20 Shark Tank Myths You Believed – Debunking Common Shark Tank Myths

Shark Tank is one of the most beloved shows that people around the world eagerly wait for. It is equally enjoyable for people with business and non-business backgrounds. The concept and format of the show are based on reality, so viewers often have myths about what actually happens behind the curtains or after the show. 

While it all looks like a reality, there are several aspects that you must know about. I will bust or confirm the most common myths that viewers have regarding Shark Tank, depending on the reliable information from the producers. Scroll down to clear the doubts you have regarding the show. 

Behind the Investments: Debunking the Myths of Shark Tank

Myth #1: Every pitch is aired on the television.

Fact: Similar to every other TV show, Shark Tank also does a lot of shooting. All recorded pitches do not get aired because the show has limited television time to present the audience with the best. The most entertaining, controversial, or revolutionary pitches get picked by the director. This ensures the removal of redundant information and provides more time to accommodate four pitches per episode. 

Myth #2: Deals promised on Shark Tank are final.

Fact: Deals made on Shark Tank are not final because investors never invest based on word of mouth. The financial aspects of businesses are thoroughly checked by the financial advisors of the Sharks. The deals are often renegotiated if any unforeseen or hidden circumstances appear during the prudential reviews.

Myth #3: Sharks do not invest their own money.

Fact: The agreements reached on the Shark Tank are binding only to the Sharks. The investments are made by the Shark, who offered them on the show. However, the investments can be direct or indirect. Investors often invest through their companies instead of putting the money directly into the business. 

Myth #4: The valuation of a business on Shark Tank is accurate.

Fact: The valuations at which the deals are negotiated on the Shark Tank do not reflect the exact net worth. The business owners inflate the valuation to get more cash for every share in the equity. Even the Sharks invest based on an estimated valuation that they work out after questioning entrepreneurs. 

Myth #5: Every business striking a deal on Shark Tank becomes successful.

Fact: While appearing on Shark Tank can add to the popularity of the products, a deal does not guarantee success. The success of the business after striking a deal on Shark Tank depends upon several factors like the execution of plans and market conditions. Sharks can only offer their expertise, but they cannot guarantee supernormal profits. 

Myth #6: Businesses become successful after appearing on Shark Tank.

Fact: Shark Tank is a good platform to propel a start-up. However, just being on the show never guarantees success. Appearing in front of millions of viewers can help market the cause and features of the products. This instant marketing can probably have some impact on the sales, but it never promises success. 

Myth #7: Sharks are the best possible investors.

Fact: Sharks have a diversified investment portfolio that enables them to understand different business models and markets. Being the jack of all trades is not always the best solution for a business. Entrepreneurs often need more niche investors for their companies. The mode of finance might not be suitable for the business because Sharks tend to put their interest above the business.

Myth #8: Every entrepreneur gets valuable feedback from the Sharks.

Fact: The business pitches successfully making the cut have the most insightful feedback from the Sharks. These feedbacks are not always the best advice that entrepreneurs can get. None of the suggestions are based on market research or detailed analysis of the business. Sometimes Sharks even refrain from advising entrepreneurs on anything. 

Myth #9: Every Shark is independent.

Fact: The negotiations and discussions on the show are designed to ensure maximum independence. The Sharks know each other really well, so they influence each other intentionally to reframe a deal. For instance, Barbara Corcoran often considers the input from other Sharks and decides accordingly. 

Myth 10: Shark Tank pitches happen in real time.

Fact: Business investors and venture capitalists never invest funds after 10 to 15 minutes of discussion. Considering this, most pitches take over an hour to complete. The television crew adds dramatic effects to attract viewers’ attention. A pitch is condensed from an hour to a few minutes based on the important business aspects discussed. 

Myth #11: Every pitch on Shark Tank is spontaneous.

Fact: The television crew provides guidelines to the entrepreneurs regarding the procedure to pitch on the show. Presentations are carefully planned to avoid misinformation. However, the Sharks do not know about the business before the pitch. Their questions are spontaneous.

Myth #12: All products on Shark Tank are patented and unique.

Fact: Products appearing on Shark Tank can be patented or non-patented. The patented products are legally secure, so Sharks prefer investing in them. On the contrary, the non-patented products are slightly redesigned versions of the existing brands. These products mostly face legal repercussions from competitors. 

Myth #13: Only fully developed products get a deal on Shark Tank.

Fact: While completely developed products have more chances of getting a deal on Shark Tank, prototypes are also allowed. If an entrepreneur demonstrates the idea properly and convinces the Sharks that the product would have a sustainable market, striking a deal is possible. Feasible product development and financial sustainability of the product in the future are important.

Myth #14: Only businesses that make a deal on Shark Tank benefit from the appearance on Shark Tank.

Fact: It is more probable for a business to succeed if it strikes a deal with Sharks because it can benefit from their expertise. However, other businesses can also benefit from the exposure on offer. Advice from the Sharks regarding the business model and the free global marketing is as valuable as getting an investment. 

Myth #15: The on-show and real-life personalities of the Sharks are the same.

Fact: Never believe anything blindly that you see on television. The on-show personality and the dramatic effects exaggerate or change the whole perspective of any comment given by the Shark. The real-life personality is somewhat, if not entirely, different from what they present on television. 

Myth #16: Entrepreneurs on the show are first-time business owners.

Fact: The entrepreneurs appearing on the show are not necessarily first-time business owners. Shark Tank is the ideal platform for business owners to propel their start-ups. A start-up business does not mean that the business owner is fresh, but the idea is new and revolutionary.

Myth #17: Every company seeks investment.

Fact: Shark Tank has a tailor-made format for newer businesses because entrepreneurs seek investments from known investors. However, most anaemic or developing businesses appear on the tank to seek exposure in the form of marketing and advice. The entrepreneurs are often aware that their current business models will not earn them the funds they are seeking, but they seek exposure instead.

Myth #18: Sharks invest only for financial returns. 

Fact: The Sharks are established business people and investors. While most people invest to earn money, Sharks keep other considerations in mind. For instance, Mark likes doing businesses that he can scale, while Lori invests mostly in unique products that can be sold at the retail outlets. They invest money in start-ups that complement their interests.

Myth #19: Entrepreneurs must give up a large portion of their company. 

Fact: Sharks usually ask for more equity in the company than what the business owner offers initially. The higher demand for equity is due to the unrealistically high valuation presented by the owners. Sharks also demand more equity when the business is capital-intensive, and equity dilution is inevitable in the future. The entrepreneur indeed has to give up more equity, but the reasons are genuine. 

Myth #20: Sharks are ruthless.

Fact: Sharks are seasoned investors. They never let their emotions and courtesy get the better of them because it goes against the format and purpose of the show. However, they give entrepreneurs the best possible advice to ensure they do not exit the tank without earning anything. The Sharks are mostly straightforward in letting the contestants know their weaknesses and improve.

Final Verdict

As you can confirm from the discussion above, most myths relating to Shark Tank are nothing but misconceptions. The myths that I have elaborated on in this article are the most common questions in the minds of most viewers. The answer to each myth is confirmed by credible sources like the production staff or interviews with the Sharks.

Whether a myth is true or not, we could not agree more that Shark Tank is a show of its kind. Its format is different and revolutionary. Shark Tank has played a value-adding role in the lives of most entrepreneurs and their businesses.

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