"Shark Tank" has made a lot of entrepreneurs rich, but for every Scrub Daddy, Tipsy Elves, and Squatty Potty, there are countless failures. Just because a company gets a deal on the shows does not guarantee success.
If you have never seen the show, "Shark Tank" gives entrepreneurs a chance to pitch their companies to a panel of sharks, who include Kevin O'Leary, Mark Cuban, Robert Herjavec, Lori Greiner, Daymond John and Barbara Corcoran.
That core panel is sometimes joined by a guest like Alex Rodriguez or Bethenny Frankel.
Related: Innovative retailer files for Chapter 11 bankruptcy protection
The business owner gets to present their company to the Sharks, asking them for an investment. In some cases, negotiations ensue and one of the hosts uses their own money to invest in the business.
In many cases just being on the show helps a company get started, and adding a big-name partner who can open doors and help make deals has led many "Shark Tank" companies to success, sometimes great success.
That's, of course, not always the case. One business that made a deal with Kevin "Mr. Wonderful" O'Leary on the show back in 2020 has filed for bankruptcy.
Image source: Valerie Plesch/Bloomberg via Getty Images
Shark Tank deal turns not-so-wonderful
Having a shark invest helps a company, but it's not a guarantee of success. At the end of the day, the company's founders need to execute and sell enough of their product to stay afloat.
For many companies the money the sharks invest provides only a small cushion. That was the case with M.C. Squares, a company that creates Earth-friendly reusable office products.
O'Leary, who shares a nickname with the pro-wrestling legend Paul Orndorff, bought 11% of the green company in 2020 for $50,000. The company won him over partly because it solves a problem with a good marketing story.
"At M.C. Squares, we create reusable, life-transforming products for the home, office, and everywhere in between," the company website says.
"Our journey began with a simple inspiration — to develop a new category of reusable home and office products. Notably ... we became the inventor of the Reusable Sticky Note! Starting in the classroom, we quickly expanded into corporate offices, and now our innovative organization solutions have found a place in your day-to-day routine."
That's a noble goal, but consumers have generally rejected green solutions that cost more than the products they're replacing.
M.C. Squares files for Chapter 11 bankruptcy protection
M.C. Squares filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of Colorado on Dec. 22. The company intends to reorganize, according to the bankruptcy filing.
At the time of the filing the office-supplies company had $5.7 million in operating losses and owed its various creditors roughly $3.4 million. M.C. Squares had about $900,000 in assets and counts O'Leary as one of its 20 creditors.
"The startup owes $33,657.84 to O’Leary Productions, $850,000 to the Micro Cap Opportunity Fund, and $408,700 to Denver Angels as highlighted in the filing," Inside Startups reported.
O'Leary has not commented on the bankruptcy and did not immediately return a request for comment made through the O'Leary Ventures website.
He did recently share some of his personal philosophy on investing on his X (formerly Twitter) page:
"Every penny I don’t spend on something I actually need gets invested and makes more money for me. I buy the good stuff that I need, and I invest the rest," he posted.
Shark Tank companies filing for bankruptcy are rare, but it does happen and a number of companies showcased on the site have gone out of business.
These include Breathometer, which made a home test to check your blood alcohol level, and Toygaroo, which was pitched as "the Netflix of toys."
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