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Thinking of Pitching Your New Business on Shark Tank? 5 Things to Consider Before You Take the Leap.



October 20, 2020 7 min read

Opinions expressed by Entrepreneur contributors are their own.

Spanning 11 years, 200 episodes, 890 pitches, 490 deals, and $143.8 million worth of invested capital, Shark Tank is a staple TV program for seasoned and budding entrepreneurs. With a host of celebrity investors, the show has popularized pitching and paved the way to success for growing companies like Scrub Daddy, Ten Thirty One Productions, and Wicked Good Cupcakes.

For many founders, the chance to have a global platform and pitch investors like Mark Cuban and Lori Greiner offers a once in a lifetime opportunity. But while the limelight may be tempting, securing a spot on the show is still a long way from guaranteeing success. As with any other form of pitching (to angels, family, and friends, or VC firms), founders need to tell their story in the most compelling way and be prepared to negotiate a fair deal. Being on a popular TV show should not mean compromising on the amount of money you’re asking for, or the equity you’re willing to split.

But importantly, Shark Tank is not to be treated like a regular conference room—it’s pitching with an inherent bonus. Regardless of the money you may walk away with, you’re almost guaranteeing your company once-in-a-lifetime exposure to an international audience.

For startups thinking of pitching on Shark Tank, here are five things you need to consider before taking the leap:

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Determine if your industry is a good match.

Shark Tank isn’t a one-size-fits-all-founders show. There are certain industries that are better suited to the structure, notably businesses with consumer products or in the hospitality sector. Food (20 percent) and fashion (19 percent) are the most popular industries being pitched on the show; however, lifestyle, home, and media are the industries most likely to receive a deal.

For instance, tech isn’t always compatible with Shark Tank because the show can cost companies dearly. Gabe Zichermann, chief executive at Failosophy, says that sharks typically request large amounts of equity, so tech founders have to sacrifice a lot to secure investment. On average, entrepreneurs offer 13 percent equity but end up closing a deal in which they lose 27 percent—more than double what they initially planned. Angel investors or VC firms tend to be more beneficial for tech startups as they ask for less equity and take a more hands-off approach, without lowering the funds. Unsurprisingly, only 7 percent of the founders on Shark Tank are from tech or software ventures.

This is not to say that you shouldn’t apply for the show if you’re not from the industries the sharks typically invest in, but rather that you should think carefully about what other value – beyond financial – you can get from being on the program.

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Market your brand, regardless of the outcome.

Shark Tank has more than four million viewers—that’s four million potential new customers you can be talking to. Perhaps the most important thing to keep in mind when you step onto the Shark Tank stage is that you’re really stepping onto an international platform to market your product, for free. Even if you don’t receive any offers or don’t accept the deal, you have about 10 minutes to introduce your product or service to the masses.

Connecting with people watching at home is key. “Naturally, you want to impress the sharks, but you have to remember that the viewers are the real consumers,” Zichermann says. “Unlike other pitch competitors such as TechCrunch Disrupt, that only targets professional investors, Shark Tank lets you speak directly with the people who will be using your product.” 

Pay close attention to all the user research you have conducted throughout your startup journey. When you’re pitching, imagine yourself having a coffee with your ideal buyer persona and think about the problem you’re solving for them, what language resonates most with them, and why they would be willing to spend their money with your company. If you keep your target users in your mind’s eye while you walk through your product, you’ll transmit value to the people who matter the most. Of course, prepare yourself for the questions and reactions from the sharks, but don’t make their engagement your only focus.

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Articulate early traction in your startup.

Similar to any fundraising round, you have to have a solid pitch on Shark Tank, and that involves demonstrating any early traction you’ve had in your company. Time and time again, you see the sharks immediately perk up if a founder begins pitching a business with proven traction. Whether it’s subscriptions, online engagement, letters of intent or conversions, metrics that show you are already experiencing positive reactions from customers will speak volumes. Ultimately, the sharks are looking for a reason to say ‘no’ to your pitch, but demonstrable traction is a powerful way to persuade them otherwise.

In this particular case, how you present your traction will make a difference. If you’re a shy, introverted founder, the sharks may fail to be impressed by your pitch, even if the stats are there. TV requires a particular type of energy—viewers and the sharks want to be entertained, as well as feel the competitive passion radiating from entrepreneurs. Simple facts aren’t always enough. You have to be memorable.

If you know you don’t embody that ferocity, put forward a stronger personality from your team. Switching the front person isn’t a critique on your ability to lead the company, it’s a bold acknowledgment of the different skill sets that stand out in your team.

RELATED: Sign Up For a Risk-Free Trial of Our On-demand Start Your Own Business Course

Know the sharks’ stories.

Doing your research around the sharks is the most effective way to bridge the stranger gap and boost the likelihood of striking a deal. The benefit of Shark Tank is that there are literally hundreds of episodes to browse through and take notes on which sharks invest in which companies, what they respond best to, and what feedback or advice they give along the way. With this information, you can tailor your pitch toward specific sharks and establish a warmer introduction that is encouraging to any investor.

For example, the founders from Cousins Maine Lobster gave a legendary pitch by watching all seasons of Shark Tank prior to going on the show. They then wrote down every possible question they thought they could be asked, and took turns quizzing one another to ensure that they knew every answer flawlessly. The result was a $55,000 investment from Barbara Corcoran.

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Put your product in full view.

None of the sharks will put money into a project they can’t see in action, so have a clear way to demo your product or service. If you have a software product, you could give the sharks a tablet to explore the features while you talk. If it’s a service, make sure that you have all the cables you require to connect to a screen in studio, to show the sharks a professional (and concise) video in which various people use and provide candid feedback on your business.

However you choose to showcase your product, it has to be TV-ready: so, utterly seamless. Triple check that everything is working well in advance of your pitch, and emphasize the elements that you think will be most appreciated by individual sharks.

Shark Tank is undeniably an exciting prospect for entrepreneurs, and it can propel early-stage projects to new heights. That said, founders should be careful not to get caught up in the theatrics and risk making the wrong decision for their company. If you can get a better deal elsewhere, negotiate, and don’t be afraid to walk away. A place on Shark Tank means unique exposure, so leaving without an investment doesn’t mean leaving empty handed.


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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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