Simple Research Study – Shark Tank Companies

Shark Tank Logo

Introduction

Background

Shark Tank is an ABC show where entrepreneurs around the United States can pitch their ideas to billionaires and seek partnership with them. The show started in Japan in 2009, and has gained traction over the years to what it is today. For this study, I thought it would be interesting to analyze the six seasons of Shark Tank, which consists of 122 episodes and 495 companies. I wanted to see which types of companies obtained deals most frequently, and find any other trends among the deals made. Let’s explore from the data what we can find.

Data

The data was collected from Shark Analytics, who was able to aggregate the information into one relative area.

Date Pulled: 11/28/2017 10:30pm

Total Seasons: 6

Total Episodes: 122

Total Companies on the Show: 495

Raw Data: Raw Data

Results

Deal or No Deal

First, I analyzed how many companies received a deal with the sharks, and how many did not receive a deal. Of the 495 companies, 251 (50%) received a deal, while 244 (50%) did not receive a deal. From an outsider looking in, I don’t think that it was an accident that 50% received a deal and 50% did not receive a deal. Why? If you were to watch a show where the majority did not receive a deal, you would get bored quite fast. The fun part of the show is watching the sharks negotiate back and forth between the companies.

Asking Price

On Shark Tank, the company will ask for a sum of money in exchange for a percentage stake in the company. I thought it would be interesting to run a correlation between the exchange of a percentage value, and whether or not they got a deal. The value was -0.09, which tells us that there is no correlation with how much of a stake you give the sharks, and whether they make a deal with you or not.

Additionally, I looked at the asking price from the sharks, and ran a correlation against whether or not they got a deal. The value was -0.07, which tells us that there is no correlation with how much you ask for from the sharks and whether they make a deal with you or not.

Asking Price vs Stake in Company

The next place to look is if there is any correlation between the asking price from the companies, and the percentage stake in the company that the entrepreneurs are willing to give up. The correlation coefficient is -0.009, or in other words, there is no correlation with the asking price and the percent stake in the company.

While there isn’t a statistical correlation between the asking price and the deal, below we can see there is a steep curve with the asking price and the stake in the company. For the companies that ask for many millions of dollars, the stake in the company isn’t as high. Additionally, this group, the bulk of the companies were declined the deal.

Shark Tank Companies - Asking Price vs Percent Stake

Company Valuation

Asking price and exchange percentage would seem to be decent factors when it comes to making a deal with the sharks. What about the valuation? Is there a correlation between a higher valuation and the number of deals made? The correlation is -0.06, or in other words, there isn’t any correlation between the valuation and if the company will receive a deal with a shark or not.

The distribution of the company valuations can be seen in the graph below. The bulk of the companies on Shark Tank are under 5 million dollars in valuation.

Shark Tank Companies Valuation

Largest Count of Businesses by Industry

Below, I’ve compiled a list of the 12 most reoccurring industries which appear on Shark Tank. Food and Novelties seem to be large topics for the sharks. From the table below, we can see that the sharks have created more deals with companies that presented in the “Storage and Cleaning Products” industry.

Industry Total Companies Percent with Deal
Specialty Food 62 55%
Novelties 35 46%
Baby and Child Care 24 63%
Online Services 22 45%
Personal Care and Cosmetics 20 40%
Toys and Games 19 53%
Storage and Cleaning Products 17 77%
Outdoor Recreation 16 63%
Electronics 14 43%
Consumer Services 13 23%
Entertainment 13 31%
Pet Products 13 46%

Conclusion

From this micro-research study, we were able to identify interesting points that may help us define what type of business to create and when is a good time to present your company to investors. Other findings include:

  • 50% received a deal and 50% did not
  • There wasn’t any correlation with
    • How much of a stake you give the sharks and whether they make a deal with you or not
    • How much you ask for from the sharks and whether they make a deal with you or not
    • The asking price and the percent stake in the company
  • The sharks have created more deals with companies that presented in the “Storage and Cleaning Products” industry

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