Hacker News Reader

Comment by breck | Hacker News Reader

Ever since he joined Shark Tank that show has become one of the best things to happen to our economy in the 2000's.

He's exposing millions of Americans to the long term benefits of a value creation, non-linear thinking, honesty is the best policy, builder/craftmanship mindset.

When I was a kid growing up far away from Silicon Valley we had "The Apprentice" to learn from. Shark Tank (especially Cuban, but really the whole cast), is orders of magnitude better.

View on HN

I believe there was a point when Shark Tank would take some amount of equity from every business that came on the show regardless of if one of the sharks invested or not. Cuban called BS and said he wouldn't be on the show if that was the case. The policy was removed as a result.

Smart move too, since you will probably get better companies on the show without that sort of policy.

Yes. I can confirm this is exactly what happened (roommate almost went on the show, pre-Cuban. though I'm sure theres a lot more to the story that insiders would know).

Curious: does the show take equity IF the sharks invest? I haven't really seen the show beyond a few episodes.

No. The negotiations are real, and while there is a follow-up due diligence to close (or not) the deal, that is it. Note that anywhere from 1/3 to 2/3 of deals fall through in the due diligence phase, depending on the shark.

The first season, before they brought on Marc Cuban, the show took a percentage just for appearing on the show (so even if you didn't get a deal, you still gave up equity). The second season, Marc Cuban came on and insisted they remove that rule.

https://www.forbes.com/sites/emilycanal/2016/10/21/about-72-...

https://www.cheatsheet.com/entertainment/do-the-deals-on-sha...

I have attended a few presentations where Phil Dumas, founder of UniKey, described his experience winning an investment on Shark Tank. He explained that there were many unattractive terms in the agreement he received after the recording that made him ultimately decline the investment. My takeaway was that it doesn't matter what happens on the show, the real offer is more complicated.

(I have never seen the show, so I don't know how the offers are described. As an investor, I cannot imagine any offer that can be made verbally in the timespan of a television episode being meaningful.)

It's meaningful in getting future guests/contestants to be willing to appear on the show. If all of the sharks only ever said no, nobody would want to go on the show. They have to at least make the audience think deals are happening to keep an audience. After that, if the deal actually completes or not are not relavent to the producers of the show. They just need to line up the next round of chum to bring out in front of the sharks.

I have never seen the show, so I don't know how the offers are described.

Usually it's just one of the sharks offering something like "I'll pump in $500k for a 20% stake." (numbers made up) No details beyond that.

The shows are edited for time. Each negotiation, which airs for about ~10 minutes on the show, takes an average of 2 hours to shoot (with a surprisingly wide variance).

I too had a lot of respect for Cuban regarding this.

Article from Inc:

Mark Cuban Made Shark Tank Change Its Contracts After threatening not to return until an equity clause was removed from contestants' contracts, Mark Cuban finally got his way.

Just for appearing on the show, owners agree to give up 5% of their company or 2% of future royalties.

...

Cuban said the clause was removed retroactively, meaning every contestant who's appeared on the show since Season One will be relieved of the commitment. However, how that will work out logistically remains unclear.

https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-ta...

I love when "medical" products with incredible claims show upon Shark Tank because Cuban usually shreds the owner's claims in about 2 seconds. He doesn't seem to tolerate grifters very well.

This venture seems like a shot across the bow of anyone trying to squeeze an unfair percentage on top of generic drugs. Kudos to Cuban for launching this but it is something the US government should have been doing decades ago through drug price negotiation for medicare.

You have a rather charitable interpretation of the show. I saw 4 powerful combative "investors" holding ordinary folks in their fists, playing with their lives, and sometimes even verbally abusing them. The show offers a lottery ticket on top of the lottery ticket out of day-to-day work that is creating a new business. What invention the participants bring is commodified a second time, a double grotesquerie. I absolutely can't stand it, and the show, in teaching viewers to hold unsuccessful contestants in contempt, also promotes a sort of circus-like misanthropy.

Thanks for this counterpoint.

You grew up watching The Apprentice? wow, wild. it started airing in 2004

So.. Someone who was 12 back then is now 29. Doesn't seem that wild to me.

...Great, thanks for checking in.

Yup, my mom and I watched it together for years. At least it was worth it for that QT (now somtimes we still watch Shark Tank together). This is back when I was still a script kiddy and lemonade stand entrepreneur.

I also read "Art of the Deal" or whatever that crap was called.

Sometime I can tell you the story of how I sued a Fortune 50 company after a minor disagreement because I thought that's how business was done.

I can only laugh about all that now, and shout "thank you" to Cuban that we have at least one highly entertaining business show that also teaches mathematically correct ways of thinking about business.

Reply on news.ycombinator.com