Shark Tank is a popular show among enthusiasts of business and start-ups. In fact, in the USA, Shark Tank is one of the top reality shows that families watch together. Shark Tank is essentially a business reality TV show where entrepreneurs pitch their businesses to investors to raise funds. The investors on the show are referred to as “sharks.” In Shark Tank, entrepreneurs try to convince the sharks of a higher valuation for their business, while the sharks try to get them to accept investments at a lower valuation. The show started in Japan in 2001 and has been broadcast under different names in 50 countries worldwide. The 50th version of the show is Shark Tank Bangladesh, which started airing in April 2024. In the first episode alone, the sharks invested over 10 million BDT in potential businesses led by talented youth. But what exactly is Shark Tank, and how does it work? We’ll discuss this in today’s video.
Overview
In 2001, a show called “Money Tigers” was telecasted on Nippon TV in Japan. The show was co-created by Nippon TV and Sony Pictures. It received a good response initially and ran for four seasons. However, instead of proper pitches, entrepreneurs often pleaded for funding, leading the showrunners to eventually cancel the show. However, producers in the UK saw potential in the format and, with some tweaks, launched a show called “Dragons’ Den” in 2005. Dragons’ Den gained popularity in the UK and has aired 21 seasons on BBC so far. Following its success, several countries created their own versions of the show. In Australia (2005) and Canada (2006), it aired as Dragons’ Den. Meanwhile, in Israel (2006), the show was called “The Shark,” and in Finland (2007), it aired as “Lions’ Den.” A more fast-paced version, “Shark Tank,” was launched in the USA in 2009, and the name helped the show gain popularity. Since then, several countries have aired versions of Shark Tank. To date, Shark Tank, Dragons’ Den, or Lions’ Den has aired in 50 countries, with Shark Tank Bangladesh being the 50th version of this format.
As a business reality TV show, Shark Tank is popular among start-up founders, business owners, and investors. Entrepreneurs want to feature on Shark Tank not just for investment but also to leverage the guidance and network of experienced sharks, expand their businesses, and reach a larger audience. In the sixth season of Shark Tank USA in 2014, an apparel brand called Bombas raised $200,000 in funding, and it is considered one of the most successful companies to feature on Shark Tank. There are also instances where companies have done exceptionally well even without securing investment. For example, in the fifth season of Shark Tank USA in 2013, the home security company “Ring” failed to raise funds for its smart doorbell, but in 2018, Amazon acquired the company for $1 billion. Therefore, appearing on Shark Tank itself can be lucrative for a start-up or business. When a company is featured on Shark Tank, it gains visibility, which can boost sales and help in securing future investments. Recently, companies have been using Shark Tank more as a platform for promotion rather than just to raise funds. On the other hand, many investors also choose Shark Tank to discover potential businesses.
How it Works
On TV, we see a 10-minute pitch session, but how does this pitch session actually work? Before pitching in front of the sharks, entrepreneurs must first convince the Shark Tank production team that their idea is worthy of investment or at least presentable to the sharks. At the beginning of each season, the Shark Tank production team releases an application where entrepreneurs need to register. At this stage, they usually provide their contact details, business ideas, performance information, and the amount of funding they want to raise. After the initial screening, they are called for the first audition. Once the audition is completed, the Shark Tank team conducts due diligence on the businesses or ideas and selects the eligible ones. In countries like the US or Australia, agents of the TV show sometimes seek out prospective entrepreneurs to appear on the show.
At one time, entrepreneurs had to give 2% of their operating income or 5% equity to the Shark Tank production team just to appear on the show. For the first four seasons, Shark Tank operated this way. However, when Mark Cuban joined as a shark, he demanded that this rule be removed; otherwise, he would no longer participate as a shark. His argument was that this rule discouraged talented entrepreneurs from participating in Shark Tank because no capable entrepreneur would agree to give away 5% equity or 2% of their income just to pitch on a show. This would lower the quality of businesses coming to the show and reduce its overall quality. After Mark Cuban’s condition, the Shark Tank production team removed this clause, even for previous contestants.
Once selected to appear on the show, entrepreneurs must pitch their product or business idea directly in front of the sharks. Although Shark Tank follows a specific format, it is not a scripted show. Entrepreneurs prepare their pitches in their own way. The production team may give suggestions on the pitch, but the entrepreneurs have full freedom to pitch as they wish. Typically, the pitch format includes an introduction of the entrepreneur and their business. The next phase is the “problem statement,” where the entrepreneur discusses a specific problem and how it affects everyday life. They then explain in detail how their business solves this problem and the innovative solution they have created. In product pitches, entrepreneurs often display their merchandise or give a live demonstration. After the pitch, there is a question-and-answer session between the sharks and the entrepreneur, where the sharks ask questions about the business to determine its valuation. Questions may include topics like revenue from previous years, operating expenses, marketing costs, etc. The sharks also ask how the investment will be spent and how it will generate returns. Sharks not only invest in the business but often in the entrepreneur as well, so they try to gauge the entrepreneur through various questions.
Afterward comes the negotiation phase. Entrepreneurs try to convince the sharks to invest at a higher valuation, while the sharks use their expertise and network to offer investment at a lower valuation. Multiple rounds of negotiations can occur, and entrepreneurs can also try to bring multiple sharks on board at once. Entrepreneurs often aim to onboard a shark who can guide them while also providing access to the shark’s network, suppliers, distribution, and other resources that could help scale their business. After several rounds of negotiation, the entrepreneur has two options: “deal” or “no deal.” If the entrepreneur accepts the shark’s offer, a handshake deal is made. However, if the sharks do not like the idea or if the entrepreneur is not satisfied with the offer, they may walk away empty-handed. Although the pitch we see on Shark Tank usually lasts 10 minutes, the actual pitch and negotiation session often lasts more than an hour.
However, a handshake deal does not guarantee that the entrepreneur will receive the investment. According to an article in Forbes, from seasons 8 to 13 of Shark Tank USA, about half of the entrepreneurs did not receive funds, and the terms and conditions were changed for 15% of the deals. Another Forbes report from 2016 revealed that 73% of the handshake deals offered in the first seven seasons of Shark Tank USA were not finalized. In India, during the first year of Shark Tank, only 42% of deals were closed. However, in the second season, Indian sharks closed 96% of deals. Several factors could lead to deals not being closed. After a handshake deal, the sharks’ teams research the business and verify the information provided during the pitch. Only if everything checks out is the deal finalized. However, entrepreneurs often have to wait until the show is aired before receiving their funds, which could take several months.
Shark Tank Bangladesh
In October 2023, it was announced that Shark Tank would also air in Bangladesh. Bongo, in collaboration with Sony Pictures Entertainment and with Robi as the title sponsor, signed a deal to bring the show to the country. Participant registrations began in November, and the verification process for applicants continued. In February, the sharks for Shark Tank Bangladesh were announced, and 12 sharks were introduced. Among the prominent sharks was Golam Morshed, the former Managing Director of Walton, who helped turn the company into a multibillion-dollar giant in Bangladesh’s electronics sector and is currently the Managing Director of Majesto Limited. Known for his innovative approach to product design and manufacturing, as well as bold marketing and promotional campaigns, Morshed has made a name for himself. Also featured was Sami Ahmed, CEO and Managing Director of Startup Bangladesh Limited, who has worked for nearly a decade at the policy-making level in the government to improve the IT and ITES sectors of Bangladesh. He continues to work toward enriching the country’s start-up culture by providing funding to potential start-ups through Startup Bangladesh.
Another notable shark was Nazim Farhan Chowdhury, Managing Director of Adcomm Holdings Group, one of Bangladesh’s largest advertising agencies, who has worked in the advertising industry for 30 years. Fahim Mashroor, a prominent name in Bangladesh’s tech industry who has founded AjkerDeal and BDjobs, was also introduced as a shark. Mashroor has worked to promote growth in the industry for over 23 years and served as the president of BASIS from 2012–2013. Other sharks included Samanzar Khan, Ahmed Leon Ali, Navin Ahmed, Kazi Hasan, Faatin Haque, Anika Chowdhury, Sausan Khan Moyeen, and Samuel Bretzfield.
On April 22, 2024, at a press conference held at the Holiday Inn, it was announced that Shark Tank Bangladesh would air every Friday night from April 26 on Dipto TV and the OTT platform Bongo. In the first episode, three of the four entrepreneurs received handshake deals, with the sharks pledging over 10 million BDT in investments. Sharks have so far pledged nearly 40 million BDT across nine ventures. Despite some criticism from netizens regarding the editing of the first episode and the entrepreneurs’ pitches, many viewers have expressed their opinions about the businesses receiving funding and the terms of those deals. Shark Tank has had a positive impact on the culture of fundraising for start-ups and businesses in every country where it has aired. It has raised awareness about new businesses and helped foster an investment mentality among the general public for small enterprises and innovative ideas. It remains to be seen whether Shark Tank Bangladesh will inspire the country’s talented minds to become entrepreneurs and encourage more people to invest.
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