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The author's perception is that Mark Cuban, in agreeing to do that deal, is bound by contract to invest in someone now alleged to be committing fraud, and is th
by btown 10y ago
The author's perception is that Mark Cuban, in agreeing to do that deal, is bound by contract to invest in someone now alleged to be committing fraud, and is therefore "screwed." However, there are almost certainly clauses that any deal on Shark Tank is subject to diligence after the deal is made. Maybe, and I'm just hypothesizing here, there are even punitive terms that if due diligence falls apart, they need to pay the production company in exchange for the exposure... in which case, it is the entrepreneur here who would be royally screwed!
From the production company's perspective, why bother doing due diligence beforehand if it still makes for good television, and they're protected in a downside case? The true sharks are the ones who build the tank.
- tnecniv 10y agoThey've talked about this on the show. Lots of deals fall through after the episode is shot and they start doing diligence.
- logn 10y agoThey own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward.
- adrianm 10y agoI believe this requirement was retroactively removed for companies appearing on the show.
- koolba 10y ago> They own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward. They got rid of that clause after people called them out on it being horrifically unfair to everyone that pitches on the show.
- maxerickson 10y agoNotably, Mark Cuban says he called them out on it. http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tank-to-remove-equity-clause.html http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tan...