Want to Go on Shark Tank? Here's What You Need to Know.
ZinePak co-founders Brittany Hodak and Kim Kaupe appeared on ABC's Shark Tank last Friday, walking away with a $725,000 joint investment from Robert Herjavec and Lori Greiner. But while their segment may have just aired, the journey to those few minutes of airtime started nearly a year ago.
ZinePak, which works with popular artists, celebrities and brands to create custom products such as magazines, collectibles and mixed-media packages they can sell to their super fans and took in more than $3 million last year, caught the attention of the show's producers. After reaching out to the pair, Hodak and Kaupe auditioned early last summer and then flew to Los Angeles in September to film with the Sharks.
Watching the segment, it's clear that the Sharks understood the company's appeal: Kevin O'Leary, or "Mr. Wonderful," made an offer early (he wanted a 30 percent stake), as did Daymond John (he eventually came down to a 20 percent stake), although both offers were trumped by Herjavec and Greiner, who agreed to invest a combined $725,000 for a 17.5 percent equity stake.
Hodak is glad she and Kaupe decided to go the Shark Tank route as, having walked away with a deal with not one but two Sharks, "it was a game well played."
Still, the process was long and arduous. For entrepreneurs flirting with the idea of auditioning for the show, Hodak and Kaupe have this advice to offer.
After Hodak and Kaupe had auditioned for the producers and were confirmed to pitch to the Sharks, the waiting game began. The producers required they reserve 35 potential days to shoot in Los Angeles, which meant that for two months they couldn't make any important plans, either personal or professional, because "we knew at some point we'd only have five days warning and then we'd have to be in LA to film," says Hodak.
Entrepreneurs who want to go on the show should understand that it is a time consuming process, says Kaupe. The pair was in Los Angeles for a total of five days, during which time they had to make sure their business was operating smoothly without them.
Even after filming, there was no guarantee the segment would air. Out of the 100,000 companies that applied for a spot in the sixth season of the show, 200 were invited to Los Angeles. Out of those 200, only 120 companies' sessions with the Sharks were televised. Hodak and Kaupe only learned they'd made the cut two weeks before the episode aired.
Be prepared to work hard.
To plan for the show, Hodak and Kaupe worked with their certified public accountant "to make sure we knew our numbers backwards and forwards," says Hodak. Being fuzzy on numbers, she feels, is the "number-one thing entrepreneurs get wrong." In addition, the pair spent countless hours honing their presentation of ZinePak's origin story, its products as well as its current value and future potential.
After they'd made it past the audition phase and were slated to meet the Sharks, more work bubbled to the surface. For ZinePak's products to appear on television, "we had to collect close to 75 release forms for each cover," says Hodak. In addition, the producers asked that they present tailor-made ZinePak to each Shark, complete with original copy and insert items, an extremely time-consuming task.
Do your due diligence.
Before pitching, Hodak and Kaupe extensively researched the Sharks' backgrounds, including the companies they'd invested in and those they hadn't, as well as their backgrounds before the show. The goal was twofold: First, to get a sense of who would be most interested in ZinePak, but more importantly, to see if they should accept a deal if one was offered.
"We needed to figure out which of the Sharks we would be most comfortable having as a business partner. It's a serious thing -- we had to fully vet each one of them before filming," says Hodak. Adds Kaupe, "It's a relationship. You don't want someone who is only investing for the money, you want someone because they believed in you, they see your vision."
Going into the Shark Tank, Hodak and Kaupe had worked out dozens of possible contingency plans. "We had talked about every possible scenario: 'What if this happens, what if that happens,'" says Hodak. Before taping, they agreed that if two Sharks teamed up to make a deal, they would be willing to give away up to 20 percent in equity. Because every scenario was thought of and planned for beforehand, "We felt a lot more confident. It wasn't easy for us to get rattled."
Understand that the real work begins after you've pitched the Sharks.
As mentioned, Hodak and Kaupe only learned that their segment would air two weeks before it did. Preparing for the onslaught of attention and calls made those 14 days a frenetic flurry of preparation and troubleshooting. "It was like preparing for war," Kaupe says. To better anticipate what was coming, they spoke with past Shark Tank companies, including the entrepreneurs behind Bombas, a sock company that received an investment from Daymond John earlier this season. After Bombas' episode aired, the company received 500,000 unique website hits and was inundated with thousands of emails.
"You see some of these companies [that go on the show] and you think, my God peanut butter company from Kansas, I really hope you have your shit together after this show airs," says Kaupe, who went to great lengths to ensure that ZinePak's staff was prepared for the post-Shark Tank craziness. Practical matters -- such as load testing the website to ensure it wouldn't crash and setting up a funnel structure for incoming calls from fans and potential business partners, among others – were taken care of before the segment aired.
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