Any entrepreneur knows building a brand can be brutal. On ABC's hit show "Shark Tank," entrepreneurs put their companies and innovations to the test in front of investors, or "sharks," to see just what they're made of.
Shane Talbott and Steven Nakisher were avid fans of the show when they decided to try their luck at landing a chance to pitch to the sharks. Their Chicago-based company, Talbott Teas, had been featured on the Oprah Winfrey show, QVC, and the tea was being sold online and in department stores across the country.
But, the duo needed cash to fund their inventory.
"We had been open since 2003, but found ourselves looking for financing," Talbott, 40, said. "We were hitting a brick wall with every bank and financier, and needed money to fund our inventory—we couldn’t do it out of pocket anymore."
After nine months of trying, Talbott and Nakisher, 43, found themselves taping the show in June 2011. All those nights spent watching the show certainly paid off, Talbott said, as they knew what to expect once they landed in front of the camera in front of investors Barbara Corcoran, Daymond John and Kevin O'Leary.
"We would watch and critique the entrepreneurs," he said. "People never get the 'concept' phase, and we were already on shelves in stores and even bigger online. But it's different once you get in front of those sharks and they start firing questions at you."
Thankfully, Talbott and Nakisher didn't get eaten alive. While all three sharks showed interest, O'Leary offered them a deal with a 35% stake in equity that they accepted. After the show, John approached Talbott to make an introduction for them with Jamba Juice, the smoothie chain.
In September 2011, Talbott Teas struck a full acquisition deal with Jamba Juice thanks to John's introduction. The investor had a conflict of interest at the time of the pitch, which he cleared up before swooping in to make the deal for Talbott.
"They were the perfect storm on the show," John said of Talbott Teas. "They had the 'Oprah effect,' were a couple of years into the brand and had about $300,000 of their own money invested—they had skin in the game. Tea is flourishing, and they were in the sweet spot to scale it."
Talbott said he and Nakisher couldn't be more thrilled. Jamba Juice has 750 stores across the country, and 440 of them currently feature teas. The two companies are in the process of rolling out a plan for Talbott Teas to be offered in Jamba's stores.
One lesson for any would-be entrepreneurs looking to get in front of ABC's sharks: make sure you have sales, John said.
"If you don't have sales, you have to have some type of proprietary product, or a reason that will help me understand why you don't have sales," he said. "When we invest, we don't want to have to do the work for you. By the time you call me [asking for help] I know it’s a problem. And, we also need to know there is room for growth."
Also, John said not every small business needs backing from major investors.
"People come on the show that have very small businesses, and don't necessarily need partners," he said. "In that case, don't go for other people's money, just run a nice small business on your own."
While pitching to investors was intimidating, Talbott said the biggest lesson he and Nakisher learned was to stay true to their idea and brand. Their loyalty to their company paid off.
"If you truly believe in what you created, others will see that," he said. "We knew we had nothing to lose."