In the Trenches: Considering the Shark Tank
I've become obsessed with watching the show Shark Tank on ABC. If you haven't seen it, it's a show where small businesses go into the room to make a pitch for the "sharks" to invest in their companies on the spot. It's like speed dating with venture capitalists, and it's completely addictive.
You might think it's an aspirational thing. I have a small business and I see people getting big money deals so I must want some, right? Wrong. If anything, it makes me remember why I've never really wanted outside investors.
There's no question that what you see on the show is far from the full story. There's a lot more due diligence that goes on behind the scenes in order to determine if an investment is a good one. Just making the case is one piece of the puzzle, but then what happens if you do strike a deal?
You might be flush with cash, but it's not your cash. There is a tremendous responsibility that comes with taking money from others. You need to pay that money back with a good return, and that has to be top of mind the second you take the money. The "sharks" make sure to pound that idea in very frequently, as they should.
I'm the kind of person that takes that kind of responsibility very seriously, but I'm afraid it would push me to make decisions that might not be in the best interest of the business in the long run. Instead, I am sure I would focus too heavily on repaying my investors as I tried to steer the business. At least, that's how I feel at this moment.
One reason I feel that way is because I don't actually need the money right now. We're still able to grow with the funds on hand, and there hasn't been a need for a massive investment just yet. If we took the money, it would be just because it's what other small businesses strive for. I have no interest in that.
This doesn't mean that I'm refusing to consider the idea in the future. If we have a great opportunity to grow and it requires money that isn't available internally, I'll be the first to look for outside capital. But that would have to be for a specific purpose, and then only if I had a plan on how to return the investment down the road.
For now, however, I'll just enjoy watching the show ...
Brett Snyder is President and Chief Airline Dork of Cranky Concierge air travel assistance. Snyder previously worked for several airlines, including America West and United, before leaving to create a travel search site for PriceGrabber.com. Snyder did his undergrad at George Washington and earned his MBA from Stanford.