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Sharkonomics — How Business Angels Evaluate Pitches
When does a ‘shark’ consider a business ‘investable’? Angel investing 101 according to TV show Shark Tank…
I’ve been sick, lying in bed and binge watching Shark Tank. It’s a hit reality show in the US where business founders pitch for investments from some of America’s most famous angel investors and venture capitalists.
Well… I guess out of every misfortune there is a silver lining. For me I translated this unproductive period into a useful one by condensing what I’ve learnt from the show into this story about how business angels evaluate investments (according to Mark Cuban and his fellow ‘sharks’ anyway).
Because it is a TV show, some degree of dramatization and showmanship is to be expected from the staging and editing, as well as the way the sharks critic the pitches. But if you watch enough episodes, you will come to realize there is a consistent and logical methodology to the evaluation of every pitch.
That methodology can be summarized into the following three aspects:
The business
The very first thing that the sharks would ask any founder is their sales. In Shark Tank there’s been a variety of crazy ideas — elf sweaters, construction machinery…
