Shark Tank: Do Two-Thirds of Deals Fall Apart?
J Thoendell stashed this in Film
As many as two-thirds of those televised deals never come to fruition, estimates TJ Hale, who has interviewed more than 70 participants for his show, Shark Tank Podcast. Investors receive no information prior to filming, so they get to perform due diligence only after taping. They may discover legal, tax, or financial red flags. Or they can just change their minds. “One entrepreneur said basically the shark just never called them,” says Hale.
Contestants can back out, too. Some decide that the deal would give up too much of their companies, or they admit they merely wanted exposure. ABC won’t comment on negotiations between sharks and entrepreneurs; legal contracts often prohibit entrepreneurs from discussing post-show negotiations.
70% of deals falling through sounds crazy high. I wonder if this will eventually hurt their reputation.