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Shark Tank facing up to due diligence

Only 4 of 50 businesses pitched last year on Shark Tank actually proceeded with investments beyond the show.

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Last year I reported that the Due Diligence undertaken after Shark Tank meant that not all of the pitches proceeded beyond the broadcast, a point which has come as a revelation to other sectors of the media this week.

Fairfax is now reporting of the 50 businesses which appeared last year, 27 received deals but only four of them actually went ahead as investments: Cancer Aid, which secured a $250,000 investment, Monday Food Co ($100,000), Be Fit Food ($200,000) and Jimalie ($85,000).

There are unequivocal benefits in having primetime exposure even where an investment does not proceed. Entrepreneurs may gain contacts and / or mentoring and consumer publicity.

Channel TEN claims that across all four series of the show the sharks have invested more than $21 million. But Fairfax claims two sharks, Naomi Simson and Steve Baxter, did not pay out for a single investment for the series despite “investing” in numerous businesses on air.

Last year TV Tonight asked Naomi Simson why an investment remains in the final edit if it fails Due Diligence?

“The television producers are producing television,” she replied.

“We’re producing commercially-successful businesses. They are actually two completely different things. They have an agreement to show the process, we have an agreement with these people to check that it is what it says it is.

“There are so many people who come on the show and think once they get the money it will be easy street. It’s not. That’s when the work really starts because you have investors wanting a return.

“The show is real and it’s really our money. But I’d never put up my finger if I didn’t think (a business) was not going to go ahead.”

But if the entrepreneurs are expected to be up front about their financial situation, shouldn’t the show be as equally candid to its audience?

“How long should or shouldn’t we wait? The average due diligence is probably over 4 months,” Steve Baxter previously explained.

“I know what you’re saying: is it honest? No. But is it real? Yes.

“Shark Tank gives you the impression that it is exciting: ‘Let’s go and do it now! Sign a cheque and let’s get it done!’ But ultimately this is my kids’ money. Their inheritance. So I’m not going to stuff it up.

“I’d love Channel TEN to say ‘Here’s the reason why a deal didn’t go ahead.’

“But my job is to be an investor and TEN’s job is to make TV.”

4 Responses

  1. All this proves is that reality has absolutely nothing to do with reality shows….yep, I suspected as much anyway, thanks for confirming it.

  3. I completely agree with Naomi, they are two very different things. They can’t throw money around based on a 5 minute pitch. But I would like to see why some of the deals did fall through. Not all obviously but it would still be interesting.

    Unfortunately reality TV in Australia is in the glossy bubble where “everything is awesome”. We celebrate the good, gloss over the bad and any criticism is light and breezy.

  4. The U.S. Shark Tank have constant updates ontheir deals….warts and all. They explain why things worked out or didn;t. I agree, most of the people that appear on the show are looking for exposure and guess what it works!

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