Anybody watch Shark Tank?

I like the show. I find it very interesting to see the different ideas and LOVE to see a guy or girl come in with a good idea and actually negotiate a good deal with these 'sharks'. But, not being a business mogul, there's something that puzzles me, betting someone here can enlighten me.
I was watching an old episode and a guy came on who already had a successful business selling things via the internet. He wanted to expand, offering the same product, but in a retail location now. His existing business is grossing over a million a year. The sharks seemed interested in the new venture, until they discovered that he already had a business. Then they wouldn't consider anything unless they got a big chunk of the existing business. This happens any time they hear that someone has another branch of the business.
I don't think it can be chalked up to being greedy because these people act as if it's expected that they get part of the existing business. they say things like "why wouldn't this include the existing business? I need some insurance on my money?" Well, you invest in people with no track record every day, this guy has a million dollar a year track record, he made a business work. There's your insurance.
I sold my GLH a few weeks ago. If the seller said, "sure, I'll take the GLH. Woah! Look at that huge tool box full of snap-on tools! What part of that tool collection do I get? I need assurance that this car will run". I'd have punched him in his left ovary.
Can an investor really expect to get a chunk of a business that is up and running just because they say so?

DrBoost wrote: I like the show. I find it very interesting to see the different ideas and LOVE to see a guy or girl come in with a good idea and actually negotiate a good deal with these 'sharks'. But, not being a business mogul, there's something that puzzles me, betting someone here can enlighten me. I was watching an old episode and a guy came on who already had a successful business selling things via the internet. He wanted to expand, offering the same product, but in a retail location now. His existing business is grossing over a million a year. The sharks seemed interested in the new venture, until they discovered that he already had a business. Then they wouldn't consider anything unless they got a big chunk of the existing business. This happens any time they hear that someone has another branch of the business. I don't think it can be chalked up to being greedy because these people act as if it's expected that they get part of the existing business. they say things like "why wouldn't this include the existing business? I need some insurance on my money?" Well, you invest in people with no track record every day, this guy has a million dollar a year track record, he made a business work. There's your insurance. I sold my GLH a few weeks ago. If the seller said, "sure, I'll take the GLH. Woah! Look at that huge tool box full of snap-on tools! What part of that tool collection do I get? I need assurance that this car will run". I'd have punched him in his left ovary. Can an investor really expect to get a chunk of a business that is up and running just because they say so?

Because they want someone who is vested. They want someone who is going to starve if they don't make it work. If dude is already bringing in $1M a year, then if this other branch fizzles, he's still going to Tahiti in the spring.

Also - I suspect that it raises questions about their cash management. If he's already banking $1M a year, why does he need their $250k? It says that either the $1M is bogus, or the burn rate of the venture is enormous, and their $250k will be the first of many.

Because "Golden Rule"? You know, he who has the gold makes the rules.

It would raise cash management questions for sure. I have no idea, if you company is grossing a million, you are netting 600,000, why are you asking them for 75K? But that's not the issue they raise. they seem to think they are entitled to the other business. I guess, for once, Logdog is right.

DILYSI Dave wrote: Because they want someone who is vested. They want someone who is going to starve if they don't make it work. If dude is already bringing in $1M a year, then if this other branch fizzles, he's still going to Tahiti in the spring.

This.

I have watched the show all the way up to the most current season. You will hear them say it again and again. They want the person to struggle to give them incentive. In other words, have more skin in the game for the "shark's" money.

Also look at it this way. The company is selling the same product on the internet and is trying to expand to brick and mortar stores. So by trying to keep the sharks out of the current online sales, the business owner and shark will be a partner and a competitor at the same time.

I watch it because I think the broad's got great legs.

gjz30075 wrote: I watch it because I think the broad's got great legs.

Technically, if she's a "broad" they're "nice gams."

And I think my buddy James, who used to be in my improv group, was on this show recently. Someone posted a screenshot of him on the show on Facebook, but he hasn't said anything directly. Maybe he can't yet?

jg