Since 2009, Shark Tank on ABC has been my favorite show on television. It's truly amazing to watch these everyday people get up on stage in front of the "sharks" and the millions of people who are watching from home and pitch their product and the numbers that led them to their valuation and their ask. These individuals are all in pursuit of the "American Dream" and are in front of super successful angel investors that can make those dreams come true by investing their own capital and opening up their networks to these budding entrepreneurs. In exchange for an investment, the sharks in return get a percentage of the company (ex. a $200,000 investment for 15% of company). While it may seem too good to be true, we have a personal friend who was on the show and received an investment from one of the sharks that ultimately changed the direction their company was headed in and changed the trajectory of his life forever. Today this person is running multiple businesses and crushing it all due to a humble start in their living room and an early investment from one of the "sharks."
Top Shark Tank Investments of All Time:
Bombas: Daymond John invested $200,000 for 17%. Sales $225 million.
Scrub Daddy: Lori Greiner invested $200,00 for 25%. Sales $209 million
Squatty Potty: Lori Greiner invested $350,000 for 10%. Sales $164 million.
Simply Fit board: Lori Greiner invested $125,000 for 20%. Sales $160 million.
The Original Comfy: Barbara Corcoran invested $50,000 for a 30%. Sales $150 million.
Tipsy Elves: Robert Herjavec invested $100,000 for 10%. Sales $125 million.
The Bouqs: Robert Herjavec invested 3 years after the show. Sales $100 million.
Sleep Styler: Lori Greiner invested $75,000 for 25%. Sales $100 million.
While none of us will likely ever be a featured "shark" on Shark Tank, we have the opportunity to have a similar effect by participating as an angel investor in private companies early on in their formation. By investing in private companies, you will also own a percentage of the company and will have a chance to follow along from afar while the company goes through many ups and downs to hopefully make it and one day return a premium on your investment much like the successes listed above.
Although the "sharks" on Shark Tank have had many successes, there are also companies that they have invested in that are not profitable or have failed completely. However, by investing in multiple companies and not putting "all of their eggs in one basket," they spread out their risk and allow the successes to make up for the failures plus return a multiple on their original investment many times over. Failure is inevitable and while failures generally happen in the first few years of a company, businesses that are successful will take significantly longer to mature and provide exits. Therefore, it's important to not be discouraged by failures outweighing positive outcomes during the first few years of angel investing.
Top Shark Tank Failures and Misses of All Time:
Failures:
ToyGaroo (toy subscription service): $250,000 investment by Mark Cuban and Kevin O'Leary
ShowNo Towels: $75,000 investment for 25% equity by Lori Greiner
Sweet Ballz (cake balls): $250,000 investment for 25% by Mark Cuban and Barbara Corcoran
Body Jac (fitness machine): $180,000 investment for 50% by Barbara Corcoran and Kevin Harrington
Breathometer (breathalyzer): $1 million investment for 30% equity by all 5 sharks.
Misses:
Doorbot (Ring doorbell): no deal received on the show. Was bought by Amazon for $1.2-1.8 billion.
Coffee Meets Bagel (dating app): Mark Cuban offered to buy 100% of the company for $30 million. Deal was rejected and now the company is worth around $150 million.
Chef Big Shake: no deal received. Sales currently over $5 million/year
The data shows that your top 1-2 investments will provide the majority of your portfolio's return and that if you invest in 25 companies you have a 90% probability of earning annual returns of at least 25-30%. That percentage increases to a 95% likelihood of earning annual returns of at least 25-30% if you invest in over 45 companies. To keep it simple, the more companies you invest in the more likely you are to have that one or those ones that produce amazing returns and make up for the ones that don't amount to anything or produce very little.
However, finding a good, consistent deal flow and gaining access to deals can be difficult to find especially without access to other founders, angel investment groups, or VC firms. That's why finding someone who has a good network and a sustainable deal flow is very important. These people generally have a unique skill set to offer in addition to capital that is a value-add for the companies they choose to invest in. Often times they may even be founders of start-up companies themselves and able to share connections and valuable insights learned through their journey with the founders of the companies that they are investing in.
If being an angel investor or a "shark" is of interest to you there are multiple ways to get started. The quickest and easiest way to do so is to join our mailing list directly on our website and you'll be included on upcoming newsletters and investment opportunities. We can also schedule a time to talk on the phone to make sure that this is a good fit for what you are looking for. Reach out to us today and get started investing like a shark!
Side note: one of our portfolio companies, Proper Good, was featured on Shark Tank previously and received a deal from Mark Cuban for a $400,000 investment. Let's hope that one day Proper Good will be featured on a "Top Shark Tank Investments of All Time" list or be like Plated who was previously featured on Shark Tank and three years later sold to Albertsons Companies for $300 million resulting in the largest exit for a business in the history of Shark Tank!
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