Shark Tank Questions

The reality television series Shark Tank can help to introduce aspiring entrepreneurs to the rigors of the business world. Here is a list of questions, adapted from those often asked on the show, that an entrepreneur should be prepared to answer about their product or business proposal. Be able to defend each answer.

Briefly describe the product or proposal.

1. What is the product, service, or other proposal?
2. How is it used?
3. What is the value that it adds?
   1. What makes this unique?
   2. Why should I care about this product?
   3. How long does it last?
   4. Is the need for the product recurring?
      1. Is it something to subscribe to?
4. What is the target market?
5. How did you choose that product name?
6. Is this a single product, or the start of a brand or product line?

Describe the business opportunity.

1. What markets are you addressing?
2. How large are those markets?
   1. Is the market growing, steady, or shrinking?
   2. Is the market local, regional, national, or international?
3. What is the competitive landscape?
   1. Who are the competitors?
   2. What gives you an advantage?
   3. What market share do you now have?
      1. How will that change over time?
   4. How is your intellectual property protected?
   5. What are the barriers to entry?
4. How can this scale up to address the full market potential?
5. Are there any moral, legal, regulatory, or safety concerns?
6. Does this infringe on any intellectual property claims?
7. What is the environmental impact?
8. What is the social impact?

Describe your background

1. What is your background, education, and experience?
2. How did you come to develop this product?
3. Why is this important to you?
4. What essential business and operational skills are you lacking?
   1. How will those business needs be met?

Describe your business results

1. When did you start the business?
   1. How did that come about?
2. How do people learn about your product?
   1. How do you advertise?
   2. What fraction of new customers result from each platform.
3. Describe your customers
   1. How many customers do you have?
      1. What is their demographics, psychographics, or market segment?
   2. Who is your biggest customer?
   3. What fraction of customers return?
      1. What is the churn rate?
   4. What is the product return rate?
   5. What is your customer attrition rate?
   6. What feedback have you received from your customers?
4. What are your sales to date?
   1. Describe the sales history
      1. What are sales results by year (in both units and dollars)
   2. What fraction is from direct sales, on-line sales, wholesale, retail, or other platforms?
5. What are the costs and profits?
   1. Customer Acquisition Costs.
   2. Direct material costs, manufacturing cost, shipping costs, landed cost, and prices
   3. Profit margin
   4. Profits and losses to date
6. What are the biggest problems the business is facing?
   1. What solutions do you foresee?

Describe the business operations.

1. Where and how is the product manufactured and delivered?
   1. Describe the manufacturing or service delivery
      1. Where is the product manufactured?
      2. Can the manufacturing location be changed?
   2. Describe the logistics
   3. What are the lead times?
      1. Where are the delays and queues?
2. Do you work full time running this business?
3. Who else works running the business?
   1. Who are your partners?
   2. Describe your team.
   3. What are their roles?
4. What is your current product inventory?
5. What, if any, is your order backlog?

Describe the business finances.

1. How much cash (or access to funding) is currently on-hand?
2. What debt are you carrying?
3. What is your financial run rate?
4. Are you paying yourself?
   1. If not, how are you covering your living expenses?

Describe the business ownership

1. How was the business funded initially?
2. Describe any other investors, if any.
3. What share of the business do you own?
4. Are you seeking other investors?

Describe the business valuation

1. What business valuation are you presenting?
2. Why do you value your company the way you do?
3. What growth do you forecast?
4. When can an investor expect a return on this investment?

How will you use the money you are requesting?

1. Specifically, how will this investment help to grow the business?
2. Are you seeking a partner or cash?
3. Is a licensing or royalty payment deal attractive?

Why should we invest in you?

Be precise and concise!

Acronyms

The acronyms listed here are used on the show:

1. B2B: Business-to-Business
2. B2C: Business-to-Consumer
3. Burn rate: The rate at which a company is spending its cash reserves
4. CAC: Customer Acquisition Cost
5. Cap table: Capitalization table, which lists the ownership percentages of a company's shareholders
6. COGS: Cost of Goods Sold
7. E-commerce: Electronic Commerce
8. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization
9. F&F: Friends and Family (referring to early investors)
10. FBA: Fulfillment By Amazon
11. IPO: Initial Public Offering
12. KPI: Key Performance Indicator
13. LTV: Lifetime Value of a customer
14. MOQ: Minimum Order Quantity
15. MSRP: Manufacturer's suggested retail price.
16. MVP: Minimum Viable Product
17. MVP: Most Valuable Player (In some episodes, this term has also been used to refer to the entrepreneur who stood out the most during their pitch)
18. NDA: Non-Disclosure Agreement
19. NPM: Net Profit Margin
20. OPM: Other People's Money
21. P&L: Profit and Loss
22. POC: Proof of Concept.
23. PPM: Private Placement Memorandum
24. R&D: Research and Development
25. ROI: Return on Investment
26. Runway: The amount of time a company has until it runs out of cash.
27. Seed round: The initial round of fundraising for a startup
28. SEO: Search engine optimization is the process of improving the quality and quantity of website traffic to a website or a web page from search engines.
29. Series A, B, C, etc.: Successive rounds of funding for a startup, each typically larger than the previous one.
30. SKU: Stock Keeping Unit
31. TAM: Total Addressable Market
32. Traction: A measure of a business's momentum or progress