From ghosting to lying about numbers… India’s Sharks shared some lesser-known stories of what happens after a deal is finalised on Shark Tank India.
📹: Finance With Sharan
📹: Finance With Sharan
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00:00There are many founders who have ghosted me.
00:02You know, once they air, they get better deals outside.
00:05So then they prefer to go with those.
00:07It feels unfair.
00:08The numbers they quoted at the time, they're completely off.
00:11This third season, there is a deal which is already shown.
00:14That guy is not responding already.
00:16What people don't realize is that they see us giving these offers
00:19and then they say, you didn't make the deal.
00:21But what they don't realize is that there is a lot of integrity issues.
00:25A lot of people are very clueless when it comes to the count of investments.
00:33Because what they don't realize is when we start doing a due diligence,
00:36there are multiple things that there's literally a lack of integrity on the part of founders.
00:42There are many founders who have ghosted me.
00:44There are many founders where when we do the due diligence,
00:47the numbers they quoted at the time, right from a GC to a sales,
00:51they're completely off, not just marginally, but substantially off.
00:54There are a lot of founders who have two companies.
00:56And as a finance person, you know that the biggest governance issue is related party transactions.
01:00And then when we tell them, hey, you didn't reveal the fact that you're CEO of two companies.
01:04Can you merge them? They refuse to do that.
01:06So what people don't realize is that they see us giving these offers and then they say, you didn't make the deal.
01:12But what they don't realize is that there is a lot of integrity issues.
01:15I just mentioned three examples, which is why the count goes down substantially.
01:21So I think this is one thing that everyone who's following Shark Tank must be aware of.
01:26There is a margin between what's revealed at the tank versus what really comes out in the due diligence.
01:30You know, in this third season, in two weeks, there is a deal which is already shown.
01:36That guy is not responding already.
01:39What also happens, which is why some of them don't go through is that, you know, once they air, they get better deals outside.
01:45So then they prefer to go with those. And it's at the end of the day,
01:50I understand where an entrepreneur is coming from, where they're optimizing for valuation.
01:54It feels unfair, but you have to. I mean, that's the rules of the game.
01:58What are the mistakes that you've seen your investor founders, investee founders making, which you help them solve?
02:04I think a lot of times at Shark Tank, we invest in a few companies that are in the 15 to 20 lakh phase.
02:11And they feel that they have product market fit, but they don't have.
02:16And how would you know if a brand has product market fit or not?
02:19So if you have product market fit, then, you know, when you as a shark unlock certain marketplaces for them and quick commerce, for instance,
02:29the products should fly without investing your performance marketing.
02:33If you have product market fit, my sense is in the sub hundred crore zone,
02:37your performance marketing costs should be less than 10 percent of revenue, just as a thumb rule.
02:42So first thing I've done with a lot of founders, even after they've done Shark Tank,
02:45what happens is that when their pitch airs, they get a lot of orders.
02:49And then we help them with, you know, putting them on Swiggy, Zepto. Zepto is our neighbor in the building.
02:55So I'm always putting them on Zepto. And then we measure. And they do, many of them have like 10x jump.
03:01And then the first thing I do is that, you know, a lot of them are women consumers.
03:05I tell them, come to my office. There are 100 women here. Test your product. Get real feedback.
03:11What is the problem? If your consumer is somebody else, go read comments.
03:15But, you know, go back to the drawing board because you don't have it.