It takes a month to film some 100 pitches for TEN’s Shark Tank, of which around 50 – 65 make it into the final series.
While on-air a pitch (and hopefully an offer) will last for several minutes, like all good TV the shooting is a much longer process of around 1 – 2 hours per pitch.
According to Red Balloon founder Naomi Simson, the edit doesn’t affect the overall story of an individual pitch.
“We can ask a lot of really boring business questions: return on capital, debt / equity ratios,” she explains.
“But they have to edit it to tighten it up for TV. We’re in the business of getting great investments and the network is in the business of making great TV.”
In assessing any pitch on its financial benefits, Simson is also scrutinising her prospective partners. Sometimes a savvy business idea can come unstuck because a Shark isn’t convinced they can work with the people behind it.
“If they’re not able to listen, which is an irony given they’re pitching, they are probably not going to be coach-able and you won’t get the value out of the relationship.
“It’s not just about our money, but our ability to work with them and help them grow their businesses.
“So if they ‘know everything’ then it’s really hard to help them,” she explains.
“Life is short and there are lots of deals available to us.
“Until somebody puts their foot in it, is arrogant or elitist, or superior, we’ll love them to death. We want to see them succeed. That’s our job –to see people become successful.”
But her biggest gripe is left for those who think they know which Shark will bite.
“Don’t prejudge the Sharks. Sometimes people will come in and pigeon-hole us.
“You will see in this series we will surprise you regularly. If they come in and they only talk to Steve, there is no faster way of pissing me off,” Simson insists.
“If they negate what I have to offer, that’s not good.”
Around 81 hours a month of her time is devoted to her Shark Tank portfolio, liaising fortnightly with each business in the first year, and monthly in the second. She cites Season 2’s VegePod, which enables easy ways to grow vegetables at home, as one of her success stories. The product is now in Mitre10 stores and enjoying a 500% increase in sales.
“The manager has moved to the US and he’s getting great traction there –not that I’m allowed to have favourite children! But right now he’s doing particularly well.
“Business is long and hard. People always ask about the ‘overnight success’ but I’ve never seen one in my life. There are some businesses that are not going as they should and some that are doing incredibly well. It’s swings and roundabouts.”
Indeed not everything goes as planned. On-air HerFashionBox received a $200,000 investment from Sharks Janine Ellis and Andrew Banks but has drawn the attention of NSW Fair Trading amid allegations of underpayments to employees. It has since attracted media headlines.
“We make an offer based on what they tell us on set. In Commercial terms that’s called a term sheet,” Simson explains.
“We then go into a Due Diligence process, which means we get to look under the hood and ask a lot of questions.
“One of mine didn’t have patents but they said they did,” she notes.
“So then we make an assessment: is the business still worth what we thought it was on the show? It is our money so you can’t have us just on the basis of 1 hour.”
Simson says the HerFashionBox did not receive Shark Tank investment after Due Diligence was undertaken after the show was filmed.
“That particular business didn’t get through the first gate, after the show. Both Janine and Andrew have told that publication over and over. But if you put Shark Tank in the headline people will read it.
“Janine also offered to speak to them to say ‘This is what we found in due diligence.’
“We have our reputation. Otherwise it is people just stealing from us, and we’re not going to do it.”
So if a business which gains an on-air investment is left wanting after Due Diligence suggests otherwise, why is it still included in the final edit?
“The television producers are producing television,” Simson explains. “We’re producing commercially-successful businesses. They are actually two completely different things. They have an agreement to show the process, we have an agreement with these people to check that it is what it says it is.
“There are so many people who come on the show and think once they get the money it will be easy street. It’s not. That’s when the work really starts because you have investors wanting a return.
“The show is real and it’s really our money. But I’d never put up my finger if I didn’t think (a business) was not going to go ahead.”
Shark Tank returns tonight at 8:45pm on TEN.