Shark Tank is a reality television show where entrepreneurs pitch their business models to a panel of investors. It was conceived in the US and first aired in that country.
Mittal made his comments in the wake of multiple allegations by some contestants on Shark Tank India that the investors had resorted to delaying tactics when it came to actually putting in money.
ET spoke to some of these contestants, who say they had received soft commitments on the show in September 2022. “Normally, it takes 2-3 months to finalise a fundraising transaction, but Sharks (investors) purposely drag things out (after the episode is shot) until the pitch airs. They want additional paperwork, their legal team won’t return your calls, and their team members will provide lame excuses like they are on vacation or the new year has arrived,” one such contestant had told ET.
While some founders that ET spoke to have said that they continue to anticipate a final word from the investors on the promised funding, some have also moved on, writing off the show as a marketing opportunity.
“Most of the businesses on the Tank are at a very early stage. Many are proprietorships, which first need to be registered as companies. The founders have never seen an SHA [shareholder agreement], nor do they have readily available numbers. Our teams hand-hold them through many of these issues,” Mittal explained in his LinkedIn post to explain the delay.
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He said that about 60% of the deals committed on air at Shark Tank US go through, whereas Shark Tank India season 1, which aired last year, saw the completion of two-thirds (66%) of the deals. The Season 2 completion ratio, he added, will be available in August.
“Sometimes deals don’t go through because the founder changes their mind, the company fails legal, financial and/or tax diligence or the founders do not meet the obligations agreed to while accepting a conditional deal,” he said.
The show has seen about 200,000 entries and 388 pitches, with about 200 offers worth about Rs 150 crore doled out so far, Mittal added.
Separately, in a statement to ET, Shark Tank judge Aman Gupta, co-founder of consumer electronics brand Boat, said he, too, is in the process of conducting due diligence for season two. “Post the airing of the episode, I often receive requests from founders who don’t want our investments or to renegotiate the terms offered in the tank or maybe came for marketing only. As an entrepreneur myself, I always support the founders and allow them to make the best decisions for their company. However, I reserve the right to refuse if there are any issues found during the due diligence process,” he said.