I'm always confused by why the sharks seem intent on insulting intelligence of the people who have existing viable (and rapidly growing) businesses. I mean who in their right mind would sell a good growth story for 5x? This happens constantly on this show too.

Shark Tank provides great advertising for all of these businesses. Things like the KissStix really go from regional products to national/international products thanks to the free 10 miute commercials on Shark Tank.

On the other hand, you have to remember that it is national television and to not be a d*ck. The TEC guy got great advertising for his company but he came off as a major *ssh*le in front of millions of people. That will have some negative ramifications down the line. As smart as he is for building up his company, I would never work for him because in 10 minutes of TV, I could tell that he would take the first opportunity to screw over ANYONE including me if i were to work for or with him.

On that note, the same is true for some of the Sharks. They really rip off lots of the inexperienced people on the show and it shows their TRUE character.

When you go on the show I heard you have to give a 2% royalty of that business to ABC or whatever show produces "shark tank."

My thought was, he had 2 businesses...offers a stake in the tiny business (so he gives a 2% royalty in a tiny business he owns). He then gets free advertising for his bigger business and doesn't have to give that 2% royalty of his "real" business.

Just my thoughts...could be totally wrong.

edited to add: Just read through what others posted...beat me to it

http://a.abc.com/media/primetime/sha...pplication.pdf

This the cooking company on that episode essentially took a 75k loan from Barbara for 40 percent of their company. It actually quite baffles me that Damon readily gives better offers to the sellers and still loses out.

On a side note the people asked for 100k loan from her for the same percentage. I was wondering why would she risk losing the partnership over 25k when she is most likely to get a return on ( the cake business she described selling over 100k in product monthly) around the first year.

People who say TEC guy was a dick -- remember that they record like an hour of negotiation and splice together highlights for TV. The Sharks were offering him ludicrous deals and insulting him many times for segmenting his businesses for the show (which, as shown earlier, was a hugely +EV move for a number of reasons). I would expect anyone would get mad at that treatment after a significant period of time. Throw in Cuban being very aggressive and condescending on the patent issue, and what do you expect? They probably edited together his most flustered, angry moments to construct the narrative you saw on TV. And you bought into it. "What a jerk, that TEC guy!" "Wow what a dick I'd hate to work with him!"

It's TV. Judging a person's real character from a constructed, heavily edited narrative is childish and stupid.

The advertising that the tech guy got would probably outweigh the potential downside. It really is amazing when you hear about how businesses that have appeared on there has changed.

As for the sharks and the people that go on there,in the wise words of Mr O'Leary 'It is all about the money 100% of the time'.

People would do well to remember that.

I think that couple was very transparent about the fact they would not walk away if they did not get 100k. It was an amateurish attempt at getting a better deal and Barbara knew they were willing to go on her terms.

The shark has to think they are going to walk away to be willing to increase an offer.

Tec guy made for good tv. He came across like a dick (editing maybe) but it was nice to see someone on the show that didn't really need the sharks. As previously mentioned, the sharks give some ridiculous valuations in their offers and it's nice to see them in a spot where they don't have way the best of it. Their ego doesn't seem to enjoy it though :-)

whats the name of the tecs guy company? havent aired in my country yet so i wanna search for the video in internet... thanks

yeah most of the presenters suck at negotiating and fairly often try to bring up some sob story as a justification for why the sharks should invest. i can see why there would be some selection bias towards those types of participants since the producers probably think that makes for good tv.

When you sell something, you need to always be presenting on how it will improve the life of the person you are selling to. No one really cares (especially not the sharks) if their investment will bail you out of your financial crunch or if it will put food in the mouths of your children. If you are selling to someone, only mention how investing in your company will make them an excellent return on their money and how quickly this will happen.

I'm shocked that so many people who have actually gotten a business to a good position don't even know the BASIC rules of selling. It's a business negotiation and not a plea for charity.

Saying that you need this investment because you and your wife/husband are both without a job and have 2 kids to feed at home actually lowers your bargaining power.

I might sound insensitive (I DEFINITELY sound insensitive) but every time I see the sharks ask a person flat out: "Why should I invest in your company?" and the person says because they just lost their other real job and really need this money right now, I burst out laughing because I know that any girl scout selling cookies would have given a better answer than that!

Agreed, but generally speaking ABC is going to pick the "feel good" story where they know the person is desperate. Desperate people almost always come off desperate, regardless of how hard they try not to act desperate.

Producers may also be asking them to play that "personal side of the story" up.

He could have at least countered. He had no interest in it. But maybe they edited that out.

Thought this was a pretty good summary for what the sharks (and all VC investors) are generally looking for:
http://www.gobignetwork.com/learn/wh...rs-looking-for

1) Shark's expertise/network/portfolio is aligned with the business
2) Large, scalable market (huge potential returns to counteract all the failures)
3) Entrepreneur has a sustainable competitive advantage
4) Social proof - other sharks show interest, deal with a large retailer, etc
5) Is the entrepreneur truly committed? What have they been able to accomplish on their own?

TEC guy talks about his experience on Shark Tank, how he was portrayed, etc along with a running commentary as the whole episode plays in the background. 80 minutes long so I doubt anyone watches the whole thing, but some of it's interesting.

RE: the topic that most debate here has been about -- why he only presented TEC and not Scottevest (the retail portion) -- he confirms he stayed away from letting them negotiate for Scottevest because of the 2% equity interest the producers would get. Also notes he originally applied to pitch Scottevest because it's the main company and he wanted the exposure for that, but changed to pitching TEC because he doesn't really need investment for Scottevest but would like it for TEC. Mentions that Cuban saying his business was built on a "dumbass patent" is what set him off and completely changed his demeanor for the duration.

Watching the first 5 minutes and then starting again from the 27-28 minute mark will capture most of the good stuff.

http://www.youtube.com/watch?v=WheCO4RgMGI

I could see where TEC guy's patent would be worth mega-bucks in the future. Every day technology becomes more and more integrated with everything we do. And I could easily see a future where wires in clothes becomes the everyday standard. So if he gets a cut of every garment with a wire in it he could make an assload of money off that patent alone.

And I understand why Cuban lashed out at TEC Guy. Cuban comes from the tech industry and the biggest problem in the tech industry right now is the horrible patent laws that enable people who don't even have valid patents to sue the living daylights out of tech companies. It's so bad that big companies are spending billions and billions just to acquire patents to try to protect themselves from these "patent trolls". If you have an hour to kill this is a fascinating listen on these trolls. And you'll understand why Cuban would automatically hate anyone with a patent. http://www.thisamericanlife.org/radi...patents-attack

Kind of funny how in one breath he says when he realized the sharks weren't interested in investing, he would focus on the performance and then seconds later he says everyone that really knows him knows that he is always transparent and cannot lie or act lol...

I would love to see Nucky Thompson as one of the sharks...

"your idea sucks, but here's $10,000"

this is exactly why he did things the way he did imo.

edit-i see this was confirmed. also without watching his commentary movie i thought it was ridic obv that they gave him an awful edit. he still obv should not have lost his cool and gave them the opportunity though.

childhood friends with one of the entrepreneurs tonight (the skin cream one). be interested to get your guys' thoughts on it.

zomg, where are the spoiler tags?

What happens if someone in the TEC guy's position, comes on the show not offering the company just the patent, then gets "talked into" selling his company but does not close a deal? Is he still liable for that 2%?

that's a great concern that I had as well....he was able to get an offer from the sharks (even though it was an intentional slap in the face)

seems like an easy work around for any company that has a patent....only offer the patent and then entertain offers on the main business without ABC taking vig