Business

Do Good Companies Really Pitch on Shark Tank?

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The startup business bidding show Shark Tank is an entrepreneur’s dream, who wouldn’t want established business moguls like Mark Cuban and Kevin O’Leary on their team to see them through the doggie dog world of business. The show is very educational and exciting to watch rather you are a nine to fiver or a business owner, but one must wonder how real is the show? The question was posed on QuoraDo really good companies / teams pitch on Shark Tank? Why would they?

Inc. contributor David S. Rose addressed this question and his answer was “YES!” but…

There are three kinds of companies that come on Shark Tank to pitch their story.

The first is the hopeful, new, “lifestyle” business.
These are the inventions that a mother or father was inspired to make because of their children, or a small consumer product that someone developed in his or her spare time and is now trying to commercialize. While some of these may ultimately be successful (like the elephant eyedropper, or smiley-faced sponge) these wouldn’t be considered “really good companies,” and would likely never even be invited in to pitch by professional investors (either angels or VCs).

The second is the solid, bootstrapped small business.
These are often good, legitimate businesses that have developed real revenue streams, with solid managers. In most cases, these are the ones that get funded by the sharks, who provide strong contacts and product experience to help take the company to the next level. While these tend not to be the high-growth ‘unicorns’ that professional investors look for, for the most part they are, indeed, “good” businesses.

The third category are the “really good teams/companies.”
This is by far the smallest group out of the overall pool, but is what I think the questioner is asking about. These are businesses that might well appeal to professional investors, and, indeed, often arrive at the Shark Tank studio having received hundreds of thousands, or even millions, from angels or VCs. I’ve seen a couple of companies from the portfolios of venture funds in which I’ve invested. In all cases, the motivation is not the [usually very small] investment from the sharks, but the virtually priceless coverage and marketing benefit that results from ten minutes of primetime TV. This can be very well worth it, even if there is no investment.

About Will Jay

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