Why almost 50 percent of Shark Tank India deals never happen: Sharks say they’re ghosted by founders, even face fraud

Aman Gupta recalls how a pitcher didn’t respond after closing the deal on Shark Tank India

Speaking about the importance of due diligence, he told PTI, “In one hour, no one gets a cheque. There is a due diligence process and when we fund companies. There are companies which are not even formed; governance aspects have to be checked. Whether whatever the founder said on the show is right or wrong… we also don’t want to invest in a company where we find later that the founder is a fraud.”

Aman mentioned that in season 3, there was a deal, which was shown and the pitcher hasn’t been responding to them since soon after the deal was cracked on the episode.

Many founders have ghosted me: Namita Thapar

Namita Thapar has faced similar situations on Shark Tank India. Speaking on the YouTube channel Finance With Sharan, she revealed how many founders have ghosted her, “A lot of people are very clueless when it comes to the count of investments because what they don’t realise is when we start doing our due diligence, there are multiple things. There’s literally a lack of integrity on the part of the founders. There are many founders who have ghosted me. There are many founders who, when we do the due diligence, the numbers they quoted at the tank, they are completely off, not just marginally but substantially off.”

Thapar emphasised the distinction between what is presented in the Shark Tank and what is uncovered during the due diligence process. She said, “I think this is one thing that whoever is following Shark Tank must be aware of, that there is a margin between what’s revealed at the tank vs what really comes out in the due diligence.”

When Anupam Mittal had to deal with an unregistered company

Anupam Mittal shared with Mint his encounter with entrepreneurs whose companies were unregistered. He recounted instances where the entrepreneurs didn’t even have a registered company, and the Registrar of Companies (ROC) website was inaccessible for three months. He told Mint, “Those guys didn’t even have a company formed. And the ROC website was down for three months. My team was helping them and trying to find other ways, but for three months it was impossible to register a new company.”

Anupam also revealed that founders opt out of the deals because they get better valuation outside after featuring on the show. He said, “Ninety percent of the time, if a deal does not happen after the initial commitment, it’s because the founder backed out. They think they will get a better valuation outside. Let’s say we commit to 20 deals and 10 go through. Out of the 10 that did not go through at least seven or eight will be cases where the founder has backed out. And you’ll have two or three instances where the claims were not correct or the requisite conditions were not met.”

Once they air, they get better deals outside: Vineeta Singh

Vineeta reveals to the YouTube channel Finance with Sharan why many entrepreneurs choose to scrap the Shark Tank deal. “Once they air, they get better deals outside so then they prefer to go with those instead of the deal that they got in Shark Tank India. I understand that an entrepreneur goes for an optimised valuation but I feel it is unfair,” she said.

You don’t get any information before you walk into the tank: Radhika Gupta

Radhika Gupta spoke about what due diligence entails to Moneycontrol. She said, “You start the due diligence process, which one would do with any unlisted investment. You start with simple things such as verifying the claims made on the show, and then check what are the risks in the business, whether the company exists or not, whether it has paid its taxes, etc.”