When a business appears on “Shark Tank,” even if the company doesn’t make a deal, it gets a wave of attention that usually leads to increased sales.
“When you air on Shark Tank night, I don’t care what you’re selling, you’re going to sell stuff. It’s a question of how much you’re going to sell. I’ve invested in businesses that have sold $3 million in one night, when their entire lifetime sales were $40,000,” Shark Barbara Corcoran shared with Fidelity.
Some companies see an even bigger bump.
“The two months following ‘Shark Tank,’ we had a huge lift in our business and established a new floor of revenue,” Randy Goldberg, co-founder of the New York City-based e-commerce sock business Bombas, which struck a deal with Daymond John during season 6, told Inc.
Teaspressa, which appeared on Shark Tank but did not make a deal, experienced a bounce from the show, but has struggled and filed Chapter 11 bankruptcy.
Teaspressa offers a different kind of tea
While the company failed to make a deal on Shark Tank, Teaspressa did get to showcase its unique take on tea on national television.
“Unlike traditional tea, our signature blends are brewed like espresso and feature a patented, lab-tested formula crafted to achieve the ‘golden ratio’ of L-Theanine, an amino acid renowned for promoting calm, focused mental clarity,” the company explained on its website.
The company’s owner, Allison Devane, pitches her tea as “the coffee alternative you never knew you needed.”
“Providing sustained energy and focus without the crash. This makes our teas a superior, functional choice that delivers all the cognitive benefits of coffee, minus the unwelcome jitters,” she added.
Being on “Shark Tank,” even without making a deal, turned out to be a revenue driver for Teaspressa.
More Bankruptcy:
- Outdoors retailer closing 91 stores in Chapter 11 bankruptcy
- 97-year-old aerospace manufacturer files Chapter 11 bankruptcy
- 60-year-old dining chain franchisee files Chapter 11 bankruptcy
“DeVane’s brief appearance on the show turned out to be a golden goose nestled in for the long haul. Even years after the episode had initially aired, it wasn’t uncommon for the brand to receive a tidal wave of orders. This spike in sales would often coincide with passionate messages from customers who had seen the rerun of the episode that featured her pitch,” Tasting Table reported.
DeVane talked on her website about the impact of appearing on the show.
“The exposure alone led to sales, continuous media attention, and an overall increase of traction. In the words of Lori Grenier, Teaspressa went from ‘crawling’ to a ‘light walk’ practically overnight. Sales have more than tripled, which provided the funds to open my own brick and mortar storefront, and I was named a Tory Burch fellow,” she wrote.
Now, despite the recurring sales bump, Teaspressa has filed Chapter 11 bankruptcy in an effort to restructure approximately $3 million in debt.
Shutterstock
Teaspressa files Chapter 11 bankruptcy
Teaspressa is restructuring its debts under Subchapter V, which will allow DeVane to retain control of the company.
“The beverage manufacturer, which is located at 2519 N. 16th Street in Phoenix, filed its voluntary petition for Chapter 11 bankruptcy on Sept. 11 in the United States Bankruptcy Court for the District of Arizona. The company was founded and registered as My Little Tea Kettle LLC, doing business as Teaspressa LLC,” Phoenix Business Journals reported.
Teaspressa’s bankruptcy filing, which can be found on PacerMonitor, showed that the company faces significant debt.
- The company estimates it has 50 to 99 creditors, noting that after administrative expenses are paid, no funds will be available to unsecured creditors.
- Assets range between $50,001 and $100,000 with liabilities ranging $1,000,001 to $10 million, but less than $3,424,000 — the cap to be considered a small business debtor.
- This does not include debts to the owner or other affiliates of the tea company.
At its peak, Teaspressa had five storefronts, but four of them closed during the Covid pandemic. The company has one remaining location in Phoenix.
Devane remains confident in her product.
“We are the first and only beverage that is a hybrid of tea and coffee,” DeVane told Biz Journals. “Teaspressa’s patented innovation and ability to elevate traditional coffee experiences make us stand out.”
Now, the company faces a fight for survival as it seeks to restructure its finances.
