Much has been made about the so-called “Shark Tank effect” for many entrepreneurs who appear on the program. As Entrepreneur discussed this summer, some pitchers see a spike in website traffic and a surge in sales as a result of the free advertising. But that spike is sometimes short-lived, and one shark questions whether the show overall has given a false impression of what steps to take in order to run a successful business.
In a new Inc. magazine profile, Barbara Corcoran laments the impression Shark Tank often gives about building a business and seeking investment. The investor, who built a real estate company in New York over two decades before selling it for $66 million in 2001, said the Shark Tank audience does not always get the message that taking on partners is usually not the best option for a business.
“‘Shark Tank’s’ made everybody believe that if they have one good idea, they can get rich overnight. It’s made people believe that the pitch is the business. All the pitch is is the first date. It is the building of the business that is the marriage. Also, it’s made people believe that the right way to fund any business is through investors, by giving away equity, which makes absolutely no sense to 99 percent of the businesses out there.”
It is that willingness — or not — to give up equity that is often a heads up to Corcoran about who will be a successful entrepreneur. Corcoran has said in the past, according to an Associated Press report, that the best entrepreneurs solicit her advice and then don’t take it. Similarly, as she told Inc., those with great confidence in their company will have hesitation about giving up stake in the business even after landing a Shark Tank deal. When time comes to finalize the agreement, it is a bit of a challenge.
“Those deals are hard to do, because the entrepreneur has total confidence they’re going to succeed. They sometimes don’t know how, but they know they’re going to. They’re very reluctant to give up the stock they promised on ‘Shark Tank.’ The less capable entrepreneurs chase you like crazy to try to get the money and sell their stock.”
But once the deal is done, those entrepreneurs tend to be the most successful. Corcoran famously has pictures of all those in whom she’s invested in her office. Those whose pictures are turned upside down she does not foresee building a large company. Those whose pictures are right side up are on the right track.
Corcoran also has issues with the sudden fame she’s received as a member of the Shark Tank panel. While she was well known in her hometown of New York before she became a television personality, the 67-year-old had never achieved fame outside of her city until signing on with Shark Tank eight years ago as one of the show’s original investors. She told Inc. she is not crazy about the newfound attention, and it is not commensurate with the amount of work she puts in — at least not compared to when she was building The Corcoran Group.
“What you do [for ‘Shark Tank’] is, you show up and do the best you can. With the Corcoran Group, I didn’t just show up. I killed myself. It seems right that I would’ve been really famous for the Corcoran Group and just a little famous for having gotten the seat I got.”
As reported this October by the Inquisitr, in early press for Season 8 of Shark Tank, Corcoran revealed there is one pitch that shocked her so much she stayed silent through much of it. Given that reaction, it’s probably safe to assume Corcoran did not invest in the company, although she, of course, did not reveal the outcome.
Shark Tank airs Friday nights on ABC.
[Featured Image by Jamie McCarthy/Getty Images]