While flipping through your late-night television you have probably seen commercials for a show called “Shark Tank”. No, this is not a show about aquariums, it’s actually a group of business professionals who are choosing to invest their money into small businesses. It may sound too good to be true, but it is very real. These are all executives in the business world who have made a name for themselves and millions of dollars in the process.
The premise of the television show is that there are five or six investors that are all sitting across from someone who is pitching their business. On the show the investors are called “The Sharks”. The one who is pitching their idea is a person or group who believes their business is the next goldmine. These businesses can range from online, to products, to a service and everything in between. The company owners will be grilled by “The Sharks” on whether their business is reputable, profitable, and worth their money. They will be asked about everything regarding the company. This is how “The Sharks” test the company owners to see what they are able to produce and possibly scale up to. “The Sharks” are looking for companies that are already making money and have the ability to be grown and make more. They would like to see a large return on their investment if possible.
The owners of the companies are coming to the show with a business and a dream. The companies are usually at a point that they can show what they have been doing and how they can grow. But, sometimes there are the companies that are brand new to the market. These are the riskier businesses to invest in as they have not yet proven themselves. “The Sharks” tend to be warier of these companies than any other, as they don’t know if their money will be returned or lost. The companies that have established themselves will come to the pitch with a self-valuation and what they are asking for. The self-valuation comes from the owners looking at their assets, liquidity, and everything else and saying that they are worth X amount. This is how they base what they ask “The Sharks” for. The owners generally ask for a monetary amount and an equity value. This means that “The Sharks” will put money up and be compensated with the ownership of part of the company. The equity values tend to be from five to forty percent but never more than that. This makes sure that the original owners still are the majority shareholders of the company at the end of the show.
There are six sharks that have been on the show since the first season. They are Kevin O’Leary, Barbara Corcoran, Daymond John, Robert Herjavec, Lori Greiner, and Mark Cuban. O’Leary has been given the nickname “Mr. Wonderful” and is a Canadian businessman. He co-founded O’Leary funds and SoftKey and made his money there. Barbara is an investor, speaker, consultant, syndicated columnist, and author. She has been involved in the real estate market and television since the mid 1970s. Daymond is the founder, president and CEO of the FUBU clothing brand. He is also the founder of The Shark Group. Herjavec is an immigrant who sold an IBM mainframe emulation board and has been involved heavily in the tech world. Lori Greiner is the queen of QVC and holds dozens of product patents. Mark Cuban is the outspoken owner of the Dallas Mavericks, and co-owner of 2929 Entertainment. Cuban is very eccentric and not afraid to be in the limelight with his antics.
Shark Tank is a television show that gives young entrepreneurs the chance to make it big time. They are able to bring their company in front of investors who can take them to the next level. As long as they can survive the grilling and win over the investors, they will earn what they wanted.