9 ms·

Shark Tank Statistics

105 points by acremades 14y ago

sharkweek 14y ago
I've always felt the real benefit of being on Shark Tank is the amazing publicity that the show offers, no matter whether or not a deal is obtained. I recently interviewed Proof Eyewear (http://www.iwantproof.com http://www.iwantproof.com) on what the experience provided (I'll post it here once it's published next week). During the airing of the show and the following weekend, they could barely keep their site standing (over two million uniques in 24hrs), and the past few weeks since airing have seen huge increases in business. Random note -- the application is sent to a @yahoo email address... I find that kind of funny all things considered -- SharkTankCasting@yahoo.com (http://abc.go.com/shows/shark-tank/casting http://abc.go.com/shows/shark-tank/casting)
- stormbrew 14y ago
  Yep. I've always figured the best thing to do (for Dragon's Den, I've seen a lot less Shark Tank but it seems identical) is to be ready to capitalize on the advertising and then aim for no-deal. Especially since what I've heard about the process of getting the deal actually done (as opposed to TV done, a lot of them fall through post-air) is that it'll sap a lot of time and effort anyway.
  - jhchen 14y ago
    It's worth noting that advertising is not free: 5% equity or 2% royalty goes to Shark Tank just for appearing. See the last page of http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal...
    - stormbrew 14y ago
      I wonder if that's unique to Shark Tank. I never heard of it wrt Dragon's Den. That said, I think if you were really going to go through with that plan you'd probably want to try to find out how often the option has actually been exercised. It may not even be entirely enforceable.
    - ry0ohki 14y ago
      Yep, you have to think of that equity stake as the cost for a 5 minute Friday night commercial. I'm assuming such a commercial would cost maybe $30-50k or more, so it seems like a semi-fair deal (although since you are also the one creating the entertainment which lands the sponsor deals maybe not!)
      - learc83 14y ago
        It's better than a commercial. People actually want to watch, instead of changing channels or going to the bathroom.
  - OGinparadise 14y ago
    Mixed feeling, sometimes a phone call from them can open a lot of doors. But giving them 50-70% for that can be hard to get around.
- wdr1 14y ago
  > I've always felt the real benefit of being on Shark Tank is the amazing publicity that the show offers, no matter whether or not a deal is obtained. That's probably why the producers of the show get a 5% equity, no matter whether or not a deal is obtained.[1] You'll notice that sometimes a presenter is very careful not to mention another company they have, typically one that's moderately successful. It's not because they don't want the sharks to get it piece, it's that they'd end up now giving up a 5% equity stake in that company too. [1] http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal...
- downandout 14y ago
  Yes, the main benefit of being on the show is the publicity (as long they don't skewer you). It seems that at least once per show there is a company that has little real need for funding, and I'm sure they went on there with the specific intent of getting the publicity and little else. One peculiar thing that I noticed in those statistics is that Daymond John was leading in terms of deals. I was sure he would be dead last...I rarely see him do deals.
  - rada 14y ago
    One peculiar thing that I noticed in those statistics is that Daymond John was leading in terms of deals. He isn't. Look at the numbers again, Barbara Corcoran has done the most deals, Kevin O'Leary has invested the most money.
thehodge 14y ago
Share Tank is also interesting because to even go on it, I believe you have to give 3% to the network no matter what the outcome of the show is, investment or no investment..
- sharkweek 14y ago
  Interesting -- found the source for that: http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal... "I further understand and acknowledge that I will be required to enter into further agreements with Finnmax LLC (“Producer”) relating to the business that I may present to the sharks for possible investment (my “Business”). Among other things, those agreements are currently anticipated to provide that as a condition of my participation on the Series, Producer, Sony Pictures Television Inc. and American Broadcasting Companies, Inc. (collectively the “Shark Tank Entities”) or their designee(s) will receive an irrevocable option (the “Option”), to do either of the following or neither, at their election and in their sole discretion: 1. Receive a 2% royalty of the operating profits of my Business or 2. Receive warrants that give the Shark Tank Entities or their designees a 5% equity interest in my Business. "
  - rburhum 14y ago
    Wow. The producers are more sharks than the sharks themselves. This reminds me of those places where people pay to pitch. What a rip-off.
    - crikli 14y ago
      Oh, that's exactly what they're doing. Except rather than a one time fee, it's equity or revenue...forever. Even if you don't get a deal. F*ck. That.
    - niggler 14y ago
      "What a rip-off." The opportunity to showcase your product and have it seen by millions of potential customers and investors on national television may actually be worth far more than their take.
lquist 14y ago
A 10x profit multiple on companies at the average growth stage that Shark Tank companies are at is insanely low. I've always felt that the entrepreneurs who take a deal are completely screwed. The smart ones take the huge publicity jump from appearing on the show, turn down any deal offered, and seek money from the inevitable inbound investor generated post-show airing.
- breakall 14y ago
  > The smart ones take the huge publicity jump from appearing on the show, turn down any deal offered, and seek money from the inevitable inbound investor generated post-show airing. Turn down the deal is exactly what Scott Jordan of SCOTTEVEST did... I'd be curious if he got action on the deal he was trying to make after the show aired. Scott described his experience with Shark Tank extensively on the company's website [1]. The "raw unedited video" of Scott watching the episode he appeared on for the first time is interesting (he gets interrupted with news that the SCOTTEVEST site is not withstanding the traffic surge during the episode's airing!). 1. http://www.scottevest.com/company/shark_tank.shtml http://www.scottevest.com/company/shark_tank.shtml
- t0 14y ago
  Smart, but I hate those people. At least make an effort to pretend like you want some sort of deal for entertainment sake. Don't just walk in, completely ignore the sharks and advertise your product.
  - jamesbritt 14y ago
    True. At least present an offering that, if actually accepted, would be good for you. Who knows; you might ask for the moon and get it.
- timedoctor 14y ago
  I have to disagree with this. I've watched every episode of Shark Tank, and many of the businesses are in highly competitive markets and do not have any fundamental competitive advantage. 10 times profit is actually a really good valuation. Investing at a 10 times profit in a small company is a highly risky investment. You are gambling that the company will be: a) ethical b) continue to operate for enough years to pay you back c) If they stay the same then after tax it will take 15 years to pay back the investor assuming that all the profit goes to paying back the investor which is highly unlikely. Potential growth is the upside that you are looking for but it's certainly not at all guaranteed, and the opposite is also possible (negative 100% growth, or company being worth nothing).
ig1 14y ago
I wrote an article on Dragon's Den valuation and why they're different from typical startup valuations a few years back: http://blog.awesomezombie.com/2010/10/low-valuations-on-dragons-den.html http://blog.awesomezombie.com/2010/10/low-valuations-on-drag... Fundamentally the type of businesses that go on these TV shows tend to be much slower growth than your typical tech startup, hence why they receive much smaller valuations than what we in the tech industry are used to seeing.
deleted 14y ago
[deleted]
tapp 14y ago
This is cool as far as it goes. However what I'd really like to see (though it would obviously be a lot more work) is an analysis that tracks the deals through to consummation. I've read that a very high percentage fall through before funding (HyConn was one of the high profile examples.)
- alanfalcon 14y ago
  Agreed. I really enjoyed the HyConn episode up until I read up on the aftermath. It's for the best that handshake deals based on up to sixty minutes negotiation is not binding, but it would be nice to be able to easily track down the real story on companies after the episodes air.
adventured 14y ago
I've been looking for data on the offer variance on deals that have one entrepreneur versus multiple partners. Can't seem to locate that info. From watching it, it seems like entrepreneurs get more offers when they have partners, particularly there on set with them. Would match up with what is seen in other investing circles.
rpledge 14y ago
Does this analysis include how many deals actually close? There is a due diligence phase after the show is taped and I'm under the impression very few deals actually complete....
uptown 14y ago
I've heard Cuban interviewed a couple times. A tiny fraction of what gets a deal on the show actually close the deal. Once they do the due-diligence with facts and actual numbers, things tend to fall apart. More on that: http://www.nypost.com/p/entertainment/tv/deal_interrupted_cPMIlS95ZcxoPT9UUxVLPP http://www.nypost.com/p/entertainment/tv/deal_interrupted_cP...
- gusgordon 14y ago
  Here he says only 25% have something wrong: http://www.reddit.com/r/IAmA/comments/15doqt/mark_cuban_this_is_my_ama/c7lkbfx http://www.reddit.com/r/IAmA/comments/15doqt/mark_cuban_this...
mikecane 14y ago
The statistics are unlikely to be complete. This is television. We don't know if all deals have been on the air. For a variety of reasons, some deals could have never aired -- such as the subjects not being telegenic enough or the segment not being "compelling TV." I don't know if there's a disclaimer at the end to this effect but this happens with game shows too so it's likely to be in effect with Shark Tank as well. EDIT to add: Yes, I know he's likely measuring just what he -- and all of us -- sees, but still.
benhebert 14y ago
I worked at GiftCardRescue.com when we were on season one of the Shark Tank. Kwame took the deal on tv and then declined when it got down to the paperwork. Smart guy...

105 points by acremades 14y ago

I've always felt the real benefit of being on Shark Tank is the amazing publicity that the show offers, no matter whether or not a deal is obtained. I recently interviewed Proof Eyewear (http://www.iwantproof.com http://www.iwantproof.com) on what the experience provided (I'll post it here once it's published next week). During the airing of the show and the following weekend, they could barely keep their site standing (over two million uniques in 24hrs), and the past few weeks since airing have seen huge increases in business. Random note -- the application is sent to a @yahoo email address... I find that kind of funny all things considered -- SharkTankCasting@yahoo.com (http://abc.go.com/shows/shark-tank/casting http://abc.go.com/shows/shark-tank/casting)

stormbrew 14y ago
Yep. I've always figured the best thing to do (for Dragon's Den, I've seen a lot less Shark Tank but it seems identical) is to be ready to capitalize on the advertising and then aim for no-deal. Especially since what I've heard about the process of getting the deal actually done (as opposed to TV done, a lot of them fall through post-air) is that it'll sap a lot of time and effort anyway.
- jhchen 14y ago
  It's worth noting that advertising is not free: 5% equity or 2% royalty goes to Shark Tank just for appearing. See the last page of http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal...
  - stormbrew 14y ago
    I wonder if that's unique to Shark Tank. I never heard of it wrt Dragon's Den. That said, I think if you were really going to go through with that plan you'd probably want to try to find out how often the option has actually been exercised. It may not even be entirely enforceable.
  - ry0ohki 14y ago
    Yep, you have to think of that equity stake as the cost for a 5 minute Friday night commercial. I'm assuming such a commercial would cost maybe $30-50k or more, so it seems like a semi-fair deal (although since you are also the one creating the entertainment which lands the sponsor deals maybe not!)
    - learc83 14y ago
      It's better than a commercial. People actually want to watch, instead of changing channels or going to the bathroom.
- OGinparadise 14y ago
  Mixed feeling, sometimes a phone call from them can open a lot of doors. But giving them 50-70% for that can be hard to get around.
wdr1 14y ago
> I've always felt the real benefit of being on Shark Tank is the amazing publicity that the show offers, no matter whether or not a deal is obtained. That's probably why the producers of the show get a 5% equity, no matter whether or not a deal is obtained.[1] You'll notice that sometimes a presenter is very careful not to mention another company they have, typically one that's moderately successful. It's not because they don't want the sharks to get it piece, it's that they'd end up now giving up a 5% equity stake in that company too. [1] http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal...
downandout 14y ago
Yes, the main benefit of being on the show is the publicity (as long they don't skewer you). It seems that at least once per show there is a company that has little real need for funding, and I'm sure they went on there with the specific intent of getting the publicity and little else. One peculiar thing that I noticed in those statistics is that Daymond John was leading in terms of deals. I was sure he would be dead last...I rarely see him do deals.
- rada 14y ago
  One peculiar thing that I noticed in those statistics is that Daymond John was leading in terms of deals. He isn't. Look at the numbers again, Barbara Corcoran has done the most deals, Kevin O'Leary has invested the most money.

thehodge 14y ago

Share Tank is also interesting because to even go on it, I believe you have to give 3% to the network no matter what the outcome of the show is, investment or no investment..

sharkweek 14y ago
Interesting -- found the source for that: http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCallApplication.pdf http://a.abc.com/media/primetime/sharktank/SharkTank3OpenCal... "I further understand and acknowledge that I will be required to enter into further agreements with Finnmax LLC (“Producer”) relating to the business that I may present to the sharks for possible investment (my “Business”). Among other things, those agreements are currently anticipated to provide that as a condition of my participation on the Series, Producer, Sony Pictures Television Inc. and American Broadcasting Companies, Inc. (collectively the “Shark Tank Entities”) or their designee(s) will receive an irrevocable option (the “Option”), to do either of the following or neither, at their election and in their sole discretion: 1. Receive a 2% royalty of the operating profits of my Business or 2. Receive warrants that give the Shark Tank Entities or their designees a 5% equity interest in my Business. "
- rburhum 14y ago
  Wow. The producers are more sharks than the sharks themselves. This reminds me of those places where people pay to pitch. What a rip-off.
  - crikli 14y ago
    Oh, that's exactly what they're doing. Except rather than a one time fee, it's equity or revenue...forever. Even if you don't get a deal. F*ck. That.
  - niggler 14y ago
    "What a rip-off." The opportunity to showcase your product and have it seen by millions of potential customers and investors on national television may actually be worth far more than their take.

lquist 14y ago

A 10x profit multiple on companies at the average growth stage that Shark Tank companies are at is insanely low. I've always felt that the entrepreneurs who take a deal are completely screwed. The smart ones take the huge publicity jump from appearing on the show, turn down any deal offered, and seek money from the inevitable inbound investor generated post-show airing.

breakall 14y ago
> The smart ones take the huge publicity jump from appearing on the show, turn down any deal offered, and seek money from the inevitable inbound investor generated post-show airing. Turn down the deal is exactly what Scott Jordan of SCOTTEVEST did... I'd be curious if he got action on the deal he was trying to make after the show aired. Scott described his experience with Shark Tank extensively on the company's website [1]. The "raw unedited video" of Scott watching the episode he appeared on for the first time is interesting (he gets interrupted with news that the SCOTTEVEST site is not withstanding the traffic surge during the episode's airing!). 1. http://www.scottevest.com/company/shark_tank.shtml http://www.scottevest.com/company/shark_tank.shtml
t0 14y ago
Smart, but I hate those people. At least make an effort to pretend like you want some sort of deal for entertainment sake. Don't just walk in, completely ignore the sharks and advertise your product.
- jamesbritt 14y ago
  True. At least present an offering that, if actually accepted, would be good for you. Who knows; you might ask for the moon and get it.
timedoctor 14y ago
I have to disagree with this. I've watched every episode of Shark Tank, and many of the businesses are in highly competitive markets and do not have any fundamental competitive advantage. 10 times profit is actually a really good valuation. Investing at a 10 times profit in a small company is a highly risky investment. You are gambling that the company will be: a) ethical b) continue to operate for enough years to pay you back c) If they stay the same then after tax it will take 15 years to pay back the investor assuming that all the profit goes to paying back the investor which is highly unlikely. Potential growth is the upside that you are looking for but it's certainly not at all guaranteed, and the opposite is also possible (negative 100% growth, or company being worth nothing).

ig1 14y ago

I wrote an article on Dragon's Den valuation and why they're different from typical startup valuations a few years back: http://blog.awesomezombie.com/2010/10/low-valuations-on-dragons-den.html http://blog.awesomezombie.com/2010/10/low-valuations-on-drag... Fundamentally the type of businesses that go on these TV shows tend to be much slower growth than your typical tech startup, hence why they receive much smaller valuations than what we in the tech industry are used to seeing.

deleted 14y ago

[deleted]

tapp 14y ago

This is cool as far as it goes. However what I'd really like to see (though it would obviously be a lot more work) is an analysis that tracks the deals through to consummation. I've read that a very high percentage fall through before funding (HyConn was one of the high profile examples.)

alanfalcon 14y ago
Agreed. I really enjoyed the HyConn episode up until I read up on the aftermath. It's for the best that handshake deals based on up to sixty minutes negotiation is not binding, but it would be nice to be able to easily track down the real story on companies after the episodes air.

adventured 14y ago

I've been looking for data on the offer variance on deals that have one entrepreneur versus multiple partners. Can't seem to locate that info. From watching it, it seems like entrepreneurs get more offers when they have partners, particularly there on set with them. Would match up with what is seen in other investing circles.

rpledge 14y ago

Does this analysis include how many deals actually close? There is a due diligence phase after the show is taped and I'm under the impression very few deals actually complete....

uptown 14y ago

I've heard Cuban interviewed a couple times. A tiny fraction of what gets a deal on the show actually close the deal. Once they do the due-diligence with facts and actual numbers, things tend to fall apart. More on that: http://www.nypost.com/p/entertainment/tv/deal_interrupted_cPMIlS95ZcxoPT9UUxVLPP http://www.nypost.com/p/entertainment/tv/deal_interrupted_cP...

gusgordon 14y ago
Here he says only 25% have something wrong: http://www.reddit.com/r/IAmA/comments/15doqt/mark_cuban_this_is_my_ama/c7lkbfx http://www.reddit.com/r/IAmA/comments/15doqt/mark_cuban_this...

mikecane 14y ago

The statistics are unlikely to be complete. This is television. We don't know if all deals have been on the air. For a variety of reasons, some deals could have never aired -- such as the subjects not being telegenic enough or the segment not being "compelling TV." I don't know if there's a disclaimer at the end to this effect but this happens with game shows too so it's likely to be in effect with Shark Tank as well. EDIT to add: Yes, I know he's likely measuring just what he -- and all of us -- sees, but still.

benhebert 14y ago

I worked at GiftCardRescue.com when we were on season one of the Shark Tank. Kwame took the deal on tv and then declined when it got down to the paperwork. Smart guy...