As an entrepreneur looking to grow your business, Shark Tank may seem like an appealing opportunity.

Getting investments and advice from high-profile investors like Mark Cuban, Barbara Corcoran, Lori Greiner, and Daymond John is an exciting prospect. However, going on Shark Tank requires hard work, perseverance, and often compromise.

Is putting in the blood, sweat, and tears to appear on the show ultimately worthwhile for entrepreneurs?

Let’s dive in and analyze the pros, cons, and alternatives to weigh if Shark Tank is worth it.

The Allure of Shark Tank

At first glance, Shark Tank looks like an entrepreneur’s dream come true. Think about it: you get to pitch your business to five millionaires and billionaires who could invest in your company. If a Shark likes your idea, you could walk away with life-changing funding and high-level mentorship.

Appearing on Shark Tank provides publicity most startups only dream about. Millions of people watch the show, so if you make a deal, you’ll get incredible brand exposure. Even if you don’t land an investment, you still get air time to promote your product to the masses.

Beyond money and publicity, affiliation with a renowned Shark lends you credibility. People view Shark Tank companies as legitimate since the Sharks performed due diligence before investing. The “As Seen on Shark Tank” label becomes a seal of approval that can set you apart.

With these potential perks, it’s obvious why Shark Tank is alluring to entrepreneurs. Let’s now examine the nitty-gritty of what the process entails.

The Arduous Shark Tank Application Process

Getting onto Shark Tank is extremely competitive. During the show’s 10+ year run, over 50,000 entrepreneurs have applied. Yet, only a tiny fraction get chosen to pitch the Sharks.

The application itself takes hours to complete. You must submit a 90-second video, write essays covering topics like your background and business financials, and compile supporting documents. Since the producers want quality pitches, the application has many hoops to jump through.

If you do make it past the initial application screening, there’s still a long road ahead. You’ll likely have multiple interview calls with show producers to see if you’re a good fit. Then you’ll put together a 10-15 minute pitch and presentation. The producers will give feedback on how to improve it, so you’ll repeat the process multiple times until it’s polished.

All this occurs over several months. If you get through these steps and pass background checks, you might finally get a tap on the shoulder to be on the show. Out of over 50,000 applications, only around 160 entrepreneurs make it onto Shark Tank each season.

So realistically, you have less than a 0.5% chance of ever pitching the Sharks. That’s a tremendous investment of time for long odds.

The Costs and Risks of Appearing on Shark Tank

If you are fortunate enough to make it onto Shark Tank, the costs continue piling up. While the show covers your travel expenses, you have to pay for things like:

• Professional high-definition footage of your product to use in your pitch segment. This can cost $5,000 – $15,000.
• Providing numerous free samples and prototypes of your product to producers and Sharks.
• Wardrobe, hair, and makeup to look polished on national TV.
• Legal fees to review any potential deal terms. Lawyers usually charge several thousand dollars.
• Manufacturing enough inventory to meet sudden spikes in demand if you make a deal. This can mean hundreds of thousands in upfront production costs.

These expenses quickly add up to a significant upfront investment. And this is before considering the massive time commitment of preparing for the pitch and filming the episode.

Beyond the monetary and time costs, you also risk national embarrassment if your pitch bombs. Viewers relish cringing at awkward presentations and nasty Shark critiques. Consider the social media fallout and reputational damage if you completely implode on stage.

While the potential rewards of an investment might outweigh the costs and risks, you need to seriously consider whether it’s worth emptying your bank account for a slim shot at success.

Negotiating with the Sharks

Let’s say your pitch goes perfectly. The Sharks love your product and multiple ones offer you a deal. Don’t pop the champagne just yet. Now you have to actually negotiate an investment that works for your business.

The Sharks got wealthy for a reason – they make very investor-friendly deals. They’ll try to give you less money than you asked for in exchange for a huge chunk of equity. The deals you see on TV are highly edited – some entrepreneurs get absolutely shredded during negotiations.

For example, if you ask for $100k for 10% equity in your company, a Shark may counteroffer $100k for 50%. That’s an extreme dilution of your ownership stake.

You need to weigh if it’s worth sacrificing potential future profits for an immediate cash infusion. Keep in mind you also might get saddled with burdensome terms around board seats, future fundraising, and control.

While the Sharks can provide invaluable advice, they primarily invest for financial returns versus emotional reasons. Make sure to protect yourself and your vision for the company above all else.

Shark Tank Success Stories

Despite the long odds and tough negotiations, some entrepreneurs do thrive after appearing on Shark Tank. Let’s look at a few of the show’s biggest success stories:

Scrub Daddy – This smiley sponge company landed a $200k investment from Lori Greiner in Season 4. Scrub Daddy quickly became QVC’s highest-grossing product in its history, raking in over $50 million in sales.

Tipsy Elves – Robert Herjavec invested $100k into this ugly Christmas sweater company in Season 4. Since its appearance, Tipsy Elves generated over $70 million in sales.

Bombas – The sock startup landed a $200k investment from Daymond John in Season 6. The company has donated over 50 million items to homeless shelters and generates over $100 million in annual revenue.

Lalo – Mark Cuban invested $500k into this baby and toddler product business in Season 11. The company is now carried in major retailers like BuyBuy Baby and is expecting $20 million in sales.

These examples demonstrate how Shark Tank can take a business to new heights. However, for every success story, there are many more entrepreneurs who didn’t reach these lofty levels. Out of over 400 investments made on the show, only about 33% are considered successful using common metrics like revenue growth.

So while it’s certainly possible to thrive after Shark Tank, the odds are still not necessarily in your favor. The ones who do best usually get investments from Sharks who are influential in their particular industry or have deep operating experience to offer.

Shark Tank Alternatives to Consider

Given the long application process, high costs, and risky outcomes, Shark Tank may not be the ideal path forward for your startup. Luckily, there are other alternatives to consider that can get you capital and publicity:

Crowdfunding – Platforms like Kickstarter and Indiegogo let you raise money directly from your customers. You can validate demand, get pre-orders, and gain brand ambassadors.

Angel Investors – Wealthy individuals provide funding early on in exchange for equity. Experienced angels often provide hands-on support beyond just capital.

Business Plan Competitions – Pitch events hosted by universities and accelerators offer prize money for top startup ideas. It’s great practice and networking.

Small Business Loans/Grants – Government and nonprofit programs provide access to funding for startups meeting certain criteria.

Accelerators/Incubators – These programs give you mentorship, resources, and exposure to investors for a small amount of equity.

Direct Public Offerings – Sell stock directly to your customers to raise funds and build loyalty. Friends and family can get in early too.

As you can see, Shark Tank is far from your only option to get funding and attention. Depending on your startup stage and needs, these alternatives can provide capital without diluting your ownership or sacrificing control. They also come without the risk of mass rejection on national television.

Weighing the pros and cons, Shark Tank may make the most sense for businesses that would directly benefit from affiliation with a famous Shark. The publicity and endorsements can be unmatched. Just know that the odds are stacked against you, and you need to be comfortable with the costs and negotiation process. Otherwise, other funding methods may be more suitable and come with less risk.

Final Takeaways on Shark Tank

Shark Tank provides incredible opportunities to rapidly scale your business with unparalleled publicity. However, the application process is grueling, the costs are high, and the deals you make require sacrificing ownership stakes and control.

While the prospect of investment from a celebrity Shark is alluring, carefully consider if it’s the best strategic move for your startup right now. The judges on Shark Tank think like investors looking for returns first and foremost. Make sure your vision aligns with the Sharks before jumping in.

With long odds and tough negotiations, Shark Tank is certainly not a golden ticket or guaranteed success. But for the right entrepreneur with a promising business, the reward may justify the risk and hard work. Evaluate all your options, be prepared to compromise, and analyze if the costs are worthwhile.

If you believe the unique benefits of Shark Tank outweigh the alternatives for your startup, then it may be worth rolling the dice on TV’s biggest business reality show. Just go in with eyes wide open, be ready to defend your valuation and vision, and bask in the air time. With thorough preparation, perseverance, and a bit of luck, you may just walk away with a life-changing deal.