By: Abdihakim Mohamoud
The famous entrepreneurial themed reality show ‘Shark Tank’ is notorious for enhancing some of the biggest businesses out there. But what exactly does being on the show do for entrepreneurs?
Landing a deal with one of the sharks can obviously lead to tremendous exposure for your company. However, even appearing on the show at all is extremely beneficial marketing-wise. TJ Hale, producer of the ‘Shark Tank Podcast’, reportedly said that even an appearance on the show results in $4-5 million in marketing exposure.
Another former ‘Shark Tank’ appearance, Derek Pacque, is a perfect example of not needing funding to succeed. He turned down a deal from billionaire Mark Cuban for 33% of his coat business, claiming his company wouldn’t grow after the deal. The “Shark Tank Effect” worked its magic, and Pacque ended up at Fashion Week for his first gig.
In recent studies, a mind-boggling 94% of ‘Shark Tank’ appearances were successful after their feature, solidifying that the most obvious reward from appearing is sales. PostureNow and The Bev Buckle did $50,000 and a whopping $300,000+ after they were featured on the show.
Appearing on ‘Shark Tank’, not just produced thousands in sales for entrepreneurs, but also attracted investors who watched the show. However, it is required that business owners must give up 5% of their company just to appear on the show—without guaranteeing traffic to their company.
Not every entrepreneur leaves the show better off than when they arrived. An example of a relatively bad deal is Jay Kriner, who took the shark’s deal, giving up half of his company for $50,000, seemingly undervaluing his equity, and basically giving his company away.
All in all, the majority of entrepreneurs believe that an appearance is very well worth it and beneficial. However, business owners must be aware of the risks that can come with it, and be mindful of the deals they are being offered, and whether it’s worth it or not.
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