Part of the fun of watching ABC’s Shark Tank is figuring out
whether you would invest in the businesses on the show. While there’s
no guaranteed formula, there may be some characteristics that make the
actual Sharks more likely to bite.
The team at Digital Exits,
a company that brokers deals for people looking to sell their online
businesses, watched the first five seasons of the show and crunched the numbers to determine what led to a deal.
The results are surprising. For instance, did you know that nearly half of contestants who pitch on Shark Tank receive
a deal? (Of course, some deals fall through post-appearance. Those
statistics were not included in this analysis.) Entrepreneurs that land a
deal generally have about $461,000 in gross sales and are often in one
of these five fields: food/beverage, household/kitchen, sports/fitness,
clothing/shoes and toys.
figures are less surprising, but just as insightful. Business owners
who are successful in landing a deal generally ask for less funding and
are willing to give up more equity than their counterparts. According to
the data, the average amount sought by entrepreneurs who succeeded in
getting a deal was about $144,000 for 26 percent of the company.
Entrepreneurs who walked away empty-handed were seeking about $290,000
for 19.6 percent of the company, on average.
Say you find yourself
in front of the Sharks. Who’s the most likely to give you a shot? Lori
Greiner and Kevin O’Leary might be just slightly more likely to offer
you a deal, but all of the investors are quite discerning.
For more, check out the data in the infographic below.