dragons den vs shark tank

Kevin O'Leary On The Differences Betwixt <I>Dragons' Den</I> and <I>Shark Tank</I>

The season seven finale of Dragons' Den on CBC gave viewers a glimpse into the personal lives of the dragons and what making it as an entrepreneur can look like. For Anatomy of a Deal's end-of-season wrap-upward, Mary Teresa Bitti caught up with Kevin O'Leary, who is both a dragon and a shark on ABC's Shark Tank , the Den's U.S. counterpart. She asked Mr. O'Leary about his experience on both shows and how the pitches compare. As a dragon Mr. O'Leary fabricated 16 on-air deals this flavor and he made 15 on Shark Tank, which is in the midst of its 4th flavor. The following is an edited version of that conversation.

Q 7 seasons in on Dragons' Den, how have the deals evolved?

A Most entrepreneurs fall into two categories: those with ideas that haven't been funded and are looking for seed capital and companies or teams or products that are already in the market that have figured out that Dragons' Den is a launch platform for accelerating sales. For the past couple of seasons we have seen a tremendous amount of opportunities that are mature companies in their third and quaternary years across a wide range of consumer goods and products and services. I think the Canadian entrepreneur has figured out what yous can. The show is like an infomercial on steroids. That's what's made it more than interesting for the states every bit investors because instead of but taking the high-risk road of startups — which we still practise because it'southward exciting — you can get a actually stable cash flow from helping a visitor accelerate its sales from $one-million a year to $5-1000000.

Q What does that mean in terms of the due diligence procedure?

A The endmost process is long and backbreaking because when you are dealing with a real company with real sales, structuring the deal gets complicated. That'south what's happening. It's not only about throwing in $50,000 and getting some common shares. Yous might say, I'll give y'all $250,000 of which $200,000 is disinterestedness and $50,000 is the beginning of a bank line. That'southward more of what I'thou doing. Two deals I closed final week were 3 months in the making and both involved equity and credit lines.

Q What phase are the pitches at coming to you via Shark Tank?

A Nosotros have a lot of product specific ideas, not necessarily companies. One of the reasons that happened is the close alignment the show has evolved into with QVC and other domicile shopping channels. It'south well orchestrated and choreographed so that products featured on the show are available on these shopping channels immediately after the episode airs. Shark Tank is also using social media and live tweeting during the show with the Sharks describing what is happening on the New York feed at nine p.grand. so that by the time information technology airs in Chicago, the evidence is already trending on Twitter.

Q Is in that location a difference in the quality of pitches you're seeing from Canadian and U.S. entrepreneurs?

A One is not better than the other — the platform is different. In the U.Southward. the producers spend a tremendous corporeality of time excavation into the backgrounds of the people presenting, so as a shark I get a pre-pack of where they came from, history, what school they went to. I know more about them as individuals. I'g not saying that's good or bad. On Dragons' Den, nosotros focus more on what happens in the Den and the deals. The other difference is in Canada nosotros essentially accept three sectors: financial services, bolt and energy, and much of what we see on Dragons' Den fit into ane of those iii in some way. In the U.South., there are x sectors: biotech, medical services, pharmaceutical — so you become more multifariousness. But that'due south just the nature of our economies. The opportunity for the investor is equal between both markets. There is no lack of good ideas coming out of Canada and many of the Dragons' Den deals — I would say two-thirds of them — are looking for leverage and capital to enter the U.S. market place and extend their brand. That makes it even more interesting when you want to accelerate a company that has only sold its products in Canada.

Q What's your biggest deal so far?

A I retrieve it'southward Talbott Teas from Shark Tank. Information technology's certainly the only one where a public company bought it. Oprah had included the teas in ane of her favourite-things episodes, which got the entrepreneurs some huge orders and they needed money to fill them. I bought 35% of the company for $250,000 and within 90 days information technology was acquired by Jamba Juice. That is my highest ROI to date because information technology was an investment for simply 90 days. In Canada, my near successful deal in terms of a brand build is Dig It gloves. In nigh cases, yous have to exist in these deals for years. Those gloves are everywhere now. That's non to say every deal works. You will take failures. I put $100,000 into a company called Toygaroo with Marking Cuban. It went to naught considering of bad direction. Marker and I had to decide practise nosotros write it off or go new management? Nosotros wrote it off.