My father has always told me that ideas are worth a dime a dozen – I have a lot of them. I’m constantly dreaming up products and services, but have not yet put in the time and energy necessary to bringing them to market. On many occasions when talking about such ideas amongst friends though, I’ve been encouraged to go on the ABC reality TV show Shark Tank. I do not watch TV (one of the reasons I believe I have time to be creative) so I have never watched the show, but just the other day I came across an article in the New York Times that had the shows name in its title.
After reading the article, it turned out my friends thought Shark Tank was a better deal than it actually is. You see, contestants on the show are aspiring entrepreneurs who are seeking investment capital for their company(s). Once on the show they get the opportunity to pitch their business to a panel of uber wealthy business men – Dallas Mavericks owner Mark Cuban being the most well know – who will either invest in the company or partner with them if they see potential. If not, they move on to the next sucker.
Sounds ideal right? Potential capital from some of the nations wealthiest people, ABC airtime showcasing your business, and moving on your merry way if it doesn’t work out! What could be better? Well, like most things in life, it’s not what you think. Honestly, do you believe that it would be worth the panels time to judge these contestants just for the opportunity of investing in them? All I can say is that the name Shark Tank is very appropriate, because here is the catch.
Every single contestant you see on Shark Tank has had to sign an agreement with Finnmax – the shows producer – either giving them 5% equity in their company or 2% of their annual operating profits, FOREVER. This isn’t if you win, this is simply for anyone on the show. Of course people argue that the exposure the show gives these businesses is well worth the cost – but be real. If you really think that you have realized your big idea, the one that will deliver you purpose and success, would you really fork over 5% equity or 2% OP just for the chance to pitch it to investors?
It is a good read, [click here for the article]