Why Tease Tea Walked Away from a $300,000 Deal from Dragon's Den

Sheena Brady, founder and CEO of Tease Tea (left) with Amanda Baker, COO. Photo: Courtesy of CBC (Canadian Broadcasting Corporation).

Tease Tea, based in Ottawa, Canada, appeared on the recent season of the reality television program Dragons’ Den, and the experience was thrilling, according to Founder and CEO Sheena Brady.

Dragons’ Den is much like Shark Tank or similar programs around the world, where entrepreneurs pitch their ideas to a panel of venture capitalists with the hope of securing an investment.

“I personally had been watching Dragons’ Den for the past 10+ years and, in some ways, it felt a bit like the result of intentional execution and planning meeting manifestation to bring this opportunity to life. It was incredibly exciting,” explained Brady, who appeared on the show in late fall 2020.

Tease Tea, an all-natural and sustainably sourced loose-leaf tea business, had applied to appear on the show during the early stages of the company, but they never heard back. “In 2020, we applied again, and we were thrilled when the producers got back to us, requesting we pitch to them virtually,” shared Brady. “This was an important reminder for us – if you receive a ‘no,’ or a ‘no’ response at first, it doesn’t mean no for good. It often means ‘not right now’. So, if you have applied for any type of opportunity in the past, remember to not hold yourself back from reconnecting or reapplying in the future.”

Sheena Brady during her segment of Dragons' Den. Photo: Courtesy of CBC (Canadian Broadcasting Corporation) .

Prescribing Tea to Dragons
When pitching the producers and making their company stand out during the application process, Tease Tea chose to prescribe a tea based on each dragon’s personality type/general persona. “Working with the producers was great, and they were quick to give us feedback, sharing how they loved the pitch, our social impact strategy, and our results as a business,” said Brady, whose company invests a portion of proceeds from every order to programs dedicated to elevating the lives and businesses of women-identifying founders (including their own sister organization, The Founders Fund).

During their Dragons’ Den episode, Tease Tea pitched the Dragons for $300,000 for 10 percent of the company (based on a $3 million company valuation), and had they had quite a bit of on-screen drama and discussion.

“The segment went well overall, though nearly one hour in the Dragons’ Den was cut down to seven minutes, so that can make it difficult to have your business communicated exactly how you want,” said Brady. “Of course, hearing some tough-love feedback alongside the positive praise isn’t always easy to hear either, but it’s valuable.”

Tease Tea product display during Dragons' Den. Photo: Courtesy of Dragons' Den.

Brady said that the challenge about reality television is that you have little control over the narrative, what types of questions you’ll be asked, and how the dragons will respond. “We also knew that the dragons do not do research on the companies or industries ahead of time, intentionally, so you only have the limited time in the den to communicate every detail of company, product and value.”

Brady noted, “Something that surprised us, was some of the criticism behind our social purpose. It was more of a challenge than expected to have the dragons understand why we intentionally invest in women founders and how it’s not only good socially, but also for the business. Although some of  their reactions were a surprise, we recognize that the social purpose – vs. charity – is new to traditional business leaders and takes more explanation than we had time for in the moment.”

Amanda Baker, COO of Tease Tea, on Dragons' Den. Photo: Courtesy of CBC.

In the end, Tease Tea received high praise and positive feedback for their brand, packaging, quality ingredients and the taste of the tea. “Even though the tea pairings did not make the final airing, every dragon loved the thoughtfulness behind each tea we ‘prescribed’ for them, and our new best-selling 3-in-1 sustainable glass tea tumbler, which looked beautiful on air,” concluded Brady.

Ultimately, Tease Tea accepted a deal from Vince Guzzo – one of the dragons – for $300,000 for 50 percent of the business.

“In full transparency, we wanted a way to ensure that conversations continued beyond the filming, and saying ‘yes’ in the moment was the way to do it,” explained Brady. “We did have some concern about what viewers and our community may think about that surprise decision, but ultimately, I always have the long-term health of the company and its impact in mind, even if it meant being viewed in a less than desirable light on national television.”

Brady said she specifically had concerns about the offer/investment because of the optics surrounding a women-owned, led and operated business seemingly partnering with Guzzo on a 50/50 basis – especially when their purpose is to support women through tea. “For us, though, the opportunity to continue conversations after the show outweighed this perceived risk, and it proved to be the right decision in the end.”

Post Show Discussions, Walking Away
After filming their segment, Tease Tea continued conversations with Guzzo about the deal. “The value he brought to us in insights post-filming has been such a unique opportunity that we are deeply grateful for,” says Brady. “Although we continued conversations, we ultimately realized that we did not have a fit with at this particular time, although we look forward to having the opportunity to partner with Vince in the future.”

While Tease Tea accepted the offer on the show, they later walked away from the deal because they were not prepared to give up 50 percent equity. “It was vitally important to us that any equity or partnership deals we consider be in the best interest of our impact, brand and goals,” said Brady. “This was more important than the actual capital, as we have access to capital from our banking partners."

As of now, Brady continues to own 100 percent of Tease Tea.

For any tea company participating in programs similar to Dragons’ Den, Brady offers this advice: “The No. 1 thing that investors – either the dragon kind or regular human variety – are looking for is to understand you, your story and the legacy that you're building with your company. The true value of a business is in its leaders. Remember that in every situation.”

To learn more about Dragons’ Den, visit CBC.ca/DragonsDen. Note that the episode may not be available to view outside of Canada. To learn more about Tease Tea, visit TeaseTea.com.