A Dealmaker's Love-Hate Relationship with Shark Tank

In this solo episode of the DealQuest Podcast, I'm diving deep into my complex feelings about Shark Tank as a professional dealmaker and attorney who has spent over 35 years structuring real-world transactions. While the show has undeniably brought entrepreneurship and deal-making concepts to mainstream audiences, there are significant gaps between what viewers see and how deals actually work in practice.

I'll also contrast Shark Tank with a podcast I absolutely love called The Pitch, which provides a much more realistic portrayal of investment conversations and follow-through. Whether you're an entrepreneur considering seeking investment, a deal professional, or simply someone fascinated by the world of business transactions, this episode offers insights you won't hear anywhere else.

SHARK TANK CREATES AWARENESS BUT MISSES THE MARK

Let me start with what Shark Tank does well. The show has introduced millions of viewers to fundamental investment concepts that were previously foreign to most people. When the sharks ask about customer acquisition costs, revenue growth, and profit margins, they're highlighting metrics that actually matter to real investors.

The show also deserves credit for inspiring entrepreneurship. Seeing successful business leaders like Mark Cuban and Barbara Corcoran evaluate businesses has motivated countless people to pursue their own ventures. And let's be honest, it's entertaining television.

But here's where my dealmaker perspective kicks in. The negotiation tactics, particularly Mark Cuban's famous "shot clock" approach where entrepreneurs must decide immediately, simply don't reflect reality. In actual investment scenarios, founders receive term sheets, shop deals around, and have time to make informed decisions. Pressure tactics like demanding immediate answers are more about television drama than sound business practice.

THE COMPLEXITY THAT NEVER GETS DISCUSSED

What frustrates me most about Shark Tank is everything viewers don't see. When a shark says they want "20% of the company," that sounds straightforward. But in reality, investment structures involve layers of complexity that never get addressed on the show.

Are we talking about common stock or preferred shares? What about liquidation preferences, anti-dilution rights, or board seats? Will there be restrictions on founder compensation? These structural elements often determine whether a deal actually closes and how it performs over time.

Studies suggest that 30-40% of deals announced on Shark Tank never actually close. That's a significant failure rate that stems largely from due diligence issues and structural negotiations that happen after the cameras stop rolling. Yet viewers rarely learn about these follow-up realities.

VALUATION OVERSIMPLIFICATION

The sharks typically focus on cash flow multiples when discussing valuations, but real-world valuations involve much more sophisticated methodologies. Different industries use different approaches, from discounted cash flows to asset-based valuations to revenue multiples specific to particular sectors.

For early-stage companies that aren't yet profitable, entirely different valuation frameworks apply. The show's oversimplified approach gives entrepreneurs an incomplete understanding of how their businesses might actually be valued by sophisticated investors.

WHY THE PITCH PODCAST GETS IT RIGHT

This brings me to The Pitch, a podcast that provides everything I wish Shark Tank offered. Created by Josh Muccio and Lisa Muccio, The Pitch features real investors evaluating real companies in unedited conversations that typically run 30-40 minutes per pitch.

What sets The Pitch apart is their commitment to follow-up. Every episode includes updates on what happened after the initial pitch. Did the investors actually write checks? What issues came up during due diligence? Which deals fell through and why?

They've even recorded actual due diligence calls, giving listeners insight into the detailed investigation process that determines whether commitments turn into closed deals. This transparency provides invaluable education about how investment processes really work.

REAL INVESTORS, REAL OUTCOMES

The investors on The Pitch aren't television personalities; they're working venture capitalists and angel investors who deploy real capital. The companies they evaluate span a broader range of industries, with a particular focus on technology companies that represent the majority of fundable startups.

The show discusses sophisticated deal terms like liquidation preferences, board composition, and anti-dilution provisions. These conversations help entrepreneurs understand what they're actually agreeing to when they accept investment.

THE FOLLOW-UP THAT MATTERS

Perhaps most importantly, The Pitch tracks companies over time, sharing both successes and failures. They'll report when companies go out of business, struggle with execution, or pivot their business models. This balanced perspective reflects the reality that most startup investments don't generate significant returns.

This honest portrayal contrasts sharply with Shark Tank's tendency to highlight only the biggest success stories while ignoring the companies that struggle or fail entirely.

ENTERTAINMENT VERSUS EDUCATION

I understand that Shark Tank is primarily entertainment, and it succeeds brilliantly in that regard. The show's editing creates compelling television from what are actually much longer pitch sessions. But after years of success, there was an opportunity to evolve the format to provide more sophisticated education about deal-making.

The Pitch proves that investment content can be both educational and entertaining. Their immersive approach makes listeners feel like they're sitting in actual investor meetings, while Shark Tank feels distinctly like watching a television show.

SETTING REALISTIC EXPECTATIONS

One concern I have about Shark Tank is that it may give entrepreneurs unrealistic expectations about both the investment process and success rates. The show's focus on dramatic moments and successful outcomes doesn't reflect the methodical, often lengthy process of raising capital or the high failure rate of most startups.

Professional studies indicate that in a typical investment portfolio, seven out of ten investments produce minimal returns, two might perform moderately well, and one becomes a significant winner. This reality rarely surfaces in Shark Tank's narrative.

THE POWER OF AUTHENTIC DEAL EDUCATION

As someone who structures real deals daily, I appreciate any platform that demystifies the investment process. But I believe entrepreneurs deserve accurate information about what they're getting into when they seek capital.

The Pitch provides that authentic education while remaining engaging and accessible. Their approach shows that audiences are ready for more sophisticated content about business and investing than television executives might assume.

Tune in to this episode to hear me break down exactly what Shark Tank gets right and wrong about deal-making, and why The Pitch offers a more valuable learning experience for anyone serious about understanding how investment deals really work.

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Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!