Steve Baxter is a busy man and doesn’t waste time.
In a brief call to Business Insider following revelations that he spends roughly $300,000 a year on a team that does diligence on the Shark Tank startups he invests in – and less than 15% of those promised funds actually get the money – he put a large dose of reality back in the reality TV show.
“What we are doing is making an investment offer, it’s not prize money,” he said.
“Everything on Shark Tank is truthfully represented… everything they are telling you is factual and true,” Baxter says, but entrepreneurs can get flustered when they pitch.
So while there is a verbal commitment made on the show, the “Sharks” – Baxter, Janine Allis, Andrew Banks, Naomi Simson and Glen Richards – then take a deep dive on the startups behind the scene before they show the money.
Baxter’s had two successful deals result from his nine agreements on the show.
His team’s extensive due diligence means that “if it’s fast, it could take a month to settle”.
“It’s nothing at all out of the ordinary,” he said, adding but there are “a lot of things, various elements that can be untidy [in a startup]”.
Baxter’s advice is to “take all personal expenses out… have a financial accountant you can can rely on,” and if there’s any issues with they shareholders sort them out before you approach investors.
“If you go to an investor for God’s sake have a business ready for investment,” he says.
“It’s not prize money, it’s an investment”.
And once you have everything up to scratch “do it”.
“It’s a must do,” Steve says, specifically referring to pitching for investment on Shark Tank.
“You can always pull out at the last moment… [but] it gets some exposure for your business.
“Seize that opportunity.”
NOW READ: Steve Baxter spent $300,000 a year on Shark Tank to hire full-time staff to do due diligence on his deals
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