Shark Tank is a long-running TV show on ABC that features so-called sharks, or well-known investors and entrepreneurs, on one side and business owners looking for exposure or funding on the other side.
If sharks are interested, they make an offer to the entrepreneur, often resulting in a negotiation over the percentage of ownership and the amount of money being offered.
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Mark Cuban is one of the show’s core sharks, along with Robert Herjavec, Barbara Corcoran, Lori Greiner, Daymond John, and Kevin O’Leary. Although he’s reportedly leaving the show, he’s no stranger to explaining how things work behind the scenes.
A couple of years ago, Mark was a guest on Wired’s popular “Tech Support” YouTube series. There, he answered questions about entrepreneurship, crypto, the looming recession, and giving everyone a living wage.
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A Twitter user asked him why there’s no Shark Tank for nonprofits because they’re “also businesses that need investment for growth/impact, with a return that’s priceless?” Cuban answered that the reason there’s no Shark Tank for nonprofits or for kids is that people would see them as monsters if they rejected any pitches– “It seems so sweet and so nice, but the minute we say no to a nonprofit, we are the worst human beings on the planet.”
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He continued, “We can’t do nonprofits, we can’t do kids, because we can’t say yes to everybody. And so it’s just better that we don’t do it at all.”
Mark Cuban’s reason for not having a Shark Tank for nonprofits points out a key difference between for-profit businesses and nonprofits. Both need money to keep running, but their goals and supporters’ expectations are quite different.
In the business world, investors expect to make money from their investments, which is easy to measure and discuss. But for nonprofits, the benefits are often about making a positive impact on society, which is harder to measure and agree on. This makes it tough to use the same investment model that Shark Tank uses.
Another part of Cuban’s explanation is the emotional and ethical challenge of turning down nonprofit pitches. On a show like Shark Tank, how the public views the investors is very important. Saying no to a nonprofit, even for good reasons like concerns about whether the project is doable or fits the investor’s goals, could result in backlash.
Viewers might see the decision as lacking empathy or social responsibility, which could hurt the investor’s reputation and the show’s image.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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