Andy Dehnart
That some entrepreneurs go on Shark Tank for the publicity, not a deal, is not a surprise. The sharks even call some people out on that, like those who insanely overvalue their companies or ask for way too much money, ensuring they don’t get a deal.
But while as many as half of all deals fall apart during due diligence, some entrepreneurs make deals and then back out, and still profit. This allows them to reap the benefits of publicity and the perceived association with a shark without being embarrassed on television.
The AP reports on this and uses just one example, The Smart Baker, whose annual revenues have increased almost 10 times what they were before their appearance on the show. (They offered a cheat sheet apron, and also have a range of other products.) Its CEO, Daniel Rensing, admitted, “Not doing the deal and having that exposure was probably the best scenario for us.”
What’s remarkable here is the entrepreneur’s honesty about what happened. Barbara Corcoran seemed resigned to this as part of the reality of the show, “When we shake hands on a potential deal on Shark Tank, the romance runs high and everyone’s excited about what could be. In the end, the entrepreneur is in charge.”
And executive producer Clay Newbill told the AP that producers “understand, just as in the real world, the reality is that not all deals will close.”