My wife now watches Shark Tank with me and is becoming rather shrewd in evaluating businesses. We both hate the product placements.
Speaking of business model that drives away customers. Did you know you give up 5% of your business to appear on shark tank because of the exposure? With or without the deal. That is why they do the follow-ups on companies that did or did not accept a deal. It's good for the shows owners.
Oh hell yeah. I'd give up 5% for the exposure (under the right circumstances and with the right business/product) the marketing alone is worth it.
I think this process skews the risk/reward relationship found in typical investments because the companies they invest in get 3-10 minutes of advertising. I'm sometimes surprised they don't do more deals at lower valuations on that alone.
Wow. I've watched the show with my wife and had been assuming that no one should take a deal they weren't really happy with. Better to walk out with no deal because even then you've gotten free advice from some shrewd, experienced people. But free ain't free, it seems.
Did you know that YC takes 7% of your business, whether or not you get funded a demo day? Shark Tank may be a better deal. Or not. But it is ridiculous to argue that based on the fee for a prime time infomercial.
Well, apart having personal advice on tap from a range of experts, the fact that on demo day your idea will be in front of the best VC groups in SV, access to YC alumni for help and advice, I can't imagine why people would give up 7% of their nascent startup either!
(this is sarcasm btw.)
More seriously: you're giving up 6-7% of your company in return for a whole swathe of things that are very likely to increase your chances of succeeding significantly. Most people don't have ready access to the kind of personal networks that YC offers: the combination of that access, plus the social proof of having the YC imprinteur massively increases the likelihood of success for many, many startups.
And I'm saying this as someone who's very unlikely to ever apply to YC, but even I can see the benefits in applying, as do many others who choose to go to YC even if they don't in fact need the money: the fringe benefits are worth far, far more than the cash.
His comment wasn't argumentative or anti-Shark Tank.
The owners are well aware of both situations, and it's their right to make the choice. For some businesses, that 5% is well worth the prime time informercial. And I imagine everyone who's received a YC offer has accepted as well.