Businesses that were rejected on ‘Shark Tank’ but became very successful

The attrition rate among start-up companies can be staggering with one in five going under in the first two years according to the US Bureau of Labor Statistics climbing to 65 percent after ten years in business. That’s why it’s good to get the support of knowledgeable investors as well as their financial backing. However, even the gurus of business don’t always see the full potential of a new idea, nor the risk, just ask the sharks from ‘Shark Tank’.

After 14 seasons, the star investors have forked over a significant amount of money to fund help entrepreneurs get their companies off the ground with some spectacular successes. However, one of the biggest successes was turned down by the panel of investors, whose entrepreneur eventually came back as a shark himself.

Businesses that were rejected on ‘Shark Tank’ but became very successful

While there are several entrepreneurs that have gone on ‘Shark Tank’ and either been turned down, or they themselves have walked away from investment offers or outright purchases, here are just a selection of the misses.

The Lip Bar

While not the most successful of the businesses that were turned down by the sharks, so far, the entrepreneurs behind The Lip Bar have grit and have built their brand and continue to do so. Founders Melissa Butler and Roscoe Spears are also worth mentioning due to the verbal shellacking they took when presenting their beauty products to the panel.

They went in asking for $125,000 in exchange for a 12 percent stake and got no takers with Kevin O’Leary even saying: “the chances that this is a business are practically zero.” However, they’ve gone on to earns $1.6 million in revenue annually. The brand’s cocktail themed lipsticks are sold at Target and Walmart stores nationwide and the company was valued at $7 million in 2018, just three years after appearing on ‘Shark Tank’.

Hammer & Nails

Michael Elliot was running a business that was breaking even and valued at $1 million in 2014 when he went on ‘Shark Tank.’ But he wanted to put the “man” into manicure and take his man-cave nail salon concept nationwide. The sharks, while they loved his life story, for one reason or another none of them saw Elliot’s dream coming to fruition, so no deal. However, he got financial backing of the $200,000 that he was asking for from eight viewers of the episode.

By 2021, there were 12 franchises in addition to the original store with 13 more in the works. Revenue had grown by 270 percent to $25 million and the company was worth $100 million. The company’s web site now lists 48 locations in 15 states across the US and one in Washington DC.

Kodiak Cakes

Kodiak Cakes started as a family recipe that Joel Clark sold as an eight-year-old in his little red wagon around the neighborhood. In 2014 he turned it into a business with co-founder Cameron Smith. They asked the sharks for a $500,000 investment in exchange for a 10 percent stake. They said that they expected to do $20 million in sales within four years.

The sharks were skeptical of the growth forecast from the pair and only two offers were put on the table. However, neither of them was acceptable to Clark and Smith so they turned them down.

They ended up exceeding their own expectations hitting $100 million by 2018 and doubling that two years later. In 2021 the company was bought by a private equity firm for an undisclosed amount. The two founders stepped down as CEO, Clark, and President, Smith, and took up positions on the board of directors in November 2022. The new CEO Valerie Oswalt told Food Dive that the company is now the No. 2 brand by retail sales and revenue was $500 million last year.

DoorBot (Ring)

The fish that truly got away though has to be what was branded as “DoorBot” when it appeared on ‘Shark Tank’ in 2013 but you probably know it as “Ring”. Jamie Siminoff was seeking $700,000 for a 10 percent stake in his company that sold the first truly new doorbell since 1880. His new take connected the doorbell to the user’s smartphone anywhere in the world via a home’s Wi-Fi system.

However, the sharks weren’t biting except for one offer from O’Leary which the product’s maker just couldn’t accept. However, five years later Siminoff rebranded his product and sold it to Amazon for roughly $1.2 billion. Ring has an annual revenue of around $165 million.