Firms reject ‘Shark Tank’ deals, still thrive

Entrepreneurs say autonomy more vital than cash infusion.

NEW YORK — With the cameras rolling, Daniel and Stephanie Rensing accepted an offer from a “Shark Tank” investor. But after they had time to think about it, they changed their minds.

Annual revenue for their company, The Smart Baker, is close to $1 million, up from $130,000 before their March 2012 appearance on the ABC reality TV show.

“Not doing the deal and having that exposure was probably the best scenario for us,” says Daniel Rensing, CEO of the Rockledge, Fla., company that sells aprons, parchment paper and other baking equipment.

Dreams of investor money have induced more than 150,000 businesses to apply to be contestants on “Shark Tank,” where entrepreneurs pitch to cast members including Barbara Corcoran, founder of a prominent New York real estate brokerage; Daymond John, founder of the clothing company FUBU; and Robert Herjavec, founder of the technology conglomerate Herjavec Group.

Entrepreneurs may be all smiles when they get an offer on the show, but the deals aren’t set in stone. Negotiations start soon after episodes are taped. Contestants can walk away if they don’t like the terms.

“When we shake hands on a potential deal on Shark Tank, the romance runs high and everyone’s excited about what could be,” Corcoran says. “In the end, the entrepreneur is in charge.”

During the first five seasons, 374 contestants appeared on TV and investors made 190 offers, according to ABC. Forty-eight contestants turned down offers during taping, executive producer Clay Newbill says. They haven’t tracked how many deals fell apart during negotiations.

The producers ask entrepreneurs and investors to make their best efforts to close deals, Newbill says.

“But we understand, just as in the real world, the reality is that not all deals will close,” he says.

Corcoran offered $75,000 for 40 percent of The Smart Baker, and a 5 percent sales royalty, during the 2011 taping. During negotiations the Rensings, disagreed with Corcoran about the target market.

“We were sticking to our guns on the market we served,” Rensing says.

Corcoran says she was disappointed, but she knows a rejection is an occupational hazard on “Shark Tank.”

“Nobody likes to be turned down, especially me,” she says.

The Smart Baker has thrived without her money. In the following year, revenue grew to $600,000. The episode also helped the company get noticed by Food Network and other media. Reruns provide a sales bump.

But a “Shark Tank” deal isn’t just about money; it al-

Shark

geologists figure out whether sub-sea rock formations are likely to contain fossil fuels worth drilling

The federal Bureau of Ocean Energy Management approved the seismic blasting plan for the Atlantic, saying there “has been no documented scientific evidence” that the tests harm marine mammals.

But scientists, including Doug Nowacek, an associate professor of conservation technology at the Duke University Marine Lab in Beaufort, N.C., argue that there is a risk and not nearly enough research to declare the booms harmless.

NOAA is taking public comments on the proposed new habitat area. The current critical habitat area for North Atlantic right whales is just a narrow stretch from northern Florida to southern Georgia, along with two areas near Massachusetts’ Cape Cod. There are only about 450 of the whales, and they’re “critically endangered,” according to NOAA.

The proposal, spurred by a court order after conservation groups petitioned to protect the whales, would create a greatly expanded Southeast critical habitat area up to North Carolina, covering what NOAA found to be areas where the whales give birth.

The critical habitat would stretch dozens of miles from the coast, almost to the 50-mile boundary off the Carolinas and Georgia that the Obama administration proposes to open to oil and gas leasing. North Carolina Gov. Pat McCrory is considering making a push to allow drilling closer to the coast.

NOAA is also proposing a separate enlarged critical habitat area for the whales off the coasts of Massachusetts, New Hampshire and Maine, considered to be important feeding areas.

Daniel Rensing and his wife, Stephanie, owners of The Smart Baker, turned down an offer of $75,000 for 40 percent of their company from a “Shark Tank” investor after they disagreed on their target market.

GEORGIA DEPARTMENT OF NATURAL RESOURCES Oil and gas companies oppose expanding the critical habitat area for right whales in coastal waters from Georgia to North Carolina.