So, “Shark Tank” Contestants Don’t Always Get The Investor Money They’re Promised
6:59 pm, February 15th | by Hillary Reinsberg
We’re not so secretly fans of the ABC show Shark Tank, on which aspiring entrepreneurs pitch their (often ridiculous businesses) to a team of “sharks,” or basically, deep-pocketed investors like Barbara Corcoran and Mark Cuban. If the sharks like the product, they’ll offer some funding in return for a certain percentage of equity in the company. The entrepreneurs are free to negotiate and then choose to accept or reject the offers. When it works, it results in some ecstatic entrepreneurs. But that is, if they actually get paid.
From what you see on the show, the deals are usually done with a handshake or nod, followed by some cheering. We’d always assumed that there was some signing of contracts backstage. But this is why people tell you not to assume things. Especially when it comes to reality TV.
For example, one entrepreneur on the show, Megan Cummins, accepted $55,000 from one of the sharks in exchange for 20 percent equity in her soap company, plus a $50,000 first-year salary tacked on. The only problem: she tells CNET the money never came through. Once the episode finally aired, she contacted the shark who offered her the money, who then decided he wanted 50 percent equity, for the same amount of seed money. She turned the offer down. Wise, you’d think, except…a bunch of retailers asked if they could stock the product. Which they couldn’t because Cummins couldn’t produce the product without any money.
As we’ve learned from countless seasons of The Bachelor and The Bachelorette, reality TV relationships don’t always work out.