Canadian entrepreneurs are well familiar with CBC’s reality TV series Dragon’s Den, which features entrepreneurs pitching their businesses to five investors (Dragons) in the hope of receiving funding in exchange for equity. This summer, ABC has launched an American version of the show called Shark Tank, which is being produced by Mark Burnett. Mark is the king of reality TV, having produced hit shows such as Survivor, The Apprentice, and Are You Smarter than a Fifth Grader?
Both shows feature five investors each, and two of the investors are Canadians that appear on both shows, Robert Herjavec and Kevin O’Leary.
Having watched the first four episodes of Shark Tank, there are definitely some differences in the two versions. Here are my thoughts:
1. In-depth Personal Backgrounds – Dragon’s Den seems to cut straight to the chase – they showcase the entrepreneur and his or her pitch, without too much background. On the other hand, nearly all of the featured entrepreneurs on Shark Tank are profiled in a 60-90 second segment before the pitch even begins. The segments often feature shots of the entrepreneur’s hometown and family. Many of the profiles are “sob stories” that talk about the hardships that the person has overcome.
Thoughts: I am watching the show for the business stories and I care less about the personal background unless it’s actually relevant to the business case. All of these featurettes seem take time away from the actual pitches, and leads to Dragon’s Den having more entrepreneurs showcased in the hour-long episodes. I’d much rather watch more entrepreneurs per hour on the Dragon’s Den version.
2. Crazy Valuations – From the first four episodes of Shark Tank, it seems like a common valuation of a company is in the order of 10x or 20x the previous year’s sales. That’s crazy! I’m not sure why every entrepreneur is valuing their company so high, but as someone who is looking at the pitches objectively, these demands are ridiculous! From my memory, the Dragon’s Den valuations were a lot more reasonable, but were still often overvalued.
Thoughts: Crazy valuations are a major turn off for an entrepreneurial viewer. It almost makes me lose respect for the company and individual pitching. I hope to see less of these in the future on both shows!
3. Who is making the deals? – In the Canadian version, it seemed like all the Dragons were willing to make their fair share of deals. Each of the investors was willing to invest in companies that weren’t aligned with their previous backgrounds, and all the Dragons were actively involved in securing deals throughout the episodes. However, the Shark Tank is a totally different story. Robert and Kevin (the two Canadians) seem to be the only Sharks that are making any deals at all! Kevin Harrington, the infomercial king, will only invest in a company if he can turn the product into an infomercial. Daymond John, the founder of the FUBU clothing line, will only invest in clothing or retail businesses. Barbara Corcoran is a bit better at offering deals, but she just appears to be sympathetic to female entrepreneurs and prefer to make deals with them. At the end of the day, Robert and Kevin offer and make twice as many deals as the other Sharks!
Thoughts: I want to see different deals and different investors – not just Kevin and Robert. (Although I do have a very soft spot for Robert!)
4. Controlling Share -Almost every deal or offer that ends up getting made on the Shark Tank has a controlling share for the Sharks. It seems like there are a lot more controlling stakes being offered and given up then on the Dragon’s Den version. 51% offers have been common in the first four episodes. Why is this the case? It could be because they simply don’t trust the entrepreneurs as much with important company decisions. Another reason could be the fact that the American entrepreneurs came to the show with such high valuations that the only way a fair deal could be reached was by giving the Sharks a controlling stake.
Thoughts: No entrepreneur wants to give up a controlling stake in their business! I want to see less of that on Shark Tank!
In the meantime, it looks like Dragon’s Den is kicking butt!
Want to see these shows? Shark Tank is airing new episodes on ABC on Sundays at 9pm. Dragon’s Den airs on Wednesdays at 8pm with new shows beginning on September 30th. 20 new shows have been planned for the next season of Dragon’s Den.