Shark or Dolphin, Ashneer Grover Speaks Out on Growing Founder-Investor Rift on Shark Tank India
Tensions Rise as Founders and Sharks Clash Over Deal Closures
27 June 2023
Shark Tank India faces tensions as founders and sharks clash over deal closures, renegotiations, and changing valuations.
Founders criticize sharks for reassessing deals after the initial offer and abandoning them, putting their businesses at risk of closure.
Delayed fund disbursements and unrealistic timelines for deal closures add to the frustrations of founders, who argue for funds to be available before episodes air.
The popular television show Shark Tank India has witnessed a growing divide between the "sharks" (judges) and the founders who secure deals. The show's concept revolves around entrepreneurs pitching their ideas to a panel of investors, known as sharks, hoping to obtain funding for their ventures. However, recent episodes have exposed deep-rooted issues surrounding deal closures, renegotiation of terms, and changing valuations, leading to simmering tensions between the sharks and the founders.
The Expectation of Swift Decisions:
The controversy surrounding the show escalated when Ashneer Grover, the founder of BharatPe and a shark in the first season, voiced his frustration. Grover argued that sharks should live up to their name by making quick decisions, allowing no time for the "fish" (the pitcher) to react. He claimed that sharks who delay decisions should be referred to as dolphins instead, questioning the effectiveness of their role.
Deal Closures and Renegotiations:
Several founders, including Rahul from season two, have shared stories of fundamental disagreements and wavering commitments from the sharks. Rahul disclosed that there were disputes with Anupam Mittal, one of the sharks and the founder of Shaadi.com, resulting in doubts about the viability of his business. This experience is not unique, as many founders have reported the sharks reassessing deals after the initial offer, and some even abandoning the founders altogether.
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Frustrations and Business Impact:
The growing divide between sharks and founders has raised concerns about the detrimental effects on entrepreneurs' businesses. With season three on the horizon, founders claim that the actions of the sharks have pushed their businesses to the brink of closure. Anupam Mittal defended the sharks, stating they provide funding to founders who might otherwise struggle to secure capital outside the show. He drew parallels with Shark Tank US and highlighted that completion rates for deals on the Indian version were relatively higher.
Delayed Fund Disbursements:
Despite significant online interest generated by aired episodes, the majority of deals still need to be solved, and founders have reported not receiving their funds. Mittal argues that a realistic assessment of the completed-deal-to-handshake (CDH) ratio should be done six months after the season concludes. However, Ashneer Grover and other founders criticize the one-year timeline, considering it unrealistic for early-stage businesses. They argue that funds committed during the show should be available to founders before the episodes air, enabling them to capitalize on increased demand.
Renegotiations and Rejection:
Instances like Mohit's story highlight the frustrations faced by founders. Mohit experienced a surge in demand and revenue following the show but ultimately faced disappointment. During a follow-up meeting, he witnessed the shark attempting to renegotiate the valuation, a move he couldn't accept due to ongoing discussions with other investors. Subsequently, the shark went silent, leaving Mohit's company on the verge of closure. Other founders also voiced concerns about the sharks using due diligence issues as a pretext to drop deals, feeling rejected after the show's initial enthusiasm.