Aaron Krause, chief executive of the sponge company Scrub Daddy, has not wiped away one second of his 90-minute "Shark Tank" pitch from his memory. In 2012, he stood under the television show's stage lights, sweating as he prepared to fire off his business plan after months and months of phone calls and auditions.
He spoke to the reality TV program's investors, or sharks, about his business, seeking $100,000 in exchange for 10 percent of his company. He dipped a sponge into water. He scrubbed down hard-to-clean surfaces. He cleaned pots, pans and sauce off a counter.
Krause's rapid-fire presentation sparked a bidding war between investor Kevin "Mr. Wonderful" O'Leary, Fubu founder Daymond John and "Queen of QVC" Lori Greiner. It was Greiner who won Krause's signature. They hugged and smiled. Krause gleefully walked offstage telling the cameras it was a "dream come true."
Soon after, aspects of the agreement changed, Krause said, without disclosing specifics. But he was clear that the deal he made on TV wasn't what he ended up with. Scrub Daddy is now a "Shark Tank" success story, earning $670 million in retail sales over the last 10 years, Krause said in an interview on the show.
Winning on "Shark Tank," which was renewed for its 15th season in May, can appear like an example of the American Dream - walk on with a business pitch, leave with hundreds of thousands of dollars and a business partner worth millions. (Or in shark Mark Cuban's case - billions).
But some of the show's winners don't always end up with the rewards that they expect and agreements with the sharks fall through after the cameras turn off.
"The exposure is just like a launching pad," Krause said. "It could get you tossed right off the boat or it could launch you to the moon. It's kind of how you deal with it."
Relationships with sharks can sour, as recently seen between Al "Bubba" Baker - a former contestant and founder of Bubba Q's Boneless Baby Back Ribs in Ohio - who alleges he had a "nightmare" business relationship with John, the Fubu founder. Baker's family has criticized John over social media, leading to the "Shark Tank" investor issuing a restraining order and filing a lawsuit against them.
On each episode, business owners propose a deal of what they're seeking from the sharks and the sharks bite back with an offer of their own. Some investors want more stakes and shares, others want to offer loans or credit instead of cash. O'Leary notoriously requests royalties in his deals. Sharks will most often have a final offer and the business owner(s) will have to decide whether to accept the offer. If they do, then it's all smiles.
And that's where the real fun begins, Cuban told The Washington Post. (ABC declined to comment. Sony and MGM, which also handle production on the show, did not immediately respond to requests for comment.)
Once the two sides agree on an offer, two things happen in the studio, Cuban said. Presenters will first meet with a studio psychologist, who talks to them about their experience on the show. The details of those sessions are withheld from the investors, Cuban said.
Each shark then has a "business person" talk to the winners about next steps, which includes a due diligence report that will look at the company's books and "make sure all they said in their pitch is actually true," Cuban said. After the final agreement is inked, investors will begin having phone calls and meetings, as with any other investment partnership, Cuban said.
Agreements can fall through once the stage lights dim. Some contestants will back away because they wanted to use the show as a commercial opportunity, Cuban said, adding that those business pitches likely won't air on television.
Sharks may step away from partnerships, too. A Forbes survey of 112 former contestants on the show revealed that half of the deals offered in seasons 8 through 13 fell through. Sharks often break away after finding something wrong during the due diligence phase, Cuban said. About one third of companies "embellish or leave out material information" during their pitches, he added.
Cuban doesn't try to change his deals unless something in the due diligence reports comes up - like the amount of debt might be uncovered after the fact, which changes the value and economics of a business, he said.
"Each shark does things their own way," Cuban said.
Not all relationships between sharks and business owners go swimmingly. O'Leary reportedly backed out of his agreement with Vladislav Smolyanskyy of Pinblock, a Lego competitor, which sent the company into a downward spiral because it had been preparing to meet demand with O'Leary's investment in mind, Forbes reported.
And then there's Baker's situation with John. The barbecue restaurant owner's daughter, Brittani, has been sharing details of the business partnership on social media, claiming that John and his team made misleading statements to take over the business, according to the Los Angeles Times.
Zach Rosenfield, a spokesperson for John, said Baker's actions have tried "to undermine a business partnership and the legal parameters they agreed to four years ago."
"Their belief that they can unwind poor business decisions through slanderous social media posts and articles will no longer be tolerated," he added.
Rosenfield said it is "important to understand why a deal might change after what you see on the show" and pointed to an Instagram post from John, who compared making an offer on "Shark Tank" to shopping for a house. You see a house, you check it out, put a bid on it. But then, you do some appraisals and reports to find out the true value.
Leaving a shark investor unconvinced can lead to success, too. The creators of Ring, the security system and camera company, pitched their business idea on "Shark Tank" under the name DoorBot in 2013. The sharks turned the company down. The exposure brought success years later, leading to Ring founder James Siminoff appearing on the show as a shark five years later. Siminoff declined to comment for this article.
Rob Merlino, writer of the frequently-updated Shark Tank Blog, has seen his fair share of "Shark Tank" episodes. He's chatted with winners, losers and shark investors about their successes and failures before and after they appeared on television.
Sometimes, the sharks make out like bandits. Other times, winners blow the money away, or they walk away with millions.
"It's just like life. It's all over the place," he said. "Some deals go great. Some blow up."
WASHINGTON POST