Although it’s just a few minutes on TV, a segment on ABC’s “Shark Tank” can be a make-or-break moment for the small business owners competing to land investment.
The experience can be nerve-wracking, exciting and life-changing all at once says Sara Margulis, CEO and co-founder of Honeyfund, a platform for crowdfunding honeymoons, which landed a deal with Kevin O’Leary during season 6 of the show.
“When you’re waiting to go into the ‘Shark Tank,’ you’re in a trailer on a big studio lot in Los Angeles and it’s very surreal,” she tells CNBC Make It. “You’ve got your hair and make up done and you’re waiting for them to come and tell you that it’s time.”
When contestants are taken to the green room, an area where talent waits when not filming, Margulis says producers give you a simple instruction: “Walk straight down the hall, stand on your mark and whatever you do, don’t look at the camera.” But the realization you’re about to be seen by millions of viewers and five renown investors can make even that difficult.
“I looked straight at the camera,” she laughs.
Here are a few things you might not know about what it’s really like in “the tank.”
“I feel like the sharks are almost more cutthroat with each other than they are with the entrepreneur,” Margulis jokes.
After she and her husband and co-founder, Josh, gave their two-minute rehearsed pitch to introduce Honeyfund, “the questions started flying from all corners of the room,” Margulis says. “Sometimes the sharks are talking over each other, sometimes they’re disagreeing with each other, sometimes they’re fighting over how much to offer or counter offering and cutting the other shark out.”
Even the investors admit, it can get little loud.
“We know that they’re going to edit [the show] down, so when we get mad, we’ll start cursing at each other, yelling at each other, and the entrepreneurs will be like, ‘What the hell is going on?'” billionaire investor Mark Cuban tells AOL.
“A lot of viewers wouldn’t know that sometimes you’re in the tank for two hours,” she says. “What you see on television is just a few minutes.” And those two hours aren’t easy.
The pitch process was, “really very challenging,” Margulis explains. “Not only are you pitching your business for the first time in front of real investors, you’re doing it in front of a national audience, with cameras all over you and lights.”
Contestants even have to see a psychologist after the pitch, Cuban tells AOL. “They have to make sure we haven’t scared them for life,” he adds.
Today, “Shark Tank” gets a lot of applicants.
“40,000 people apply, the producers see … 1,000 people, we see 200 and then about 120 [pitches] air,” investor Daymond John explains to AOL, meaning many contestants who stand in front of the sharks on set might not air as segments of the show.
But in Honeyfund’s case — the show reached out to them.
“I got an e-mail in my inbox from ‘Shark Tank,'” Margulis says. Honeyfund had been in business for eight years and was already profitable when Margulis appeared on the show in 2014.
“They were looking for more established companies, brands that people knew, to come on to season six and and look for bigger amounts of investment,” she explains. “Shark Tank” won its first Emmy in 2014 for “outstanding structured reality program.”
“He’s no BS,” Margulis says of O’Leary, who made a deal to give Honeyfund a loan with three-times payback via revenue, since Margulis and her husband did not want to give up equity.
Years later, they’re still working together. “Everything you see on TV about Kevin is absolutely his real personality.”
One thing people might not know about Mr. Wonderful? His most successful businesses are run by women.
“Of all the sharks, he’s someone who really has noticed that in his portfolio all of his returns are coming from women led or women owned companies,” Margulis explains. “He has a huge amount of respect for when a woman walks into ‘Shark Tank.'”
That’s because just like on TV, O’Leary’s top concerns are the numbers and the bottom line.
“Like he says, he doesn’t care if it’s a goat making him money,” Margulis laughs. “The returns are the returns and they speak for themselves.”
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Disclaimer: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
