The most exciting, emotionally-engaging, entertaining show on television is back for its third season. Shark Tank — the show where badass, self-made millionaire/billionaire venture capitalists consider investing in hopeful start-ups — has returned in its 8:00 primetime home on Friday nights.
Last night’s premiere featured this line-up of sharks: Robert Herjavec,Barbara Corcoran, Kevin O’Leary, Daymond John, and Mark Cuban. As as is the show’s trademark, each of the episode’s pitch/negotiations is a wild, unpredictable ride. I won’t spoil any of the surprises of last night’s episode (finding out what the innovative new businesses are is a quarter of the fun of the show) but just note a few of the possibilities regular Shark Tank and Dragon’s Den fans have come to anticipate:
1. Sometimes the entrepreneur pitching his business has a real winner, multiple sharks realize it, and multiple offers appear to compete. Sometimes the advantage goes to the entrepreneur as sharks undercut each other. Occasionally we’ll even see the entrepreneur walking out with a better offer than he sought coming in — the inevitability of the force of competition.
2. In other pitches the proposed business is an obvious disaster and all 5 sharks spend their time confronting the entrepreneur with the rudeness of their offer and the dark road ahead of hem. Sometimes these capitalist inquisitions — usually led by the notorious (and blunt) O’Leary — leave their teeth marks. How would you feel if 5 of the most successful businessmen in the world begged you to give up on an idea that’s actually very stupid before you waste more time and money? The sharks will just go down the line picking apart the flawed business model before them and telling the naive idealist the mistakes they’ve already made and are going to continue to make.
3. On other pitches the pieces just aren’t in place. Remember that profitability is not the only factor in whether one of the sharks invests. Each venture capitalist has different specialities, connections, interests, and abilities. An entrepreneur might walk in with a fantastic idea and as he finishes the pitch you’re sure he’ll walk out with an investment. But the pieces won’t come together — sharks might see the money potential but be unable to attract the entrepeneur. When multiple offers are on the table entrepreneurs really have to weigh the abilities of the sharks. If your company is an internet business is it smarter to go with tech mogul Herjavec or Fubu creator John? Sometimes when this happens the result is only a single offer comes forth. In these scenarios where a shark has no competition it’s not uncommon to see outrageous, greedy demands for high equity. In these scenarios as an audience member you usually hope the entrepreneur is smart enough to walk away from the rotten deal. “Yeah! You don’t need to give up such a big chunk of your company just for his cash and connections!” And sharks DO make mistakes. Regularly you’ll hear sharks reject a company for silly, superficial reasons. (Of course one shark’s mistake is usually just another’s opportunity.)
4. And then you’ll get complete reversals. It’s not uncommon in the shark tank for four of the sharks to bite into the entrepreneur and declare their disgust for the horrible business. To rub a bit of salt in the wound, they might make some clever pun about how they won’t ever see their money again. Then the fifth shark will disagree with all of them, state how she will make the business a success, and agree to the original price asked. (Yes, I say she because it’s often Corcoran playing this role.) These can be especially badass monologues when the shark rebuts the erroneous judgments of his peers. (O’Leary also has an eye for seeing value and the paths to profit where others cannot.)
5. Alternately, sometimes a business could give a great pitch and multiple sharks begin inquiring or even making offers. The entrepreneur might be thrilled to consider the possibilities and lets the enthusiasm go to his head. Perhaps he says something to one of the sharks in the wrong tone of voice or lets slip a troubling fact about the company or himself. Then all of a sudden he loses his momentum and the disappointed sharks reject him.
I bet with this season there will have even more surprising twists and turns and we’ll have additional scenarios to add to the list. But I know these are only a few of the things that happen on Shark Tank and Dragons’ Den pitch sessions. What are some of the ones I’m forgetting?