Slide 1:
Figure 1: Shark Tank Sharks. ABC Entertainment
(2024). https://abc.com/show/535e2b07-18a9-4d94-9803-9ed8257b9d23/about-the-show
Slide 2:
Figure 2: Shark Tank infographic. Michael
Stewart (2016). Getty Images.
https://web-p-ebscohost-com.library.capella.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=75f29d27-a470-4d5d-9d4c-0b5a0b7888d7%40redis
About
Shark Tank is an unscripted reality television show on
ABC “that celebrates entrepreneurship in America” (ABC, 2024, para. 1). First
airing in 2009, the program is produced by MGM Television and is based upon a
similar Japanese series called Dragons’ Den (ABC, 2024). In its 15-year
history, the Shark Tank program has won various awards, including several Emmys
and the BANFF World Media Festival award in 2016 (ABC, 2016). There are other
reality-based programs on television and streaming. However, it is the only
show that offers entrepreneurs a chance to obtain funding for their business
ideas from very successful investors.
Shark Tank investors seek out the best companies and
products to back. These investors, also known as Sharks, “give people from all
walks of life a chance to chase the American dream and potentially secure
business deals that could make them millionaires” (ABC, 2024, para. 1). The
primary Sharks are Mark Cuban (Owner of AXS TV and the Dallas Mavericks), Daymond
John (CEO of FUBU apparel), Kevin O’Leary (Venture capitalist) Barbara Corcoran
(Co-founder of the Corcoran Group), Lori Greiner (QVC host), and Robert Herjavec (CEO & innovator)(Canal
et al., 2016). Each season also includes special guest Sharks. Guests on the
show pitch their products or business ideas to the Sharks, hoping one of them
will “bite” and supply the funding needed for their ideas in exchange for a
certain percentage of the company or other terms.
Slide 3:
Each episode of Shark Tank has an average viewership
of 4.2 million (for season 14) and more, including streaming services (McEvoy,
2023). Furthermore, for companies and products selected to air on TV, some
experience increased business exposure whether a deal is made because Shark
Tank is a platform to showcase these products to reach millions (McEvoy, 2023).
However, the Shark Tank selection process is very competitive. Shark Tank
receives 35,000 to 40,000 applications from business owners each season, and
around 1,000 of those applicants advance to the second stage of interviews
(Levin, 2019). Season 7 filmed 158 pitches and aired 115 (Canal et al, 2016).
Season 9 filmed 158 pitches and aired only 88 (Levin, 2019). So, the
probability of being selected for the show is 0.40%, and for a pitch to be
aired is 0.22% and 0.29%, respectively. The odds are very low, yet
entrepreneurs apply and reapply yearly.
Slide 4:
ABC claims, “Whichever way the wheeling and dealing
may go, many people’s lives will be better off – because they dared to enter
the unpredictable waters of the "Shark Tank” (ABC, 2016, para. 2). Each episode of Shark
Tank has an average viewership of 4.2 million (for season 14), and more
including streaming services (McEvoy, 2023). Furthermore, some companies
experience increased business due to the exposure if aired (McEvoy, 2023). While
some companies benefit from handshake agreements with the Sharks, is the
program a dream come true for entrepreneurs, or does it fall short of
expectations? One Forbes article examines data from the show's first seven
seasons to provide insight.
Slide 5:
Figure 3: Shark Tank infographic. Michael
Stewart (2016). Getty Images.
https://web-p-ebscohost-com.library.capella.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=75f29d27-a470-4d5d-9d4c-0b5a0b7888d7%40redis
The Forbes article, Shark Tanks’s Toothless Deals,
analyzes 237 of the 319 deals offered over the first seven seasons. Forbes placed
the raw descriptive data into categories that can be counted. This counting process
“produces numerical values which summarize the data and can be used in
subsequent processing” (Kenny, 2014, para. 2). The article examines several
categories of descriptive data: deals offered, deals not offered, deals closed,
terms that changed, and terms that remained the same, and if the company is
still operating.
The pie chart on the left shows the proportion of
deals that either closed or fell through. Of the 237 deals offered by the
Sharks, 134 deals closed, or 57%, as displayed on the pie chart (Canal et al,
2016). The number of deals that fell through is 103, or 43% per the pie chart. The
second pie chart examines the details of the 134 deals that closed. According
to the chart, 95% of these closed deals are still operating, 4% were shut down,
and 1% were sold. So out of the 134 closed deals, 127 companies are still
operating, five were shut down, and one was sold (approximate values due to
inability to have fractions of companies/deals as 95% of 134 = 127.3, 4% of 134
is 5.36, and 1% of 134 is 1.34). So, 127 companies/products out of 40,000 are
still successfully operating, while 110 of these pitches, or 46%, did not get
an offer, the deal fell through, or they closed operations. So, the probability
of the offered deal closing is 57%, and the probability of the company
remaining in business after closing is 95%. While the odds of being accepted
for the show are small, the chances of a business or product getting a deal and
maintaining operations after several years are overall more favorable.
Slide 6:
Figure 4: Shark Tank infographic. Michael
Stewart (2016). Getty Images.
https://web-p-ebscohost-com.library.capella.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=75f29d27-a470-4d5d-9d4c-0b5a0b7888d7%40redis
The article examines the deals made by each of the six
main Sharks and compares the data using a stacked bar chart featuring the
number of solo deals offered, the number of closed solo deals, the number of
closed deals with terms that remained the same, and the number of deals with
changed terms. The stacked bar chart is displayed on the left; however, I transferred
the data to a multi-bar chart to arrange the data side-by-side for comparison.
Per the Forbes article, Mark Cuban “stuck to his
promises the most’ (Canal et al, 2016, para. 1). He also has a higher number of
closed deals and unchanged terms than the other Sharks. Cuban offered 32 solo
deals and closed 28. Of the 28 closed deals, 24 terms stayed the same, and 4 changed.
J Daymond John offered 27 deals and closed 16 deals. Of those 16 closed deals,
2 deals’ terms remained the same, and for 14 deals, the terms changed. Kevin O’Leary
has the least in 3 of the categories out of all the Sharks. O’Leary only made
14 solo offers, of which 8 closed, and of those 8, 3 terms remained the same,
and 5 changed. Barbara Corcoran had 28 offers, 14 closes, 6 with changed terms,
and 8 deals where the terms stayed the same. If the number of offers made were
the only comparison, then Lori Greiner would appear to have the highest number
at 35 solo offers. However, the Shark only closed on 17 of her deals, which is
49%. Of the 27, 7 terms stayed the same, and 10 changed. And lastly, Robert
Herjavec offered 24 solo deals, closed 11, 2 deals stayed the same, and 9 deals
changed (Canal et al., 2016). Out of the 160 deals offered by the six primary
hosts, only 44 total deals closed with no changes to the original terms
offered.
Slide 7:
On the stacked bar chart, Forbes also lists the
percentages of each category out of the total number of offerings for each
Shark, which was also transferred to a bar chart. The percentage of deals that
closed about their deals offers ranges from 46% to 88%, with Mark Cuban being
the highest and Robert Herjavec being the lowest. As you can tell from the
chart, at 75%, Mark Cuban kept the terms the same as those offered in more
deals than the other five Sharks. Daymond John, Kevin O’Leary, and Robert
Herjavec had fewer deals where the terms remained the same out of the 6 Sharks,
with John at the lowest at only 2 deals (7%). The terms changed ranged from 13%
to 52%, with Daymond John with the highest percentage.
Slide 8: Conclusion
For some entrepreneurs, appearing on the Shark Tank
series and securing investment allows the company to grow and experience
successes unattainable without essential funding. Some companies may gain popularity and notoriety
by showing their product pitch to millions of viewers, but that is not the case
for most. According to Forbes, “73% of the entrepreneurs did not get the
agreement they made on TV, including 43%
who did not get a deal at all (Canal et al., 2016, para. 1). Out of the 40,000
applicants annually, only around 150 are selected to share their pitch with the
Sharks. Over seven seasons, the six main Sharks only offered 160 solo deals. Of
the 160 solo deals, only 94 deals closed. Furthermore, only 44 of the 94 deals
closed without changing the original agreed-upon terms. This means that over
seven years, out of the 280,000 applicants, the Sharks only close approximately
13 deals, and only 6 deals a year close without term changes.
Per Mark Cuban, “Shark Tank is designed to help companies started in basements, in small
towns, started by inexperienced founders to take their companies places they
could never dream of going” (McEvoy, 2023, para. 10). While that is true for a
limited number of businesses, the majority do not obtain the financial backing
they are seeking.
Although Shark Tank has
been around for 15 seasons, an analysis of the compiled data from all seasons
and multiple Shark deals would help provide an even more accurate portrayal of
the deals. Since Mark Cuban plans to exit the series after the 16th season
(McEvoy, 2023) and close approximately 88% of the total deals (Canal et al.,
2016), the show's producers may need to consider this when finding a
replacement with a similar means to invest to maintain the current number of
successfully closed deals.
Slide 9:
References
ABC. (2024). Shark
Tank: About. ABC Entertainment. https://abc.com/show/535e2b07-18a9-4d94-9803-9ed8257b9d23/about-the-show
Canal, E.,
Kauflin, J., & Adams, S. (2016). Shark Tank's toothless deals. Forbes,
198(7), 24-25. https://web-p-ebscohost-com.library.capella.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=75f29d27-a470-4d5d-9d4c-0b5a0b7888d7%40redis
Kenny, P.
(2014). Better business decisions from data:
Statistical analysis for professional success. Apress.
Levin, G.
(2019, January 7). Shark Tank: All your burning questions answered. USA
Today. https://www.usatoday.com/story/life/tv/2019/01/04/we-answer-your-shark-tank-burning-questions/2463620002/
McEvoy, J. (2023,
January 10). Inside the secretive world of Shark Tank deals: Who the real
winners are. Forbes. https://www.forbes.com/sites/jemimamcevoy/2023/01/10/inside-the-secretive-world-of-shark-tank-deals-who-the-real-winners-are/
Stewart, M.
(2016). Shark Tank infographic [Figure 2,3]. Getty Images. https://web-p-ebscohost-com.library.capella.edu/ehost/pdfviewer/pdfviewer?vid=1&sid=75f29d27-a470-4d5d-9d4c-0b5a0b7888d7%40redis
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