Shark Tank Deals Fail

A breakdown of what happens after entrepreneurs shake hands on a deal with Sharks on the show, based on Julia Cheek's experience and insights.

Deal Completion Statistics

• Over half of deals never come to fruition after the handshake
• About 25% of deals change terms during due diligence
• Only about 25% of deals close on the original terms shown on TV

Due Diligence Process

• Each Shark has their own management company handling deals
  • Mark Cuban Companies
  • Lori Greiner's company
• Show conducts initial due diligence
  • Has venture analysts on staff
  • Vets companies before they pitch on show

Deal Structure Example (Julia's Case)

• Initial valuation: $20M post-money
• Original deal terms:
  • 5% equity
  • Line of credit at 8% interest rate
• Final deal terms:
  • Terms changed but were "better for company and Lori"
  • Specific terms undisclosed

Show Format Reality

• Actual pitch length vs. aired segment
  • Full pitches can last 1-3 hours
  • Edited down to 5-7 minutes for TV
• Negotiation flexibility
  • Entrepreneurs can take time to think
  • Can consult partners or call friends
  • Can exit discussions if needed
• TV considerations
  • Expected to negotiate for entertainment
  • Some segments edited out for time