Business

No Thanks! Companies Reject ‘Shark Tank’ Deals, Still Thrive

Published

10 years ago

February 27, 2015

In this Sunday, Feb. 22, 2015 photo, Daniel Rensing, left and his wife Stephanie, owners of The Smart Baker, pose with their first product, an apron with upside down measurement conversions, at their warehouse in Rockledge, Fla. Annual revenue for their company is close to $1 million, up from $130,000 before their March 2012 appearance on the reality TV show “Shark Tank”. (AP Photo/David Goldman)

JOYCE M. ROSENBERG, AP Business Writer

NEW YORK (AP) — With the cameras rolling, Daniel and Stephanie Rensing accepted an offer from a “Shark Tank” investor. But after they had time to think about it, they changed their minds.

Annual revenue for their company, The Smart Baker, is close to $1 million, up from $130,000 before their March 2012 appearance on the ABC reality TV show.

“Not doing the deal and having that exposure was probably the best scenario for us,” says Daniel Rensing, CEO of the Rockledge, Florida, company which sells aprons, parchment paper and other baking equipment.

Dreams of investor money have induced more than 150,000 businesses to apply to be contestants on “Shark Tank,” where entrepreneurs pitch to cast members including Barbara Corcoran, founder of a prominent New York real estate brokerage; Daymond John, founder of the clothing company FUBU; and Robert Herjavec, founder of the technology conglomerate Herjavec Group.

Entrepreneurs may be all smiles when they get an offer on the show, but the deals aren’t set in stone. Negotiations start soon after episodes are taped. Contestants can walk away if they don’t like the terms.

“When we shake hands on a potential deal on Shark Tank, the romance runs high and everyone’s excited about what could be,” Corcoran says. “In the end, the entrepreneur is in charge.”

During the first five seasons, 374 contestants appeared on TV and investors made 190 offers, according to ABC. Forty-eight contestants turned down offers during taping, executive producer Clay Newbill says. They haven’t tracked how many deals fell apart during negotiations.

The producers ask entrepreneurs and investors to make their best efforts to close deals, Newbill says.

“But we understand, just as in the real world, the reality is that not all deals will close,” he says.

SECOND THOUGHTS

Corcoran offered $75,000 for 40 percent of The Smart Baker, and a 5 percent sales royalty, during the 2011 taping. During negotiations the Rensings, disagreed with Corcoran about the target market.

“We were sticking to our guns on the market we served,” Rensing says.

Corcoran says she was disappointed, but she knows a rejection is an occupational hazard on “Shark Tank.”

“Nobody likes to be turned down, especially me,” she says.

The Smart Baker has thrived without her money. In the following year, revenue grew to $600,000. The episode also helped the company get noticed by Food Network and other media. Reruns provide a sales bump.

But a “Shark Tank” deal isn’t just about money; it also brings expertise and mentoring from a pro. The Rensings don’t dwell on what they might have missed by not sticking with Corcoran.

“There is always the ‘what ifs,’ but we don’t let that get to us,” Daniel Rensing says.

THE RIGHT MOVE?

Some contestants may turn down offers because they feel there are more important things than getting investors, says Matthew Rutherford, an entrepreneurship professor at Oklahoma State University who has studied “Shark Tank” pitches.

“What they crave over everything including money and wealth is autonomy,” Rutherford says.

Entrepreneurs who appear on the show are likely hoping for both a cash infusion and control of their companies, says Harvard Business School professor Noam Wasserman. But the money doesn’t guarantee success, and having an investor may be an unpleasant experience.

“You could end up with the worst of both worlds,” he says.

NOT AFRAID TO SAY NO

When Mona Weiss and Scott Shields pitched their company, Eco Nuts, on an episode that aired in October 2012, Herjavec offered $175,000 for 50 percent. Weiss and Shields, who wanted to sell a 15 percent stake for that amount, said no on the spot.

“It was a terrible deal, really awful. No one would give up half their company for less than they make in a year,” Weiss says. The Lawndale, California, company, which makes laundry detergent from berries, was on track for $250,000 in revenue in 2012.

A spokeswoman for Herjavec, Erin McLean, says he does not comment on deals or offers that are closed.

Some people told Weiss and Shields they were foolish.

“They said, ‘it was a lot of money, you should have taken that,'” Weiss says.

But being on “Shark Tank” put Eco Nuts on a faster track to its current success. Revenue, now over $1 million, grew so much the company moved to manufacturing space five times bigger than its original factory.

____

Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg

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Oakland Post: Week of December 25 – 31, 2024

The printed Weekly Edition of the Oakland Post: Week of December 25 – 31, 2024

Published

23 hours ago

December 26, 2024

Oakland Post

To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

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Bay Area

Glydways Breaking Ground on 14-Acre Demonstration Facility at Hilltop Mall

Glydways has been testing its technology at CCTA’s GoMentum Station in Concord for several years. The company plans to install an ambitious 28-mile Autonomous Transit Network in East Contra Costa County. The new Richmond facility will be strategically positioned near that project, according to Glydways.

Published

3 days ago

December 24, 2024

Oakland Post

Image of planned Richmond facility courtesy of Glydways.

The Richmond Standard

Glydways, developer of microtransit systems using autonomous, small-scale vehicles, is breaking ground on a 14-acre Development and Demonstration Facility at the former Hilltop Mall property in Richmond, the Contra Costa Transportation Authority (CCTA) reported on social media.

Glydways, which released a statement announcing the project Monday, is using the site while the mall property undergoes a larger redevelopment.

“In the interim, Glydways will use a portion of the property to showcase its technology and conduct safety and reliability testing,” the company said.

The new Richmond development hub will include “over a mile of dedicated test track, enabling Glydways to refine its solutions in a controlled environment while simulating real-world conditions,” the company said.

Visitors to the facility will be able to experience on-demand travel, explore the control center and visit a showroom featuring virtual reality demonstrations of Glydways projects worldwide.

The hub will also house a 13,000-square-foot maintenance and storage facility to service the growing fleet of Glydcars.

“With this new facility [at the former Hilltop Mall property], we’re giving the public a glimpse of the future, where people can experience ultra-quiet, on-demand transit—just like hailing a rideshare, but with the reliability and affordability of public transit,” said Tim Haile, executive director of CCTA.

Janet Galvez, vice president and investment officer at Prologis, owner of the Hilltop Mall property, said her company is “thrilled” to provide space for Glydways and is continuing to work with the city on future redevelopment plans for the broader mall property.

Richmond City Manager Shasa Curl added that Glydways’ presence “will not only help test new transit solutions but also activate the former Mall site while preparation and finalization of the Hilltop Horizon Specific Plan is underway.

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2024 in Review: 7 Questions for Outgoing Stockton Mayor Kevin Lincoln

Lincoln’s decision to run for mayor stemmed from his love of people and his desire to serve his city. He prioritized resolving issues, including homelessness and public safety, among others. Lincoln, a Republican, will transition out of his role as mayor on Dec. 31, after an unsuccessful campaign to represent the 9th Congressional District.

Published

3 days ago

December 24, 2024

Oakland Post

Stockton Mayor Kevin Lincoln. Photo provided by California Black Media.

Kevin Lincoln, outgoing mayor of Stockton, CA, captured during his tenure as a leader dedicated to the city’s progress and community engagement.

By Edward Henderson
California Black Media

Born in Stockton, Mayor Kevin Lincoln says his Army upbringing inspired him to serve others.

Lincoln joined the United States Marine Corps in 2001 and was later assigned to Marine One, serving during President George W. Bush’s administration.

Following his military service, Lincoln worked for one of the nation’s top private security companies for eight years in Silicon Valley. In 2013, he resigned from his corporate position to give back to his community in Stockton through full-time ministry at a local church.

Lincoln’s decision to run for mayor stemmed from his love of people and his desire to serve his city. He prioritized resolving issues, including homelessness and public safety, among others.

Lincoln, a Republican, will transition out of his role as mayor on Dec. 31, after an unsuccessful campaign to represent the 9^th Congressional District.

Recently, California Black Media (CBM) spoke with Lincoln. He reflected on his accomplishments this year and his goals moving forward.

Responses have been edited for length and clarity.

Looking back at 2024, what stands out to you as your most important achievement and why? 

What I prioritize for our city council is our youth. They are the future — not only our city, but this region as a whole.

We were able to invest over $6 million in youth programming and workforce development, and partner with 14 different community-based organizations. We were able to employ over 600 young people through the city of Stockton. We launched even our first ever summer jobs program for the city of Stockton.

How did your leadership and investments contribute to improving the lives of Black Californians? 

It’s about giving people a seat at the table, and not necessarily waiting for people to come to me, but me going to the community, making myself accessible, meeting our community at the point of their need, where they’re at.

What frustrated you the most over the last year?

It’s politics. Because unfortunately, there’s politics in everything. And I say politics impedes progress. You can have a policy, a solution that may not necessarily be 100% perfect. But it’s a good solution for everybody. But because we allow politics to get in the way based off our personal ideologies, oftentimes we can miss opportunities to make an impact for the benefit of the whole.

What inspired you the most over the last year?

My biggest inspiration has been the community and our ability to work together. What’s unique about Stockton, one in 20 jobs are nonprofit jobs in the city of Stockton and even San Joaquin County.

What is one lesson you learned in 2024 that will inform your decision-making next year?

To stay focused. In politics, there’s a lot of opportunity for distractions. There are a lot of influences from the outside — good, bad and indifferent. It’s important to stay focused, have a clear vision, and be committed to that vision.

In one word, what is the biggest challenge Black Californians face?

Economics. When the economy is not healthy, when we’re not thriving, we’re limited. Opportunities are limited.

What is the goal you want to achieve most in 2025?

I just want to continue to be a servant leader and serve our community in whatever capacity I am in.