How 6 smart entrepreneurs failed to get 'Shark Tank' money but went on to make millions
Who's sorry now? They didn't get the 'Shark Tank' deals they w, but these startups are killing it anyway.
It's hard to land a coveted slot on "Shark Tank" and harder still to get the deal you have in mind. Common sense might tell you to take any deal the sharks are nice enough to offer.
Then again, maybe not. Turning down a "Shark Tank" offer that doesn't meet your goals may be tough, but sometimes it's the right thing to do. Just ask these entrepreneurs who failed on "Shark Tank," either getting no deal at all or a deal they couldn't agree to. They may not have gotten shark money, but they're all doing just fine.
To give all entrepreneurs hope, the personal finance site GoBankingRates has compiled a list of 12 companies that have gone on to rack up sales in the millions after failing to get funded on the show. Here are my favorites:
Darren Pacque decided to found CoatChex, a mobile, free-standing coat check system, after his own coat was stolen from a night club that lacked a coat check. What made his company unique was that it eliminated tickets, instead linking patrons to their possessions using mobile phone numbers, social media handles, and a snapshot taken on the spot.
Mark Cuban offered Pacque $200,000 for a one-third stake in the company, but Pacque thought its worth was closer to $2 million so he said no. Since then, his system has been used at airports, the Super Bowl, and New York's Fashion Week. It provides coat checking on an ongoing basis at 50 locations, including Madison Square Garden. Doesn't sound like a $600,000 company to me.
2. Proof Eyewear
Brooks, Tanner, and Taylor Dame make hand-crafted eyeglass and sunglasses frames from sustainable wood. They started out doing it for family and friends but it quickly blossomed into a business. The three brothers went on Shark Tank in Season 4 and were offered $150,000 for a 25 percent stake in their company Proof Eyewear. They'd hoped to only sell 10 percent, but countered with a 20 percent offer for $200,000. The sharks didn't bite.
Proof Eyewear now sells to retailers in 20 countries and Business Insider has estimated its annual revenues at $2.5 million. Twenty percent of that would be $500,000. We don't know how much of that is profit. But even if it's only 5 percent, $25,000 a year would have been a pretty good return on an investment of $200,000.
3. CBS Foods
Shawn Davis, a.k.a. Chef Big Shake pitched his shrimp burgers to the sharks, hoping to sell a 25 percent stake in his company for $200,000 but no dice. But thanks in part to that TV appearance, Davis attracted other angel investors and was able to get his products into 15 retail supermarket chains and 2,000 stores across 26 states. Revenue grew to $5 million a year and Mark Cuban said later that passing on Chef Big Shake was one of his biggest Shark Tank mistakes. These days, Davis has a venture deal to grow his fast-casual chain of restaurants, Big Shake's Hot Chicken & Fish, with nine locations planned by the end of 2017.
4. Copa Di Vino
Copa Di Vino is a simple but powerful concept: good wine, sold in single-serving resealable containers. The sharks liked it, but none were willing to fork over $6,000 for a 30 percent stake in the company and that was the deal founder James Martin wanted. Despite his appearing twice on the show, they never came to terms. The company seems to be doing fine, though -- Martin told ABC news it has made $25 million in revenue.
5. Eco Nuts
This company's product is certainly unique. Eco Nuts sells soap nuts (yes, there really is such a thing, but it's actually a dried berry rather than a nut). Throw a few in a cloth bag, toss them in the washer and your clothes come out clean. The company's founders wanted $175,000 for a 15 percent stake in the company, but the best offer they got was $175,000 for 50 percent. Not wanting to sell half their company, they declined. The company has since grown to $1 million in annual sales, according to the Associated Press.
Jamie Siminoff pitched his product, which allows users to see and speak with someone at their front door through a smartphone, no matter where they are. The company had solid sales already, and Siminoff was hoping to get $700,000 for a 10 percent stake in the company. The deal he was offered instead was $700,000 for 5 percent--plus a royalty on all sales ever after. Siminoff declined because "that would have been a longer road to death," as he told Inc. later.
He did raise some VC funds and then got a surprising email introducing him to Richard Branson. A guest of Branson's had used the product to sign for a delivery while away and Sir Richard was impressed. Initially, the Virgin founder sought to give some as gifts, but he also wound up leading a $28 million round of funding for Ring. Take that, sharks!
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