When my friends from Coffee Joulies appeared on 'Shark Tank' their sales jumped so high that they are still having trouble filling orders months after the show airing. The millions of viewers of Shark Tank provides tons of free publicity. So why would any of the entrepreneurs bother taking the tough deals offered by the Sharks?
Turns out they have to give up their company either way. According to this recent NY Times article, The standard appearance contract entitles the show’s producers and ABC to 5 percent of the company or 2 percent of future royalties, regardless of whether a deal materializes with a shark. That's quite a deal for ABC and Mark Burnett. In addition to a relatively cheap show to produce, (I wonder if they have to pay the sharks to appear) they get a revenue stream from all these companies whose products get a quick burst of publicity.