Drink Brand Made Famous by ‘Shark Tank’ Files for Chapter 11 Bankruptcy: Nearly $3M in Debt

For a small business, landing a spot on a hit TV show can feel like hitting the jackpot — but one company’s story shows that even a burst of national fame can’t always guarantee a happy ending.

Teaspressa, a Phoenix-based tea company that appeared on Shark Tank, has filed for Chapter 11 bankruptcy, according to a report from TheStreet published on Monday, October 5.

Founder Allison DeVane pitched her espresso-style tea to the Sharks in a season 7 episode that aired in February 2016. She walked away without a deal, but the national exposure still paid off.

“The exposure alone led to sales, continuous media attention, and an overall increase of traction,” DeVane wrote on the company’s website. “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!”

That kind of boost is common for businesses featured on the show. “When you air on Shark Tank night, I don’t care what you’re selling, you’re going to sell stuff,” Barbara Corcoran, 77, said at a 2020 webinar, per Fidelity.

In Teaspressa’s case, the orders kept coming for years, according to Tasting Table, which reported that the brand often saw a wave of sales whenever viewers caught a rerun of DeVane’s episode.

The drink is brewed like espresso and uses a patented, lab-tested formula containing L-Theanine, an amino acid associated with promoting calm and focus, according to the company’s website, which calls it “the coffee alternative you never knew you needed.”

But business has been tough. At its peak, Teaspressa had five storefronts, but four of them closed during the COVID-19 pandemic, leaving just one location in Phoenix, per TheStreet.

The company filed its voluntary petition on September 11 in the U.S. Bankruptcy Court for the District of Arizona, according to the Phoenix Business Journal. Teaspressa is seeking to restructure approximately $3 million in debt under Subchapter V, a process that allows DeVane to retain control of the company.

Per TheStreet, the filing estimates that the business has 50 to 99 creditors, assets between $50,001 and $100,000 and liabilities between $1,000,001 and $10 million. The filing also indicates that no funds are expected to be available to unsecured creditors after administrative expenses are paid.

Teaspressa isn’t the only one facing concerns about mounting debt. As First for Money previously reported, Elon Musk recently warned that the U.S. could “go bankrupt” unless artificial intelligence and robotics dramatically boost productivity, on the Dwarkesh Podcast. The Tesla CEO and world’s first trillionaire, 55, made the stark prediction after the national debt surpassed $40 trillion for the first time in August, per Reuters.