I think that Shark Tank is completely misleading the average person’s expectations of private investing. While entertaining, the show is doing more harm than good.
11 answers from the community
I agree. I'm shocked at how the investors on that show routinely demand 50% of a company for a meager sum like $100,000. In normal tech investing, $1 million gets you about 20% of a company.
Absolutely! The theatrics do get ridiculous on that show. Like 1st commenter (6:46am), I'm also shocked at the ridiculous amounts demanded by investors AND how naive some applicants seem, offering huge blocks of their company for piss-little amounts of money.
Bottom line though, a shrewd entrepreneur goes for the free marketing, not the money.
It's not free. Companies that come onto shark tank have to give up 5-6 percent of their company just for appearing.
not anymore.
This is true. Mark Cuban fought against that clause in the contract and won.
Not much of a confession. That show is trash.
The real shocker is that Mark Burnett and Sony (?) were apparently requiring 15% just to get onto the screen, before any deal. Reports said that Mark Cuban put his foot down and threatened to leave the show if they didn't change that. I have no idea of the veracity of all of that, but it's certainly plausible.
Wow they are totally measleading, I'm from an Eauropean country and the local show here (based on Shark Tank) made me think that getting a decent investment in my country is impossible. But this discussion made me realize that is not the case.
these shows do mislead people, especially those who do not understand how funding works. very detrimental
2-time founder here. i love the show, and so do many of my peers out here in SV. the comments the sharks make regarding problems they see in the presenting companies are all real. their advice is as good as it gets. now the presenting companies are not a fair slice of typical startups, but that is to be expected for a tv show.
Its fodder for ignorant masses. As someone who has built a number of companies in both CPG and tech, raised money, lost money, succeeded and failed. Its maddening to watch the Sharks spew about things they haven't a clue about... mostly regarding how the Big Box retailers work and how hard it is to manufacture a product in a timely fashion.
The Sharks seem oblivious to the hardships of getting capital in order to meet the potential... They actually think that the big box retailers will give you a PO before you have the product to deliver! Nothing is further from reality as they will only give you a PO with a 60-90day shipping window and all sorts of guarantees. Good luck making let alone shipping the product in that time frame...