Companies that appear on SharkTank can be catapulted to success or burned to the ground within a 60 minute pitch. But there are rare cases of startups that walk away empty-handed only to succeed without any Shark funding. Two Los Angeles companies shared their experiences on the show and the funding lessons they learned:
About John Tabis and The Bouqs
Founded in 2012 with the goal of disrupting the flower industry, The Bouqs cuts and delivers flowers straight from the farm on the day they are ordered. The company appeared on Shark Tank on May 2, 2014 and has raised $7.1 million in funding to date.
What stage was The Bouqs in when you began the show?
We filmed it when we were in the midst of a tack-on to our seed round. If they had invested, it would have been part of that round. The show aired as we were wrapping up the process on our A round of funding which was a $5.5 million round 8 months later. It certainly didn’t hurt that 11 million people found out about our brand a couple weeks before we closed the round.
Were you discouraged when you didn’t receive an offer from the Sharks? Was it bad publicity for the brand?
It wasn’t shown on TV, but at the end of the pitch, Barbara asked me “Hey you don’t see all that phased by this. Aren’t you a little upset that no one said yes?" And I said, "Barbara, I’ve gotten 75 no's already and I’ll probably get another 300 in the future of this company and if it is going to be bum me out that you guys said no then I’m dead in the water.”
Investors know that any given venture they might fund has probably been told no by a lot of other investors. That’s just normal. If you’re told no on national television or no in a boardroom of a VC Silicon Valley behind closed doors, I think VCs understand it happens all the time.
What advice would you give a young company when they begin to seek funding?
Think of it like dating. Each round is like dating and at the end of the day you have just one bride or groom. If you think of it that way, the nos aren’t painful because you know the right one is coming later. If you’re going to get discouraged and frustrated and slow down because you’re told no, then you’re probably not going to make it anyway.
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If you’re dating and you have a specific bride or groom in mind that you really want to impress (or you really want to be your investor), save them for last. Because as much as you practice and get feedback, your pitch will be lightyears better on your last pitch than it was on your first. And if you don’t nail it with your number one suitor, you don’t get another try.
Most businesses aren’t Facebook, Snapchat, or Uber where they are a rocketship from day one and funding can’t keep up with them. Most of the time entrepreneurs and startups have to go through a period where they have to make it work. Every founder has to get through that process. Even from the outside when you see so-and-so raised $6 million or $20 million or $100 million, from the outside that looks super easy but 99% of the time, it was not easy.
What was the final takeaway from the show?
The overwhelming response we got on Twitter and Facebook was “the sharks missed out, you guys are awesome, I can’t wait to buy.” and that kind of response was really reinforcing for the company, the brand, the team, and for myself because ultimately it’s the users and potential buyers that really matter in the long term.
About Jamie Siminoff and Ring
Ring was founded in 2012 under the name DoorBot. The Santa Monica-based company created a video doorbell that lets you answer the door from anywhere using your smartphone. Jamie appeared on SharkTank on November 13th, 2013 and has raised $9.81 million in funding to date.
What was your mindset before starting the show?
We took it as seriously as any business endeavor, maybe even more seriously. I even built the set in my backyard. We put together 300 questions after watching episodes, jotting down information and finding commonality in questions and how that would apply to what we were doing.
My biggest fear was, it is a TV show. They’re not there to help you as an entrepreneur, they’re there to make a TV show and TV shows are meant to be entertaining. So whether they make you look like shit or like a hero, either one for them is a fine outcome. The last thing I wanted was for our product to become the butt of a joke for SharkTank and the only way I figured I could combat that was by taking it really seriously and having an answer to every question.
Kevin offered you $700,000 but wanted 10% royalty, did you even consider the offer?
We were looking for $700,000 at that time. We were pretty serious about Kevin’s offer and I thought for a second we might be able to get him pretty close to a loan type of thing. But then he gave us a no. Mark was like, Jamie, you don’t need this, you can do better. It was cool.
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How do you gauge whether an offer is a good fit for the company?
It's really hard when you’re in it to say “no” to an offer that’s bad because it’s a lifeline. When you are making these decisions, you need to make sure you aren’t doing things that will cut off your air supply going forward. In perpetuity, you’re now having a percentage of your blood flow cut off and go to someone else which forever caps you.
I’d rather give away too much equity because at least that person has the shared values to do better with us. Giving away a cut off the sales will always be something that inhibits your growth. When you look back at big successes like Facebook and you ask, “why would they give 5% of the company to someone to do the logo when they’re going to be worth 100 billion?” Because at the time they were just trying to get shit done.
What was the best lesson Shark Tank taught you?
The amount of training that we did for that. You’re never trained to pitch your product in a Hollywood way. You meet VC and answer questions like “How much does it cost? What’s your plan? What’s your mission?” but you’re not pitching it to 7 million people on TV for 12 minutes. It taught us a lot about what we wanted the product to be for the consumer. You kind of go deep when you have to answer 300 questions in an entertaining way.
What advice would you give a young company when they begin to seek funding?
The best thing you can do is practice. Practice with people that in some way have a commonality to who you’ll be meeting. If you’re meeting with a VC, practice your pitch with someone who actually knows how VCs work. The one thing we don’t do is train enough.
You should be training like it is a TV show because the quicker the answers and the more clear you are the better you are going to get across your mission. And the reality is a VC meeting is only an hour and so you do only have that quick type to get across to them personality, culture, and where the business is going to go in 60 minutes.
What was the final takeaway from the show?
I talk to five or six people going on the show every year and the one thing they never plan on doing is the training. They always plan on going over basic questions the day before and I’m like, “No, take off 30 days from work and have five people pepper questions at you to experience it. Because at the end of the day there are people that don’t air after all that work and the difference for the company is huge."
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