For those tempted to think that “reality television” is an oxymoron, we’ve got counterproof for you. Wharton alumni who have appeared on Shark Tank, ABC’s hit in which entrepreneurs pitch business ideas to investors, report that if you want to know what it’s like to try to raise money for a business plan, the show tells it like it is. That is … except for all the times that it doesn’t.

The format for the 6-year-old Shark Tank is simple. A panel of Sharks, elsewhere called “venture capitalists,” listens to business plans and then decides on the spot if they want to invest their own money. Mark Cuban, famous for parlaying a well-timed, dot-com-era sale into a business empire, is the best-known of the Sharks, though other panelists are riding the show’s popularity to their own mini-celebrity. Some of the ideas that make it to the show seem like Home Shopping Network rejects: a belt buckle with a clip for holding a beer can; a coffee shop for cats. And any particular Shark Tank episode cycles through all of the staples of reality TV, like constantly shifting plot arcs and quick cutaway shots of judges looking concerned, confused or bemused, accompanied by the appropriately dramatic musical sound effects.

Wharton alumni have appeared on the show from the start, and the ideas pitched by the six alumni teams ranged from EduTech to plush toys, B2B services to a cybersecurity device originally conceived as a gag.

Real Investments

During a show aired in 2014, Jordan Lloyd Bookey WG07 and her husband, Felix Brandon Lloyd, scored the Shark Tank equivalent of a homerun: an investment by Cuban. He paid $250,000 for 25 percent of Zoobean, pitched on the show as an educational platform that could match young readers with books tailored to their ages and interests. The deal closed with Cuban in 2013, months after the show was filmed in July.

Zoobean had already raised seed money by the time of its Shark Tank appearance; in fact, the show’s producers got in touch after reading about the company’s victory in a local entrepreneurship competition. Even though the founding couple was familiar with grilling from VCs, Bookey says, they did their homework, watching every past episode of the show and compiling a spreadsheet of every Shark question.

The company, says Bookey, is alive and well, though it has undergone a pivot since the show. Now, rather than targeting individual readers and their parents, it has become more of a “business-to-business” operation, supplying its recommendation engine and online Summer Reading service to libraries and schools. Zoobean has 50 library systems on board, as well as a full-time staff of seven.

Shark Tank, she says, has been a key part of its success, and Cuban has stayed involved as an investor, getting weekly updates via email and responding to the occasional questions fired his way.

“He’s been a great partner,” says Bookey.

Real PitchWharton entrepreneurs on Shark Tank

Bookey and the other Wharton alumni who have been on the show tell much the same story about the major aspects of the experience:

The show is taped inside the same giant Culver City studio lot where parts of The Wizard of Oz were filmed. The encounter between entrepreneurs and Sharks is real; neither have met the other until the moment of the actual pitch. Before that happens, though, the entrepreneurs will have spent several days in the studio working closely with a producer to refine their pitch, even practicing before a panel of mock Sharks.

The actual encounter usually lasts much longer than the TV-friendly 10 minutes or so shown on the program; some participants reported their sessions lasting as long as an hour. With some significant exceptions, the Sharks ask the questions that any real investor would. What is your total addressable market? What barriers to entry are there for competitors? Some of the more esoteric issues, like details about a company’s convertible note structure, tend to end up on the cutting room floor. But there were no real complaints from any of the Wharton grads about the editing; nearly everyone says that the broadcast segment was representative of their entire Shark interaction. (Participants sign a release that allows producers to edit the show any way they wish.)

After the taping, those whose startup didn’t get funded get to spend time with reality TV’s version of a grief counselor; for some, it was the same woman who helped soothe the nerves of the contestants voted off the island in Survivor, which, like Shark Tank, is produced by One Three Media, a joint venture whose partners include MGM and Hearst Corp.

Real Drama

It’s no big surprise that there is a winnowing process involved in making it on the air; fewer than 1 percent of companies that apply to the show are accepted (which isn’t substantially different from what happens on Sand Hill Road in Silicon Valley). But even if you’re picked to actually do a taping in front of the Sharks, that doesn’t mean you’ll actually be on TV. In fact, only about half the presentations make it on the air.

That fact, say several of the Wharton Shark Tank veterans, is one of the big differences between the show and the real world. Actual entrepreneurs need only concern themselves with the impression they are making with investors; on the show, they also need a meta-awareness of how the interaction is “playing on TV”—meaning, they are also playing to the show’s producers.

“You have to have both of those audiences in mind,” says Alex Furmansky ENG07 W07, whose company, Budsies, manufactures plush, custom-made toys. “You need to have a big personality, and to show a lot of passion.”

It also helps to have a few tricks up your sleeve. For his segment, Furmansky, with advice from his producer, developed two “surprise reveals” that could be dropped into his presentation. When he first came on the set, it had been decorated with the sorts of Budsies that are the company’s stock in trade—stuffed animals based on children’s artwork. As the segment progressed, Furmansky asked rhetorically what else most children loved. When the panel, as expected, answered “pets,” he was ready with Budsie versions of kittens and puppies. A few minutes later, for his intended coup de grâce, Furmansky dramatically presented Budsies in each of the Sharks’ likeness.

The tricks, though, couldn’t distract the Sharks from this question: Since each Budsie was a custom creation, how would the business ever develop manufacturing economies of scale? Furmansky answered that each toy already had a healthy profit margin. The Sharks responded with two offers on the show, but offers that Furmansky turned down because he felt they undervalued Budsies.

He isn’t downcast though. A month later, he raised funds at his valuation, then scaled up.

“We’ve since expanded to four manufacturing facilities to keep up with demand,” Furmansky reports.

Indeed, several show alumni say that getting a check from a Shark is not the main reason for being on the show. Instead, it’s the publicity. Huge spikes in Web traffic when the show airs are the norm, and again when repeats get broadcast. Offers from other potential investors increase as well. And, naturally, sales usually spike.

Real Secrets

There are other ways in which what the viewers see diverges from reality. One of the most significant involves the chance that just because a deal gets made on Shark Tank doesn’t mean it actually happens in real life. In fact, Cuban has been quoted as saying that 30 percent of his show deals never work out (often because the 10-person staff overseeing his Shark Tank projects finds something disagreeable).

Viewers of the 2014 season finale saw Ryan Frankel WG12 and Kunal Sarda WG11 agree to sell 20 percent of their business, VerbalizeIt, to Shark Kevin O’Leary for $250,000. The final scene showed the three men swapping high-fives.

O’Leary never ended up being an investor however, says Frankel. What’s more, VerbalizeIt has since morphed into an entirely different business from what was presented on TV. At the time, Frankel and Sarda wanted to create a Web-based service that would, in a few minutes, make a telephone connection between someone needing a translation and someone who could speak the required language. Frankel got the idea for the business while falling ill during a China visit, finding himself unable to describe his symptoms to a pharmacist. VerbalizeIt was planning on charging for its service by the minute. Since the show, the co-founders exited the unknown and unproven consumer translation market, Frankel reports, and entered into the $37 billion business translation market, providing services for multinational corporations and similar operations.

Such details of these startups’ current capital structures are, technically, not something we are supposed to know. Everyone appearing on the show signs a nondisclosure agreement (NDA) that prohibits them from talking about just about anything connected with their appearance—before, during or after taping.

Which is why Zander Adell WG12 wouldn’t say if shark Robert Herjavec still has the 12 percent of Adell’s evening package delivery business, Doorman, over which viewers of an episode aired in March saw the two haggle.

“I just can’t talk about the deal,” explains Adell, a graduate of Wharton’s West Coast MBA for Executives Program. “We sign a lot of NDAs.”

Adell does discuss, though, what he describes as a nearly relentless winnowing process between the time one first applies to be on the show and when a pitch is chosen for airtime.

“It’s a ton of work,” he says about the required effort from him and his co-founder, Kapil Israni. “You’re always preparing reports for them, about your company and your personal background. … It was six months of back-and-forth due diligence, with many weeding-out phases along the way, when we’d learn that we were one of the few companies to have made the cut.”

In any case, Doorman continues to expand. Adell says it’s been lining up direct deals with major retailers to provide evening delivery service for them.

Real Disappointment

As it happens, not every entrepreneur who ends up on Shark Tank runs through the same gauntlet as Adell. Some, in fact, are practically begged to appear, which is what happened with Craig Isakow WG08.

For anyone who watched Isakow’s January 2014 episode and wondered, “Is this some kind of joke?” the answer is, “Yes, for the most part, it is.” Isakow pitched Eyebloc, a piece of plastic that snaps over and blocks off the webcam lens at the top of most laptops. Arguably, a need exists for such a product, as a hacker could use a webcam to spy on its owner, but for Isakow it was a running joke with his circle of friends; he told them he was going to invent something that would make him an “Eyebloc billionaire, but that my biggest competitor was going to be duct tape.”

It stayed a joke until one long Fourth of July weekend, when a bored Isakow created a website for the product, with the intent of advertising it online for people concerned about government spying. He mentioned the idea to a contractor working on his bathroom, who said it sounded like something from Shark Tank. Isakow fired off an email. He heard back in a few hours. The show was in love with the idea and wanted a demo tape immediately. Isakow was due to leave in a few days for a Wharton classmate’s wedding in the jungles of Colombia. The producer insisted he make the tape before he left. He used the 3-D printer at the local library to make a prototype. Then using the skills learned from an improv class he was taking, he made his demo pitch, with his wife holding the camera.

“My brother was there, and he kept telling me I had to act crazier. So I started yelling into the camera, saying things like, ‘Mark Cuban, how do you know I’m not watching you right this very minute?’ I kept reminding myself that I was pitching reality TV, not Benchmark or Kleiner Perkins,” he recalls.

Eyebloc was promptly accepted, which was something of a problem for Isakow, because he didn’t actually have a product yet. He was following the one-step-at-a-time business advice of the Silicon Valley best-seller The Lean Startup. He found a supplier on the Web and started moving toward manufacturing and the hundreds of other sundry things needed to get a company off the ground. He agreed to his wife’s demand to limit his initial investment to $1,000, which he raised by selling a bike.

When Isakow actually appeared on Shark Tank, one of his lines was, “How many of you have ever been naked in front of your computer?” That was a bit too risqué for Isakow’s real-life persona; he is a veteran entrepreneur in the energy conservation field, with a successful startup to his name, and now heads partnerships and business development with Shift Technologies, an online used car marketplace that recently closed on $50 million in financing. So to protect his personal brand, Isakow did everything related to Eyebloc using his initials, as C.J. Isakow.

“I had worked very hard to be an energy expert, so for Eyebloc, I created an alter ego,” he says.

While Eyebloc started as a joke, a funny thing happened to Isakow during the six weeks it took him to get to Hollywood: He started to believe the company might actually work. When he finally got in front of the Sharks—only to be brutally knocked down (“You want us to give $50,000 for that little piece of crap?” asked one)—he was disappointed, he says.

“By the time I actually taped the show, I was pretty proud of what I had created. It was one of the hardest professional things I have ever done,” Isakow says.

The fact that Shark Tank went out of its way to make air time for Eyebloc makes Isakow a bit skeptical about the show and how realistic it is in its depiction of business.

“No real VCs would ever have taken a meeting like that,” he says.

The other Wharton grads who have been on the show might disagree with his sentiment.

“[What the sharks do] has brought into popular culture the kinds of metrics that a business person needs to think about, which means it encourages entrepreneurship,” Adell says. “I think it’s not just good TV; that it’s also good for the country.”


Lee Gomes is a freelance writer living in San Francisco who has covered business and technology for a number of publications, including The Wall Street Journal.