shark tank is one of the most popular shows on TV averaging millions of viewers during each episode than airs and gaining Millions more views on Hulu in YouTube as well the show has featured companies that have gone on to be used by millions around the world and companies that have done billions of dollars in Revenue however there's harsh realities of the show that you've probably never thought about such as the fact that the majority of deals that you see agreed upon during the show either eventually fall through or have the their terms greatly altered or the fact that tens of thousands of companies apply to be on the show every single year in hopes of receiving the massive exposure that comes with appearing on Shark Tank but is all exposure that a company receives actually healthy for the company there have been companies that were successful prior to appearing on Shark Tank that ended up going bankrupt as a result of the attention Shark Tank put on their company additionally perhaps the most significant Shark Tank deal failure involved having f federal agents investigate a company that made a deal on Shark Tank in this company's case they probably wish they never experienced the exposure and attention that came with appearing on the show let's dive into the harsh reality of shark tank now despite the overall theme of the intro and the title and the thumbnail there actually are some massively successful deals in companies that have been produced as a result of their appearance on Shark Tank for example bombas a sock company that also makes bras and t-shirts is the most successful company to ever strike a deal on Shark Tank when bombus appeared on Shark Tank in 2014 Damon John agreed to invest $200,000 for a 17.5% stake in the company meaning bombas at the time was worth roughly $1.1 million nearly a decade later in 2023 the company surpassed $1 billion in lifetime revenue and has also donated over 100 million pairs of essential Appel items to homeless shelters other insanely successful companies that have appeared on Shark Tank include Scrub Daddy which received an investment from Lorie grinder for $200,000 at a $1 million valuation and has since grown to a $300 million valuation and The Squatty Potty which also received an investment from Lori that was eventually acquired by a private Equity Firm and has sold over 8 million stools now these super successful Shark Tank deals are also super rare in addition a significant amount of deals that are agreed upon during the filming of Shark Tank never even come to fruition according to a report conducted by Forbes roughly half of the entrepreneurs who received a handshake deal during the filming of Shark Tank reported that the deals actually fell through after further talks with the sharks occurred additionally another 15% of the handshake deals ended up closing with different terms than what was originally agreed upon that leaves just roughly 35% of deals closing under the same conditions they were agreed upon during the filming of the show in some cases the entrepreneurs admitted it was a mutual decision between them and their shark to drop the deal however the overwhelming majority of entrepreneurs revealed that their deals fell through because of the shark's decision to pull out sometimes with no explanation or the entrepreneur decided to back out after the initial terms of the deal changed which would have left their businesses at risk handshake deals closing obviously depends on which shark is involved as some sharks are more likely to back out than others Barbara corkrin is surprisingly the most likely to close a handshake deal with 60% of the entrepreneurs interviewed by Forbes saying that their deals with Barbara closed I say surprisingly because if you watch sharting videos on YouTube you know there's a runny joke about how Barbara rarely ever offers any deals on Shark Tank the comments under any shark tank video are always poking fun at how Barbara will find any excuse to not make an offer however it seems that when Barbara does make a handshake deal she is the most likely to stick to her word damid John is the second most likely to close handshake deals at 56% followed by Mark cubin who has invested in more than double the number of companies as the other sharks at 54% the least likely sharks to follow through on their handshake deals are Kevin o at 45 5% Robert at 30% and lastly Lori at 29% both Mark Cuban and Damon John have said that the reason a number of their deals have fallen through was because more information was learned about the company through due diligence after the deal was initially agreed upon this scenario occurring is most likely due to entrepreneurs on Shark Tank making their companies seem as enticing as humanly possible which isn't necessarily something that they shouldn't do but they may get caught up in the moment and the adrenaline and maybe inflate some of their numbers or future projections basically during the pitch the sharks have to take the entrepreneurs word as fact for everything that they're saying about their company and then afterwards once the shark and their team do their due diligence on the company they may find out that it was too good to be true and back out of the deal when it comes to the due diligence that the shark and their team do the entrepreneurs reported that it often felt like an extremely drawn out process that left them wondering whether the shark even wanted to invest in the first place one entrepreneur who talked anonymously reported that Dam John would not respond to questions about their deal after they came to an agreement during the filming of the show when they finally heard back after the show aired Jon changed the deal entirely and would not negotiate the deal was eventually abandoned as a result stricks a makeup company that struck a deal with Robert for $600,000 in exchange for 10% % Equity of their company was surprised to be told after the filming of the show that Robert would not be moving forward with their deal they told us they were not moving forward with no explanation why even though we asked several times Fried Green Tomatoes a food truck business which struck a deal with Barbara on season 11 still has not gotten a definitive answer from her on whether or not she is going to actually invest even though the episode aired over 4 years ago an additional problem that I'll berne's encountered when it came to their deals with the sharks is that the Sharks would try to sneak powerful Clauses into their contracts that would give them way too much control over the company these Clauses included vetos that gave the Sharks control over hiring and firing fundraising and even the sale of the company Beyond Sushi a vegan restaurant business struck a deal with Lori and guest shark Matt Higgins in season 10 for $1.5 million they ultimately decided to walk away from the deal due to predatory Clauses that Lori and Matt ended up including in the contract another anonymous entrepreneur said their deal with Robert contained a Redemption rights Clause that was not mentioned when they made the handshake deal on air this Redemption rights Clause gave Robert the option to pull his money out of the company in 3 years at whatever value his ownership was worth at that time Robert would not do the deal without this Redemption rights Clause so the entrepreneur walked away away whether or not the entrepreneur strikes a deal with a shark the entrepreneurs company gets an incredible amount of free exposure Shark Tank season 15 receives an average of 3.23 million viewers per episode with a high of 3.87 n million viewers watching a single episode during the season and not only does the show air live on cable TV but the episodes are available to stream on Hulu and clips are uploaded to YouTube which frequently gain millions of views altogether this is an unreal amount of exposure for a company and nine times out of 10 is the most amount of eyes these companies have ever had on their product or service but obviously being that the exposure a company will get on Shark Tank is quite substantial it's far from easy for a company to actually appear on Shark Tank every year roughly 40,000 companies applied to Beyond Shark Tank after this massive application pool is Thoroughly screened by producers companies that make it to the next step of the audition process will then have to fill out a 17-page application kit produce audition tapes and go back and forth with producers over email and video calls after this monthlong process only 158 companies are chosen to pitch their company to the Sharks for each season but even if you beat the odds and are granted the opportunity to pitch your company it's not even guaranteed that your pitch will end up airing on the show due to time constraints as well as the fact that sometimes pitches can end up being boring or uneventful and therefore would not make good television a number of pitches don't end up airing on the show on average only 88 companies out of the 158 than give a pitch on any given season will end up having their pitch aired on TV that means that when a company initially applies to Beyond Shark Tank they have a 0.4% chance of being granted an opportunity to pitch and just a 0.2% chance of their pitch being aired on the final edit of the show at the end of the day shark tank is an entertainment product so while this may not seem fair to the entrepreneurs who give a pitch but don't get any airtime it's unfortunately just part of the game it is worth mentioning that just because a pitch doesn't get aired on TV that doesn't necessarily mean the company didn't receive an investment from a shark a company May strike a deal with a shark however the producers may not feel it with TV V worthy and may end up cutting the pitch from the final edit so I talked about how much exposure companies get on Shark Tank but is any and all types of exposure actually good for a company some companies appear on Shark Tank and end up getting ripped up or embarrassed by the Sharks Ryan Naylor founder of a wash company called ESO that used negative ion energy to improve balance and decision-making was torn apart by Mark cubin during his pitch no thanks go ahead you keep it it's Dallas Mavericks blue just for you that's okay you keep it okay thank you Mark are you allergic to positive negative ion stuff no I'm allergic to scams seriously this is not new it's been disproven there's athletes that wear it it's a joke it's a scam it's not real I'm out okay thank you what do you really think Mark I think it's a joke it's a scam and I'm still outo ended up closing and seizing production after Ryan's appearance on shark day another instance of an embarrassing appearance on Shark Tank that negatively affected the company is pavlock which creates a device that helps users eliminate bad habits by giving them a shock anytime that bad habit is performed the problem with pavlocks pitch didn't have anything to do with the product necessarily but rather the owner of the company Manish SEI C and Kevin oy got into a heated argument over the way that CI was acting which ended up with Mr Wonderful having some Choice words for CI I'm going to solve the problem in Deal structure I'm very creative I'll give you the $500,000 of debt on the company okay you're going to give me the 3.14% as Equity today and you're going to walk out of here with a sharp tank deal this is the problem um damn there's a problem there's no problem so the problem Mr Wonderful is that it's we're not focused on the money we're focused more on the Habit focus on the money you've come to the wrong place my friend I'm here to make money going finish Kev our biggest thing our biggest goal is to break bad habits around the world and Mr Wonderful like I just I I can't work with you why not I'm just worried that if we work together like him I do like him as a person but I feel like as an investor in the company would be really bad manise you didn't want an offer here today absolutely want an offer I Absol and why don't you want the structure of that offer why not the structure is actually quite good uh it's the person it's the person I feel like I would take an offer from anybody besides Mr Wonderful Manish you're an get the out of here oh um okay well if you are you all out yeah we're all out done mon W want to be you pavlock initially was hurt public relations Wise by this embarrassing appearance on Shark Tank however the company remains operational to this day when Shark Tank originally aired in 2009 the production companies MGM and Sony took 5% Equity of each company they gave a pitch it was MGM and Sony's way of getting paid for granting the company millions of eyes to view their product or service if the company didn't want to give up 5% Equity no problem MGM and Sony alternatively allowed companies to pay them 2% of future sales for the remainder of the company's life that's not even the best part though companies had to give up either 5% Equity or pay 2% of Revenue in perpetuity even if their pitch didn't end up airing Yes you heard me right think back to the breakdown earlier of the 88 out of 158 companies per season who ended up having their pitch air on the show for the 70 companies who gave a pitch to the Sharks but weren't lucky enough to make it onto the final edit of the show they still had to give up 5% Equity or 2% of all future sales and they got literally nothing in return for it unless of course they ended up striking a deal with the sharks thankfully for the entrepreneurs in 2013 Mark Cuban came in clutch and demanded that MGM and Sony stop charging companies just to appear on the show Cuban's reasoning was that this flat fee of appearing a shark tank was discouraging better prepared companies from appearing on the show because they didn't want to give up so much Equity or Revenue MGM and Sony agreed to drop the requirements so ever since 2013 companies that appear on Shark Tank don't have to give up any percent of their company or future sales unfortunately for the companies that appeared on the show before 2013 the original agreement that MGM and Sony made them sign was still valid super unfortunate for them so after all the hard work that the entrepreneurs go through to appear on Shark Tank how come the sharks are super cautious about investing in their companies well it's probably obvious but it's because the overwhelming majority of startups fail so the Sharks don't want to lose their money groundbreaking stuff here I know roughly 90% of all startups fail so investors are not just going to be throwing their money around recklessly but in the case of Shark Tank there have been a number of rather embarrassing failures that have caused the Sharks to become even more cautious than ever perhaps the most embarrassing failure of a company to appear on Shark Tank was the Breathometer the Breathometer was a smartphone app that measured blood alcohol levels and was marketed as a way to make the public safer surprisingly prometer got a total of $1 million combined from all five of the Sharks unfortunately after the deal went through the Federal Trade Commission got involved and shut down the company due to unfulfilled orders as well as the app reporting incorrect blood alcohol levels to make it even worse the company was also ordered to refund all of the customers who had bought the app another company that experienced a massive failure after Shark Tank was toy Garo toy Garo was actually a fairly successful company then allow people to rent toys for their kids and they raised $250,000 from Mark cubin and Kevin o however their appearance on Shark Tank actually doomed the company because of how enticing the company's service was to viewers of Shark Tank toy Garo was unable to keep up with the sudden influx of demand that they experienced after their pitch aired on the show the company ended up having to shut down due to them not being able to keep up with orders and having to pay too much in shipping cost due to the overwhelming amount of new orders they got the company's founder Phil SMY believes that his company's participation in Shark Tank was actually detrimental for his business when you think of Shark Tank you probably think of the success stories like bombas Scrub Daddy or The Squatty Potty it's important to also remember the countless other companies that had a shark tanking experience that was far from ideal whether it be due to an embarrassing pitch not striking a deal or getting a handshake deal but the deal eventually falling through that is the harsh reality of Shark Tank um okay well if you are you all out e