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Kymera has not been granted a patent.
The mold needed to make Kymera boards costs $40,000 to $50,000.
Woods has never sold a single Kymera board.
Woods gave his company a $1 million valuation despite having zero sales.
Woods has put $130,000 of his own money into the company in the last 10 years.
- 11/11/13--08:12: Mark Cuban Reveals The Best And Worst 'Shark Tank' Pitches And More
- 11/12/13--08:13: Here's What 'Shark Tank' Looks Like In 9 Different Countries
- 11/13/13--16:13: Don't Waste Mark Cuban’s Time With Your Long Business Backstory
- 11/17/13--19:53: 17 American TV Shows That Started In Other Countries
- 11/23/13--11:34: Here's Why You Shouldn't Always Take The First Offer On 'Shark Tank'
- 11/25/13--13:15: What It's Like Working With The Meanest Investor On 'Shark Tank'
- 11/26/13--07:38: Barbara Corcoran: Ladies, If You've Got It, Flaunt It
- 12/02/13--07:39: 3 Insider Tips For Getting Your Company On 'Shark Tank'
In many ways, ABC's reality pitch show "Shark Tank" can be a highly positive experience for the business owners who go on. Even the ones who don't get a deal get a national platform to show off their business. The ones who do make a deal get funding and an extremely valuable advisor.
But these are highly experienced investors negotiating on camera with people who have likely never been on TV before. There's a power mismatch and an intimidation factor, and since the Sharks are out to make money themselves, they can and do take advantage.
On this week's episode, a husband and wife team came in asking for $600,000 in cash for a 7% stake in their company. They ended up giving up 9% of their company for a $600,000 loan from Lori Greiner they'll have to pay back over the next two years, instead of getting the cash investment that's standard on the show.
After hearing a slightly different version of the offer, for 10% of the company, Mark Cuban sounded off.
"Lori, that's the worst deal you've ever offered," Cuban said. "I'm just telling you the facts."
"When they wake up, they'll realize they messed up," Cuban added when they took the final deal.
The business was "RuffleButts," a children's fashion line. The owners, husband and wife team Mark and Amber Schaub, did ask for a relatively large investment. But they had the numbers to back it up. They had $3.7 million in sales last year and said they're on track to do between $4.5 and $5 million this year.
"We were profitable in year one, and we've grown every year since," Amber said. They also have no debt at all, which seriously impressed the investors.
Their pitch was excellent, though the combination of an excessively large inventory of items they offer (over 2,000) and a lack of retail and apparel experience scared off three of the investors.
The pair's fundamental mistake was revealing that they didn't really need cash. What they asked for was less than they'd be generating in revenue, so why did they need the investment?
It was partially about ramping up inventory, Mark said, but mostly about getting an advisor and partner.
That took the focus away from how well the business was doing and the company's strong financial position — their main sources of leverage — and made it clear how much the pair wanted an investment.
The Sharks clearly recognized this, and when the offers came, they weren't all cash. Barbara Corcoran offered a $300,000 investment and a $300,000 credit line. And then there was the two-year loan offer from Greiner. Because the business was generating so much cash and simply wanted a Shark on board for their expertise, the Sharks asked for their money back, which is unusual for the show.
After Corcoran highlighted that the competing offer was entirely a loan, Greiner said that "it's more than a loan, it's a lifetime of experience," playing on what the pair had said earlier about wanting a partner.
The second mistake? When negotiating, the pair pushed to reduce the equity stake and the valuation, never asking if either would be willing to make a full cash investment instead of a loan. When Greiner slightly dropped the amount of equity she was willing to take, without changing the terms of the loan, the pair took it very quickly.
The Sharks seemed genuinely surprised that Greiner got away with such a lopsided deal.
"I can't believe she took that," Corcoran said after it closed. "Well, Lori did a great deal."
Having one of the Sharks on board is valuable, but the Schaubs gave up too much and got too little for it. They basically got an extremely expensive loan, rather than a real investment. And since Greiner will be getting all of her money back, she's taken on virtually zero risk. So in giving up a lot to get her on board, they might have made her less motivated.
"Shark Tank" isn't a charity. The investors are putting in their own money, so they have every incentive to push to get the best deal possible for themselves. Greiner certainly did this time.
Entrepreneur Melissa Carbone got some laughs when she strolled into the room trailed by a growling zombie on the latest episode of "Shark Tank." But the chuckles stopped when she asked for a $2 million investment.
Carbone's proposal — $2 million in exchange for a 10% equity stake — meant she valued her entertainment company, Ten Thirty One Productions, at a massive $20 million. To the potential investors on ABC's reality pitch show, it seemed a big ask for a company that specializes in creating and producing live horror attractions.
Backed by a cast of zombies and other ghoulish creatures, Carbone walked the Sharks through her company's most popular attraction, the Los Angeles Haunted Hayride. But the hayride through the "pitch black woods" didn't scare her audience nearly as much as her valuation. That is, until Carbone began to run through her numbers.
"We do attractions all year long. We have the Los Angeles Haunted Hayride, which is our seasonal attraction here in LA," she explained. "Seventeen nights we sell out every single night. We do about $1.8 million right now per October."
That got a collective "whoa" from the Sharks.
What's more, with the production costs for the haunted hayride at $1.2 million, Carbone said her company is able to walk away with $600,000 in cash at the end of the 17 days.
"You sell out every night for 17 days?" investor Kevin O'Leary echoed, in disbelief.
"Every night," Carbone said.
"Two million for 20%," Carbone countered.
"Done!" Dallas Mavericks owner Mark Cuban yelled, sealing the largest deal in "Shark Tank" history.
Barbara Corcoran, an investor on the TV show "Shark Tank," who made her fortune in real estate, tells what she is looking for when listening to entrepreneurs' pitches. Click for sound.
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Barbara Corcoran, a seasoned investor on the TV series "Shark Tank," reveals common mistakes entrepreneurs make on the show that doom their pitches. Click for sound.
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What does billionaire investor Mark Cuban hate more than anything else?
On ABC's reality pitch show "Shark Tank," nothing infuriates Cuban more than what he calls "want-repreneurs"— adventurous spirits who like to come up with ideas but don't understand anything about business.
This is exactly who the Sharks came face-to-face with when hopeful Jason Woods and his fiancee Elise came on this week's show seeking $250,000 for a 20% stake in Woods' company, Kymera.
While Woods told the investors about his jet-propelled electric body board Kymera, which combines the light weight of a paddle board with the speed of a jet ski, Elise demonstrated how to use it.
Woods had the Sharks' attention until Cuban realized that he'd said nothing about Kymera's business model.
"That's a nice little sales pitch, but you didn't tell us anything about the business," said Cuban.
Once Woods started pitching the business side, things went downhill quickly. Some of the issues:
Things got even worse when Woods started blaming Kickstarter for his problems and said he didn't want to sell products out of his garage, but wanted large-scale production.
Then Cuban lost it: "Jason, you're so full of crap ... You had so many opportunities over 10 years!"
Investor Daymond John called Woods' pitch "the worst [he's] ever seen."
Not surprisingly, Woods walked away with no deal, saying, "I'm pissed. All they cared about was the dollar amount."
Barbara Corcoran, an investor on "Shark Tank," tells us what really happens between investors on the hit TV show, and how Mark Cuban makes his investment decisions. Click for sound.
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Barbara Corcoran, who built her fortune in real estate, tells us what the key qualities of a great sales person are. The "Shark Tank" investor also reveals what her pitch would have been like, if she were to seek financing on the hit show. Click for sound.
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"Shark Tank" investor Barbara Corcoran talks about her investments on the show over the seasons – how many go through, and why others fall through. Click for sound.
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Mark Cuban has seen all types of aspiring entrepreneurs in the past five seasons of ABC's reality pitch show "Shark Tank." He's seen idea people, sales people, and numbers people. But the only thing that actually gets his attention, and keeps it, is hard work and measurable business results.
The billionaire investor and owner of the Dallas Mavericks, who himself has built several successful companies, recently talked with Business Insider about the best and worst pitches on the show, the fastest way to lose his interest, and the best advice he ever got.
Below is a transcript of that conversation, edited for clarity.
Business Insider: What do you consider the all-time worst pitch on “Shark Tank?”
Mark Cuban: The worst was easily the two doctors that came on this season. They kept on throwing out buzzwords about social media as if that would wow us. They had no company. No business. No clue.
BI: What was the best?
MC: I actually liked the Plate Topper guy [in season four]. He was the longest deal we have ever had. It went on for two and a half hours. The entrepreneur was a J.D., Ph.D., and MBA, I believe. He knew every answer to every question. But he thought he was smarter than all five of us. Every time he thought he had an advantage one of us would tell him where he was wrong.
What I loved about him is that he never quit and kept coming back at us with confidence and eventually got a deal.
BI: What could a hopeful entrepreneur do to immediately get your attention?
MC: Have a real, operating company that has started to get real traction in a new industry that has a ton of upside.
BI: And what do they often do to lose it?
MC: The worst thing you can do is give a long backstory. It's not the time to talk about your struggles and hard work. Every entrepreneur has a similar story. You have to get right into the meat of the business.
BI: What is the worst investment you’ve made so far on “Shark Tank?”
MC: The worst is Toygaroo, [a subscription service for toys]. They went out of business.
BI: The best?
MC: I have a lot of best companies. I can’t pick one. That wouldn't be fair.
BI: It seems like you and the other Sharks bicker a lot onscreen. What’s your relationship like off-screen?
MC: We get along and will hang out all the time, but that doesn't reduce our competitiveness with each other. I can deal with losing, but I don't like it.
BI: Which deal are you most bitter about losing to another Shark?
MC: I don't recall ever losing a deal I really wanted.
BI: What’s your best advice for up-and-coming entrepreneurs? And what’s the best advice you ever got?
MC: They are the same. Do the work. Out-work. Out-think. Out-sell your expectations. There are no shortcuts. My dad [told me that] when I was in high school. My dad did upholstery on cars, and he was always very encouraging but also realistic.
BI: What are three books that you believe are required reading for an entrepreneur, and why?
They motivate me and force me to be self-critical. One of the biggest mistakes entrepreneurs make is that we lie to ourselves. We don't step back and look at ourselves like a competitor would. These books helped me take those steps.
Reality pitch show "Shark Tank," perhaps unusual for its focus on businesses seeking investment rather than on the drama or personal lives of cast members, has something of a cult following in the United States.
But it didn't get its start there. In fact, the U.S. was actually rather late to the game. The original version of the show aired more than a decade ago in Japan. It was then licensed by a production company in the United Kingdom and turned into a popular British version called "Dragon's Den."
Now, there are versions all over the world, and the look and feel of the show varies dramatically by location and country, as does what the investors expect when they put money into a company.
Here's a brief look at "Shark Tank" around the world.
Canada: "Dragon's Den"
This is the second-longest-running spinoff, having lasted eight seasons. Current U.S. Shark Kevin O'Leary was on board from the first season in 2006, and continues to do double duty on both shows. Robert Herjavec was also one of the Dragons on the first six seasons. There's also a separate, French Canadian version in Quebec called "Dans L'oeuil Du Dragon" ("In The Dragon's Eye").
Czech Republic: "Den D"
The Czech version, whose name is a reference to "Dragon's Den," is relatively long-tenured. It started in 2009 and is on its fourth season.
The set takes the "dragon's den" theme pretty seriously. In what appears to be an unused factory, it looks like a haunted house, complete with cobwebs.
And although you see offbeat pitches in the U.S. version, nothing quite matches "Humanic Houses," a company that appeared on an episode in 2012 that intends to build full-scale residences that resemble human faces.
England: "Dragon's Den"
This is the first and longest-running spinoff of the show. There have been 11 seasons since 2005. The investors on the show have invested millions of pounds in more than 100 businesses over the run of the show. It's largely responsible for the look and feel of the many other versions that have followed it, down to the stacks of money sitting next to the investors.
Finland: "Leijonan Kita"/"Leijonan Luola" ("The Lion's Jaws/Den")
The first time Finland tried a version of the show, it was titled the "The Lion's Jaws," but it only lasted one season back in 2007. A new version called "The Lion's Den," started this year with an entirely new set of investors and a new host.
The format and feel of the show are pretty similar to others around the world. In one episode, the Lions went in for 35% of a Finnish grandmother's cupcake business.
Japan: "マネーの虎" ("Money Tigers")
This is the original version, which ran from 2001 to 2004. Its tagline translates roughly to "no challenge, no success," according to the Japanese Wikipedia page.
The hallmarks of later shows are there, like the row of seated investors being pitched to.
However, the production value leaves something to be desired. The majority of the show consists of extreme closesups of people's faces, ofen with large and intrusive white text:
Poland: "Dragon's Den — Jak zostać milionerem" ("Dragon's Den – How to be a millionaire" )
The Polish version has the same look as the other European ones: a dark, intimidating room, a "dragon's den" theme, and money on the table.
In the U.S. and British versions, the investors are almost always the minority partner, but in the Polish version, the Dragons almost always end up with well over 50% ownership when they invest.
Spain: "Tu Oportunidad" ("Your Chance")
This is the newest version of the show, which began airing in late October. The show tends to follow the format of the U.S. and British versions, with lower investor stakes and without the campier aspects of some of the Eastern European versions.
Ukraine: "Акули бізнесу" ("Business Sharks")
The Ukranian version has a somewhat more industrial feel than some other Eastern European counterparts. One of the Sharks, Serhiy Tihipko, was a former candidate for Ukraine's presidency and is currently Vice Prime Minister.
U.S.: "Shark Tank"
Now in its fifth season, the U.S. version most resembles the Canadian show, both in the personalities and in the way it looks. What sets the show apart is the wealth of the investors, billionaire Mark Cuban being a notable example, and the size of the deals.
You rarely see other deals even approach the $2 million that Cuban recently invested.
Mark Cuban has had to sit through a lot of terrible pitches on reality business show "Shark Tank." But the one thing he can't stand is when aspiring entrepreneurs waste his time rattling off insignificant details about how their businesses got started.
"The worst thing you can do is give a long backstory," the billionaire investor recently told Business Insider. "It's not the time to talk about your struggles and hard work. Every entrepreneur has a similar story. You have to get right into the meat of the business."
Meanwhile, the best way to get Cuban's attention is to "have a real, operating company that has started to get real traction in a new industry that has a ton of upside," he said.
Take for example the Amini brothers' pitch this season on their mobile health app Rolodoc, which Cuban called the worst pitch in the history of the show. The two doctors spent a lot of time winding up about the medical profession and why they wanted to bring health practitioners a social network. But when it got down to it, they couldn't explain the business model, how they would market the product, or even how the customer would use it.
According to Cuban, "They had no company. No business. No clue."
Compare that to Michael Tseng's Plate Topper presentation in season four, Cuban's all-time favorite pitch. Tseng immediately launched into the QVC and Walmart.com sales of his food-savor invention, sparking the investors' attention. Then he was able to answer questions confidently and eventually to negotiate a deal.
The moral of the story? When pitching your business to investors, particularly to Cuban, stick to what they really care about: why your business is a smart investment.
"Shark Tank" has been making a splash on ABC since its premiere in 2009, however, it's far from the original version of the series.
There are at least nine other versions of the series throughout the world.
"Shark Tank" isn't the first wildly successful show that saw its start in another country.
Programs like "Whose Line Is It Anyway?" and "American Idol" took off in the United Kingdom before coming across the pond. Other shows had more surprising beginnings.
Long before Mark Cuban and Barbara Corcoran were receiving business pitches on "Shark Tank" ...
... there was "Money Tigers" in Japan.
The Japanese series first aired in 2001. It only lasted for three years, but its concept of having a row of seated investors getting pitched ideas was adapted in other versions of the show.
Though Claire Danes and Damian Lewis star in Showtime's drama-thriller "Homeland" ...
See the rest of the story at Business Insider
It doesn't take getting a deal to make it big on "Shark Tank."
Some of the biggest success stories from ABC's hit pitch show, now in its fifth season, walked away from the tank empty-handed. But it didn't matter. Their companies took off anyway.
"Shark Tank" experts say that, in many cases, the value of getting airtime on the show outweighs the benefits of taking a deal with one or more of the Sharks, which typically requires giving up a precious amount of equity.
"There's been a lot of studies done on how much it's worth to go on 'Shark Tank,' and there's a lot of consensus among veterans that it's worth somewhere between $4 and $5 million dollars in marketing exposure," says TJ Hale, a Phoenix-based entrepreneur and producer of the "Shark Tank Podcast."
That raw marketing value has led to a new class of contestants on the show: people who seem far more interested in filming a segment than haggling for a deal. "I've seen a few entrepreneurs this season where it's pretty evident that they're not interested in doing a deal, but they're extremely interested in the promotion that comes with the show," Hale admits.
For instance, there was Garrett Gee, who came on seeking a $1 million investment in exchange for a 5% stake in his code-scanning mobile app, Scan. After he revealed that the company had already raised $8.7 million, investor Daymond John had to ask: "Why are you exactly here? Is it just for exposure?"
Gee said no at the time, but seemed to suggest otherwise later. He told Business Insider that his decision to go on "Shark Tank" was about 50/50 in terms of seeking exposure vs. the chance for a deal, and he's previously said that some of the startup's investors didn't support Scan appearing on the show in the first place.
Either way, the exposure paid off. After the segment aired, Scan vaulted to the No. 1 spot among paid utilities apps and the No. 20 spot for all paid apps in Apple's App Store, and became the top-selling app in the Windows Phone store.
Scan won't be the last business that profits from "Shark Tank" exposure despite not getting a deal, and it certainly wasn't the first. With the help of Hale and Pierce Marrs, a sales and communications coach who also does a weekly podcast on "Shark Tank," we compiled a list of five companies that succeeded even though the Sharks turned them down.
Founder Shawn Davis didn't get any takers when he appeared in Season 2 asking for a $200,000 investment in Chef Big Shake, a gourmet seafood operation that proudly claims to be the "home of the original shrimp burger." Since the appearance, however, the company's sales have soared from their original $30,000 in 2010 to well over $1 million. What's more, Mark Cuban has called Chef Big Shake the one company he regrets not investing in. "He didn't get an investment, but now he's just killing it," Cuban said.
Derek Pacque, the 20-something founder of CoatChex, a ticket-free coat check system, turned down a $200,000 investment offer from Cuban on the first episode of Season 4. Cuban's offer matched the funding Pacque was seeking, but demanded a 33% stake — more than three times the equity he wanted to forgo. Since the company's appearance, CoatChex has landed contracts for huge events like the 2013 New York Fashion Week, Mercedes Benz Fashion Week, and the Super Bowl. The company is projecting to bring in $500,000 over the next six months through a variety of events, contracts, and new leads, VP of Business Development Adam Loos said.
Taylor, Brooks, and Tanner Dame — three brothers from Idaho — pitched their hand-crafted eyewear company to the Sharks in Season 4, but failed to get the deal they wanted. They walked away from two offers of $150,000 that both demanded more equity than they were willing to give up. Since their segment ran, their sales have more than tripled to $1.4 million, and they're projecting $2.5 million in sales in 2014, Tanner Dame said. The company also recently opened a flagship store in Boise, Idaho.
Dave Alwan appeared on Season 4 of "Shark Tank" to pitch his old-fashioned, farm-fresh meat company. He asked for $300,000 in exchange for a 20% stake. Alwan didn't give a great presentation, but the Sharks loved his product. He was doing $1.2 million in sales before the segment aired, and his sales more than doubled in the first six months after his appearance on the show. He's since launched the company on Amazon and QVC, and is projecting sales will reach between $5 million and $10 million in 2014, he told Hale. "He's had the Sharks call him and order from him and give him advice," Hale said. "He feels like he got the best of both worlds."
Despite the tremendous publicity value of appearing on "Shark Tank," sales and communications coach Marrs thinks the payoff ultimately depends on how you come off to the audience. "Just being on the show can be a huge boost for you, but it's only if the Sharks like it," Marrs says. "How much success you have if you do or don't get a deal depends on how much they like the product while you're on there."
When a husband and wife team walked into the tank on the most recent episode of ABC's reality pitch show "Shark Tank," the investors didn't seem too interested in Rick and Melissa Hinnant's lace sock business.
That was until the Hinnants announced that their company Grace and Lace had made $800,000 in 2012 and $1.25 million in the past 12 months.
With high profit margins and no money so far spent on advertising, the investors were suddenly quite interested.
The pitch got intense, however, when investor Robert Herjavec offered the Hinnants exactly what they wanted — $175,000 for 10% equity in their company. The catch: Herjavec wanted them to accept or decline the offer immediately, before hearing how the other Sharks might counter.
"I don't think it's fair to me ... I'd like an answer now," said Herjavec. "I've given you exactly what you're asking for. I'm a very nice guy, but don't mistake my kindness for weakness."
Would the entrepreneurs jump on a great offer or get greedy, hoping a better one might come along?
That's when investor Kevin O'Leary warned the Hinnants about the "bone in mouth" disease: when a dog looks into a pond, sees his reflection, and drops the bone he has for the reflection of the bone in the pond. The result is that the dog loses the only bone he has.
Indeed, the Hinnants hesitated and ended up losing the offer from Herjavec, but they had their eye on investor Barbara Corcoran from the beginning. Ultimately, they survived the "bone in mouth" disease and struck the deal they wanted with Corcoran.
Just getting on ABC's reality pitch show "Shark Tank" is an achievement in itself, bringing a great deal of publicity and new business to any growing company. But even confident entrepreneurs with solid revenues can get tripped up and lose potential deals if they're not prepared for the questions that are almost certain to come their way.
The investors on "Shark Tank," and investors generally, typically ask several specific questions to get the answers they need. Some are straightforward and some a bit trickier, but hopefuls would be wise to have excellent answers prepared or tailor their pitches to answer each right off the bat.
Here are eight questions that every entrepreneur should consider before pitching:
1. What are your sales?
This is always the first question. And just knowing the dollar figure isn't enough. Where are they coming from, on what platform, are they driven by promotions, and what sort of partners are you working with? Is the marketing working?
The number better be good, too. You can't charm the Sharks into liking a company that isn't likely to make any money.
Most importantly, the Sharks want to know if sales are growing and what your plan is to keep it that way. You should have a story about how expanding to new geographies, new product lines, or online has boosted or can potentially boost sales. The investors are profit-focused, and the more a business can scale, the better.
2. What do you bring to the table?
The investors on "Shark Tank" say over and over again that an investment isn't just in an idea or a business, but in the entrepreneur themselves.
That means being able to highlight a record of success, industry experience, or why you're dynamic enough to justify taking a gamble on. A strong personal story or a great narrative about the business, along with strong presentation skills, go a long way toward answering this question.
3. Why do you need our money?
This might be the question that trips up entrepreneurs the most. It's usually not enough to seek funds to simply grow the business and have the help of an experienced investor.
Instead, it's much more effective to know exactly what you could do with the amount of money you're asking for, and how it could help the company grow and scale rapidly. Whether it's building out production, hiring, or marketing, spell out exactly what the plan for the funding is.
If you're a fan of ABC's reality pitch show "Shark Tank," you know that the relationships between the hyper-competitive investors get heated at times.
Tensions tend to peak when multiple Sharks express interest in the same entrepreneur, and end up fighting with each other to invest their own money in front of millions of people.
Kevin O'Leary, sarcastically nicknamed "Mr. Wonderful," is often the Shark at the center of those fiery battles. He's best known for putting pressure on entrepreneurs at key moments with intense stare-downs and questions like, "What are you going to do?" He also seems comfortable low-balling contestants on the show to see if they'll accept.
With his brash humor and cold TV persona, it's no surprise that when the mother-daughter duo Tracey Noonan and Danielle Desroches of Wicked Good Cupcakes struck a deal with O'Leary in season four, they were nervous about working with the notoriously mean Shark.
"When we first made the deal with Kevin, it felt like we were making a deal with the devil," said Desroches at a recent promotional event for the show's new book, "Shark Tank Jump Start Your Business," in New York.
Since landing the deal, the Wicked Good Cupcakes entrepreneurs have paid O'Leary's investment back in full, but he still gets 45 cents a cupcake from their contract, in perpetuity. Today, the mother-daughter duo describes O'Leary as "an angel in disguise."
"He's been a tremendous mentor," said Desroches, adding that O'Leary is "very approachable, has a big heart, is very hands on, and loves Boston."
But when Desroches later said that O'Leary had promised to take them out to a celebratory dinner, investor Barbara Corcoran, who was also at the book release party, laughed doubtfully. "Kevin is the cheapest bastard you'll meet," she said, advising Noonan and Desroches to get their dinner "before he forgets about it."
Corcoran also added that a certain amount of the on-screen fighting among the Sharks is for show. The producers are always encouraging them to bicker more, she said, because it makes for better television. But that's not always easy for the investors to pull off. "We spend so much time together either investing our money or pissing it away that we have to be friends," she said.
It may be 2013, but that doesn't mean women shouldn't flaunt their sex appeal to get ahead.
That's the message New York real estate mogul and ABC's "Shark Tank" investor Barbara Corcoran was trying to get across to women in business at a recent promotional event for the show's new book, "Shark Tank Jump Start Your Business."
"If you've got sex appeal, big boobs, long legs... why wouldn't you use it?" she said. "It's like asking people who can see to not use their eyes."
Corcoran admitted to the audience that she got her first lucky business break because she was sexy.
At the age of 23, Corcoran was working as a waitress in a Fort Lee, N.J., diner when she met Ramon Simone, her future boyfriend and first business partner. Although Simone was much older than Corcoran, the two began dating and moved to New York City together, where Simone encouraged Corcoran to start a real estate agency.
He gave her an initial $1,000 investment. They split the company with Simone getting 51% and Corcoran getting the other 49%. Two years later, Simone announced that he was marrying Corcoran's secretary and the two parted ways, which led Corcoran to start her own enterprise, The Corcoran Group.
Today, Corcoran says her sex appeal put her on the path to business success. "I would've never gotten the $1,000 to start my business if I wasn't sexy," she quipped.
To further her point, Corcoran pointed to Daisy Cakes creator Kim Nelson, a petite blond, who also spoke at the book launch event. During season three of "Shark Tank," Corcoran invested $50,000 in Nelson's mail-order cake business in exchange for a 25% stake in the company and a $1 repayment per cake until her investment is repaid in full.
Immediately after the segment aired, orders poured in so fast that they crashed Daisy Cakes' website. Today, the sales are still flowing, with men placing the majority of the company's orders. Why? Corcoran says it's simple: Nelson has sex appeal.
So you want to be on "Shark Tank." How do you get there?
With a massive viewer base, ABC's hit pitch show is a priceless publicity tool for aspiring entrepreneurs. Experts believe an appearance on "Shark Tank" can equate to millions of dollars in free marketing exposure and numerous companies have become incredibly successful after going on air, even without landing a deal.
But it's not easy to secure one of those coveted slots on the show. Previous contestants estimate that ABC gets tens of thousands of applications for each season of "Shark Tank," which they whittle down to a handful of finalists for every episode.
To get a better sense of exactly what it takes to get on the show, we talked to Jamie Siminoff, inventor of video doorbell app DoorBot and a contestant on the fifth season. He applied to "Shark Tank" in March 2013 by filling out what he calls "an enormous handwritten application," which included questions about the business idea, operations, and plan for growth. He then submitted a rough video pitch to the producers after they expressed interest in his company. That pitch landed him a spot on the show.
Siminoff went into the tank seeking $700,000 in exchange for a 10% stake in his company, which helps homeowners identify visitors by streaming live video of the front door to a smartphone or tablet. He didn't get a deal, but gave a strong presentation that earned nods of approval from the Sharks.
Below, we've collected his best behind-the-scenes tips for getting your company on "Shark Tank."
1. Keep your pre-show pitch relaxed and down-to-earth.
When he and his team were filming the video they would submit with their application to be on "Shark Tank," Siminoff says they had "zero production quality." Instead, they tried to keep their segment high energy, entertaining, and down-to-earth. Siminoff thinks the approach paid off because the producers look for people who will be comfortable and personable in front of the camera.
2. Have a great one-liner.
Toward the very end of his video pitch to the producers, Siminoff said he casually threw in a funny rhyme: "Sharks, invest in me and the next time you hear a 'ding,' it'll be a 'cha-ching.'" The producers loved it, and Siminoff insists that's why they called him back. "You have to be smart about the product and also entertaining," he says. The line made it all the way to his actual pitch to the Sharks on the show.
3. Expect to invest a lot of time in getting ready for the show.
Siminoff estimates that he spent more than a month of full-time work on his "Shark Tank" appearance. He bought four seasons of the show on iTunes and watched all of them, flagging tough questions and entrepreneurs that performed especially well. He admits all the prep work was hard to juggle with running DoorBot. "Anything that's this big is very distracting to the team," he said. But it pays off once you're in front of the Sharks. The show really is filmed live, and Siminoff says the Sharks will talk over each other with rapid-fire questions.
With all of the time-consuming prep work, it's important to remember that even if you film a segment, it doesn't necessarily mean you will make it on air. A little-known secret of "Shark Tank" is that the producers film far more segments than they actually run. That means you could go through months of work and preparation to get to the final stages of production, but never see your efforts hit the air. It's a huge risk for a young business to take. "If we didn't air I wouldn't say it would have been devastating," Siminoff reflects, "but it would have been pretty bad."
How did a former NFL player-turned-entrepreneur with disappointing sales get an investment from the Sharks in the latest episode of ABC's reality pitch show "Shark Tank?"
It's not because Al "Bubba" Baker is a former professional athlete. Instead, it's because he knows how to talk about his challenges.
Baker's business, Baby Back Rib Steak, offers de-boned ribs that are ready to eat after two minutes of heating in the microwave. But here's the problematic detail: Baby Back Rib Steak only generated $154,000 in sales over the last year — even though Baker's been working on the idea for the last 20 years. When investor Barbara Corcoran asked him what happened in those undocumented 19 years, Baker admitted to quitting on his business before his daughter convinced him to give it another try.
Baker's personalized story stood out compared to the other hopefuls on the show, who didn't admit to any challenges or major competitors.
When the Sharks asked co-owners Alexander Mendeluk and Marley Merota, whose faux fur headgear business Spirithood generated $9.3 million in sales in the past three years, about their competitors, they couldn't pinpoint any. And when investor Mark Cuban asked entrepreneur Jan Goetelvk how he was going to compete for consumer dollars with Virtuix Omni, a treadmill-like virtual reality gaming system that had 3,000 pre-orders before it rolled out its first product, Goetelvk also couldn't answer.
These examples prove that even when your numbers are impressive, entrepreneurs still need to be able to predict future challenges and size up competitors.
While Baker's numbers were not as impressive, he was able to show product and process patents for de-boning baby back ribs and was honest about what he was up against. It ultimately secured him a $300,000 investment from Daymond John for a 30% equity stake, contingent on securing a licensing deal.
When asked about the recent Oxfam study that revealed the world's 85 richest people have equal wealth to the 3.5 billion poorest people, Canadian businessman and Shark Tank investor Kevin O'Leary said "it's fantastic."
"It inspires everybody, gets them motivation to look up to the 1% and say, 'I want to become one of those people, I’m going to fight hard to get up to the top,'" O'Leary said on Monday's episode of his business show. "This is fantastic news and of course I applaud it. What can be wrong with this?"
O'Leary left his co-anchor Amanda Lang dumbfounded. "Really?" she said after a long pause.
O'Leary essentially plays the Simon Cowell on Shark Tank, ABC's venture capital reality show. He regularly berates guests (and his co-sharks) and freely cites his wealth and business acumen. But this one still stunned us.
The video — which we first saw on PolicyMic— is flat out ridiculous.