Shark Tank “Entities” Can Take 5% Equity No Matter What

by Kyle in Shark Tank, Startups
Comments Off on Shark Tank “Entities” Can Take 5% Equity No Matter What 0 Like 2,995

We talk about Shark Tank on ABC here on nibletz.com quite a bit. That’s partly because it’s a great show about startups and partly because no matter what we’ve reported it’s still my favorite show.

In fact, Daymond John and Mark Cuban have done some great things for entrepreneurs, startups, and even students interested in startups and entrepreneurship. Both Cuban and John speak regularly at entrepreneurship conferences and colleges. John even held a Google+ hangout for high school students studying business.

We recently obtained the application for your business to appear on the Shark Tank. It’s not a top secret application or anything like that. Just about any entrepreneur interested in Shark Tank’s open casting calls can obtain the same application.

We highly advise, that if you’re planning on pitching your startup to Shark Tank in their open casting call, and especially if you make it past that point that you read the fine print.

As the headline states, Shark Tank producer’s Finnmax, Sony Pictures Television, and the American Broadcasting Company (ABC), have some very interesting rights, if you chose to appear on the show.

First off they have an option to receive a 2% royalty of the operating profits of any business that actually appears on the show itself, regardless of whether the sharks invest.


If they decide not to take the 2% royalty they have the option to instead take a 5% equity interest in the business.

Now keep in mind this 5% equity investment isn’t in exchange for any funding at all and isn’t contingent on the startup getting funding from one of the sharks. This is just for appearing on the show itself.

That section of the application does go onto say that the “Shark Tank Entities” will give good faith consideration as to which of the two options the business owner/entrepreneur wants them to have, be it the 2% royalty or 5% equity, however it’s at the sole discretion of the “entities” and the irrevocable option is available for two years.

Shark Tank is currently on break but will return for a fourth season and I will watch every episode as I’ve done on the previous three seasons. But now we all know a little more about the show.

Linkage

Read this story about when a Shark Tank startup gets reneged on 

See more of our Shark Tank stories here

 

Shark Tank: When A Startup Gets Thrown Back

by Kyle in Everywhere Else, Featured, Shark Tank, Startups
Comments Off on Shark Tank: When A Startup Gets Thrown Back 0 Like 27,940

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If If you’re a regular reader of Nibletz, the voice of startups everywhere else, then you should also be a loyal viewer of The Shark Tank on ABC. Despite the story I’m writing right now it’s still my favorite television program of all time. If you’re not familiar with The Shark Tank on ABC, it’s a show that pits real startups and entrepreneurs against self made millionaires; Robert Herjavec, Kevin O’Leary, Barbara Corcoran, Daymond John and Mark Cuban.

It must be heart breaking to be like Oregon entrepreneurs Sue Krukopf and Nancy Bush who pitched their startup, mywonderfullife.com, on the season premiere of Season 3 of the Shark Tank. While they had a good enough idea to get past an open casting call and other preliminary judges, when they made it to the tank, all five investors balked and they walked away with nothing. One of the rules of the Shark Tank is that you have to convince at least one of the “sharks” to invest exactly what you’re asking for or more, or you walk away with nothing.

What has to be even more heartbreaking is cases like Keeley Tillotson and Erika Welsh (coincidentally also from Oregon) whose Wild Squirrel Nut Butter startup was featured on this past Friday’s episode of Shark Tank. This Friday Shark Tank actually ranked number one out of all of the programs in it’s time slot, so millions and millions of people watched as Tillotson and Welsh, two quirky college students pitched their business.

In their episode it got down to the wire. Four of the sharks were out and only self made real estate mogul, turned shark, Barbara Corcoran was left. The girls were looking for $50,000 for 10% equity in their company. Corcoran countered with $50,000 for 40% equity of their company.

More after the break

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