Shark Tank Valuation Calculator
Enter the amount of money being invested and the percentage of the company being offered. The calculator will show the business valuation behind the deal.
Someone can walk into Shark Tank asking for $200,000 for 10% of the company. We know how much money they want and how much of the business they are offering for it. But those two numbers give us something else too. The entrepreneur is putting a value on the complete company.
The calculator works that number out. Put in the $200,000 investment and 10% equity, and you get the valuation behind the deal. You can do this with an offer you hear on Shark Tank. Or you can put in numbers from your own business.
Calculate the Business Valuation
You only need the investment amount and equity percentage.
An investment of $200,000 for 10% values the whole business at $2 million.
$200,000 ÷ 10% = $2,000,000
How Does a Shark Tank Valuation Work?
Take that $200,000 for 10% ask. The entrepreneur is saying that 10% of the business is worth $200,000. So, if 10% is worth $200,000, the complete company works out to $2 million.
Now give away more of the business for the same money. $200,000 for 20% puts the valuation at $1 million. The entrepreneur is still getting $200,000. They are just giving the investor twice as much of the company for it.
What Happens When a Shark Wants More Equity?
This happens quite a bit once the Sharks start making offers. The entrepreneur might want $200,000 for 10%, but a Shark wants 20% for the same $200,000. The amount of money on the table has not moved. The percentage has.
And that makes a pretty big difference to the valuation. The entrepreneur started at $2 million with the 10% ask. The Shark’s 20% offer brings it down to $1 million. So, a Shark can offer every dollar the entrepreneur asked for and still value the business very differently.
Why Do the Sharks Care About Valuation?
The Sharks want to know what they are getting for their money. If a Shark puts $200,000 into the business and only gets a small percentage, that small percentage needs to be worth the money. Otherwise, why would they put $200,000 into it?
Well, this is where the entrepreneur’s numbers become important. How much are they selling? And after paying all the costs, how much are they actually making? The Sharks want to hear these numbers before agreeing that the business is worth what the entrepreneur says it is worth.
And what if the business is growing really fast? Maybe sales are much higher this year than they were last year. The entrepreneur could be expecting that growth to continue, which is why they have put a higher value on the company.
The calculator will tell you the valuation from the deal. Pretty simple. But will the Sharks think the business is really worth that much? Maybe not. They could look at the same business and put a much lower value on it.
Valuation Is Not the Same as Revenue or Profit
It might sound confusing that a company worth $2 million has never actually made $2 million. But the valuation is not how much money the business has made. That is what the whole business is being valued at. It doesn’t mean the founder has $2 million or that the business has made $2 million.
Revenue is how much the business has sold. But, of course, all of that money is not profit. There are products to make, shipping to pay for and other costs that come with the business. After all those costs are taken out, whatever is left is the profit.
So, imagine a company has $1 million in sales. Pretty good! But if it spent $800,000 to make those sales, only $200,000 is left. The business sold $1 million worth of products, but it actually made $200,000 in profit.
Then why would somebody value the company at $2 million? The entrepreneur could be looking at how much the business might grow in the coming years. Maybe the sales are increasing and they believe the company will become much bigger. That expected growth can also be part of the value they put on their business.
Try a Real Shark Tank Deal
Load real on-screen terms into the calculator, then open the company story if you want to see what happened in the Tank.
The Woobles
The accepted on-screen deal was $450,000 for 6% with Mark Cuban and Lori Greiner.
Shark Tank Valuation Calculator FAQs
How do you calculate valuation on Shark Tank?
Divide the investment amount by the equity percentage written as a decimal. For example, $100,000 for 10% is $100,000 ÷ 0.10, giving a $1 million implied valuation.
What does $200,000 for 10% mean?
It means the investor would put in $200,000 and receive 10% ownership under those terms. The deal implies a $2 million valuation for the whole company.
What does $500,000 for 20% value a company at?
$500,000 divided by 20%, or 0.20, gives an implied valuation of $2.5 million.
Does the calculator work for a Shark’s counteroffer?
Yes. Enter the Shark’s investment amount and the equity percentage the Shark wants. You can then compare that valuation with the entrepreneur’s original ask.
Can I use this calculator for my own business?
Yes. If you know how much investment you want and what percentage of equity you would offer, the calculator shows the valuation implied by those two numbers.
More Shark Tank Calculators
Need a different part of the deal? Try another calculator.