Shark Tank delivers high-stakes pitches and on-air handshakes that promise life-changing investments – yet in practice, only around half of those deals are finalized. According to Shark Robert Herjavec, “In general, probably about 50% of the deals close”.
Early-Era Stumbles
So why do these deals fall through? The reasons vary and have evolved over the years. In the show’s early days, a lack of preparation was often the downfall. Entrepreneurs were unfamiliar with the expectations of the sharks and the intricacies of business negotiations. The lack of understanding about their own financials was one of the main reasons deals didn’t reach the finish line.
One notable example is ChordBuddy, where the founder literally sent a box of receipts when asked for a financial statement. Despite the entrepreneur’s passion, the lack of a solid business structure scuppered the deal.
Better Prep, Same Outcome
As the show progressed, entrepreneurs started coming in better prepared, with a clearer understanding of what the Sharks expected. Shark Tank began implementing a more rigorous vetting process, requiring a certain level of financial due diligence to get on the show.
Yet, even with a more prepared batch of entrepreneurs and a tough vetting process, the closing rate on deals has remained steady at around 50%. One of the main reasons for this, as Herjavec explains, is that entrepreneurs often change their mind after the negotiations. They get caught up in the excitement of the show, agree to a deal, and then wake up the next day second-guessing their decision.
This change of heart is allowed, as the deals on Shark Tank are not binding. The show is essentially a platform for a verbal negotiation. Entrepreneurs can back out when the cameras stop rolling, and many do.
Memorable deals that fell through
- Plated, a meal service company that went on to become very successful, initially secured a deal with Mark Cuban for $500,000 in exchange for 5.5% of the business. However, the deal broke down during the negotiation process.
- Another example is REMYXX, a company that produced sneakers from entirely recycled materials. Despite agreeing to give away 80% of the company for $50,000 to Daymond John, the deal fell through after the show.
- Deals also fall apart due to negotiations not aligning with initial expectations. Beard King (a grooming kit company) accepted an offer of $100,000 for 40% from Lori Greiner. Once again, the deal didn’t survive the negotiation process.
- In some unfortunate cases, the businesses didn’t survive after failed deals. Boot Illusions, a company that pitched a product to transform shoes into boots, failed to move forward with a deal with Barbara Corcoran. Boot Illusions has since gone out of business.
Here are the most recent, shark‐by‐shark post–due diligence close‐rates (based on a Forbes audit in March 2023)
- Barbara Corcoran: 60 %
- Mark Cuban: 50 %
- Daymond John: 50 %
- Kevin O’Leary: 50 %
- Lori Greiner: 29 %
- Robert Herjavec: 28 %
As fascinating as Shark Tank is, the real stories often start after the cameras stop rolling, in the challenging world of growing a business. The sharks’ bites might be fierce, but the reality of entrepreneurship is even fiercer.
