Sharkansas Tank?
In mid-November, the popular reality TV show Shark Tank aired its 100th episode. The program is the American version of Dragon’s Den, which was produced in Britain and which has its roots in Japan, where the concept originated and was called Tiger of Money.
The format is the same: Entrepreneurs pitch their idea and investment request (X amount of money for Y percent of equity) to a panel of wealthy investors.
Panelists on the Shark Tank have varied over its six seasons, but longstanding anchors include Kevin O’Leary (who sold The Learning Company to Mattel), Barbara Corcoran (real estate mogul), Mark Cuban (billionaire businessman and owner of the Dallas Mavericks), Daymond John (global fashion brand FUBU founder) and Robert Herjavec (who sold his technology firm to AT&T).
Now in its sixth season, the sharks have invested well over $20 million in more than 100 entrepreneurial companies.
Each episode, four entrepreneurs are showcased in roughly 10-minute segments, which are edited down from about one-hour pitches.
The investor panelists pepper the entrepreneurs with questions about their product, market, experience and company valuation. If a shark isn’t interested, he or she will say “I’m out.”
If no sharks bite, the entrepreneur leaves the show empty-handed.
Investors who hear a pitch they like will make offers to the entrepreneur. For example, a business owner might ask for a $100,000 investment for 10 percent of her company. One of the sharks might offer that amount in cash, but want 40 percent equity instead.
Another shark may counteroffer, with $150,000 funding but want 50 percent. Any deal lives or dies in real time on the show (the best-case scenario for an entrepreneur is when several sharks want to invest).
But after the cameras are turned off, not all offers wind up happening, because some get hung up in the investors’ vetting process of the entrepreneur and the business.
Still, it makes for compelling television and, even more importantly, inspiring examples of American opportunity.
An estimated 30,000 people applied to be on the show last season; that’s a lot of entrepreneurs and a lot of business ideas.
The applicants come from all over the country, and only a few from Arkansas have actually made it to airtime. With in excess of six million viewers per episode, it’s a cinch then that far more people from our state have watched the show than actually been on it.
As television goes, it’s a great program idea. The sharks exhibit lots of personality, with their own competitive spirit often emerging. And the entrepreneurs, who come from all walks of life with all kinds of ideas (from amazing to zany and everything in between), are always interesting. Some you want to laugh at, some leave you awestruck, some you cheer on and some your heart breaks for. All are riveting in their own way because of their passion, and because so many of the ideas are so off-the-wall original.
It’s rare that successful TV does much more than generate viewers, but in this instance the substance outshines the style. They are real investors putting up real money on real business ideas with real risk; it just so happens that it’s filmed and shown on television.
The panelists make it clear they’re there for loftier reasons than to help ABC sell ads.
“The truth about America today is that small and midcap businesses are not being funded by banks anymore,” O’Leary told Entrepreneur magazine in an interview in 2012.
Just this week, Cuban said in a Bloomberg Radio interview that Shark Tank sends the message “that the American Dream is alive and well,” and there’s “absolutely no other platform” like it that encourages, supports, trains and gives guidance to fledgling entrepreneurs.
The platform’s distinct dynamics raise a broader question for a small state continually struggling to gain a grip in homegrown economic development.
Why not start an Arkansas Shark Tank program that brings our own wealthy investors and aspiring entrepreneurs together—without the distracting overdramatization of TV?
Arkansas has plenty of potential sharks (just go through the prominent business names in your head), and what better model to nurture and retain local innovative businesses than to give Joe or Jane Entrepreneur a chance to pitch their ideas to them?
The average ask on Shark Tank is just over $200,000, but many requests are much smaller—too small for most venture capital firms, who are primarily interested in huge scalable ventures that can deliver astronomical returns.
But a small entrepreneurial business that stays in Arkansas, employs 30 people, does several million dollars in revenue and delivers a return to investors is a big success for the state.
State sharks would value their role as enablers for passionate entrepreneurs as much as the national sharks—maybe more so, given that they would be investing in Arkansans.
A state shark tank program might be facilitated through the Chamber of Commerce, whose local presence in most towns would cast a wide net for applicants, with assistance from the Arkansas Economic Development Commission.
It’s a proven platform for uniting investors with entrepreneurial ideas they believe in, and Arkansas sharks, entrepreneurs and communities stand to benefit.
That’s my pitch. Who’s in?