeared on the show in 2023, the pitcher was revealed to make $900K in 2020. Next year, the figure reached $1.5 million. The brand’s offerings were then available in different regional retail stores, such as Walmart. But the panelists were numb when he claimed to have lost $700K in 2020 and $1.2 million the next year.
Daymond John was the first one to opt out as he felt Hector lacked passion. Barbara Corcoran stepped out of the deal, stating that $500K would not suffice for the financial loss he was going through. Mark Cuban and Lori Greiner also chose not to invest, owing to the debt.
Kevin O’Leary was the only interested Shark; the deal was locked at $500K (in debt) at 5% equity. As of 2024, the company expanded its reach as over 5000 of its items were available across the nation.
3. Daisy Cakes
Kim Nelson went to the Shark Tank Investors with her cake business. The investment sought was $50K at 25% equity. Having appeared in one of the earliest seasons of the show, here is a complete recap of why this, too, was a risky deal for the Sharks:
Kim pitched Daisy Cakes as her family recipe, which was made all on her own, along with the assistance of her mother. Available in a variety of flavors, the cakes did not have any harmful preservatives. She further highlighted that the product was delivered to the doorsteps of users.
When the panelists tried the samples, they loved the taste and inquired about the numbers. Kim revealed that the landing and selling costs were $18 and $44, respectively. But what worried the investors was the low sales figure. In the first three months of 2011, the business had earned only $27K.
Daymond John did not hear anymore, and citing the small nature of the business, he stepped out. Kevin Harrington, Robert Herjavec, and Kevin O’Leary also chose not to invest. Barbara Corcoran was the only one to show an interest.
Barbara finalized the deal with Kim for $50K at 25% equity alongside a royalty of $1 per cake till she recouped her invested amount.
The deal allowed Corcoran to earn a huge profit as the company’s annual revenue grew rapidly, with the current value being $4 million. Owing to its success, it was invited on a variety of platforms, including QVC, ABC World News, and Good Morning America.
Conclusion
Through countless episodes on the show, Shark Tank Investors have demonstrated that risks are an indispensable part of a successful investment deal. The current status of Lollacup, Tia Lupita Foods, and Daisy Cakes reflects that regardless of debts and sales, a business can sustain itself with the correct vision and assistance.
References
- Daisy Cakes: Here’s What Happened After Shark Tank, Food Republic, Erica Martinez
- ‘Shark Tank’ entrepreneurs who won $100,000 decided to audition the night before casting, waited 7 hours in line, and typed out their answers to every question ever asked on the show, Business Insider, Shana Lebowitz
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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