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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 tak

by 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).
anigbrowl 14y ago
The most interesting candidate in my view are the ones that want less money but access to the sharks' contacts or expertise. Usually those contenders have a product that aligns very closely with something one of the investors already does, eg some guy a few weeks ago who had printed facepaint masks that washed off easily, for people who like to support their sports team by painting their face in the team colors. Very low costs per unit, the sort of thing a parent would buy for a kid on game day at the stadium. Naturally Mark Cuban saw a perfect opportunity as it dovetailed with one of his first promotional strategies as a sports team owner, and they quickly agreed a deal with reasonable-seeming terms.

by lquist 14y ago

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).

anigbrowl 14y ago

The most interesting candidate in my view are the ones that want less money but access to the sharks' contacts or expertise. Usually those contenders have a product that aligns very closely with something one of the investors already does, eg some guy a few weeks ago who had printed facepaint masks that washed off easily, for people who like to support their sports team by painting their face in the team colors. Very low costs per unit, the sort of thing a parent would buy for a kid on game day at the stadium. Naturally Mark Cuban saw a perfect opportunity as it dovetailed with one of his first promotional strategies as a sports team owner, and they quickly agreed a deal with reasonable-seeming terms.