Ami Kassar wrote a blog post Passing Up the Opportunity to Appear on 'Shark Tank
Brooklyn Slate is founded by Sean Tice and Kristy Hadeka, they make cutting boards out of slate. They decided to end their desire to be on Shark Tank... good for them!
Ami Kassar said "Mr. Tice and Ms. Hadeka declined. And they did so for an intriguing reason: In order to proceed, they were required to enter into an agreement with Finnmax, the show's producer, that would have given Finnmax the option either to receive a 2 percent royalty on the operating profits of the company or take a 5 percent equity stake." Did you know that? However correct Ami is in his analysis of understanding the important differences between equity and debt, there is a much more important issue with ALL reality shows portending to catapult starry eyed aspirational entrepreneurs.
Shark Tank is entertaining... it is Dangerous
It is NOT how things happen in the world of entrepreneurship.
The reality shows like Shark Tank, Restaurant Impossible, Americas Next Great Restaurant, The Apprentice and the like do a great disservice to those contemplating starting a business. It is equivalent to the many entrepreneurs that come to me for help with lots of passion, enthusiasm and lack the basic understanding of the road to entrepreneurship... most ignore advice and they eventually crash.
Just look at how Americas Next Great Restaurant virtually ruined the life of the winner Jamawn Woods of Soul Daddy... promoting opening 3 restaurants simultaneously and all 3 closing in less than 3 months.
The Outliers Get the Media Attention
All these shows prove is the outlier effect... meaning there will always be someone who is successful in spite of... and you can fill in the blank. We call it the Oprah Enthrallment... people who aspire to be successful point to Oprah and say "if she can do it, then I can do it" Yes indeed except see how much hard work she put into her ventures and the support she had to get there. She was not an overnight success.
The cleaning brand Method is another entrepreneurial legend appearing in a CNBC video last year. They had not product, just a prototype, got an appointment with Target and jumpstarted the business to "success". Can I advise those who aspire to create a consumer based company to build their plans and investments around a prototype? No. This is another example of an outlier.
I teach Entrepreneurship at 2 leading universities and it takes knowledge of understanding the market problem, ideas that fit solving those problems and creating a business model that can make money.
So, they are correct in Passing Up the Opportunity to Appear on 'Shark Tank'... and to prove this, maybe Ami Kassar should follow up on Sean Tice and Kristy Hadeka next year. I anticipate they will be successful. Maybe we should see how Jamawn Woods of Soul Daddy is doing? Or check back in a few years to see how those instant restaurant renewals are succeeding?