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How do Shark Tank Advisory shares work?

Before we discuss advisory shares, we’ll look at how Shark Tank works. If the investors like the product, they announce an investment. You’ll hear something like $100,000 for a 25 percent stake in the company. The deal is like any other private equity investment where the Sharks invest money at a set valuation.

How does a Sharks investment work?

At times, along with giving an upfront stake to the Sharks, the founders on the show structure the deal as a mix of ordinary shares and advisory shares. In our example, the founder on the show might pitch the investment as $100,000 for 20 percent and add another 5 percent worth of shares as advisory shares.

Do Shark Tank founders offer advisory equity?

You've likely come across this concept in numerous Shark Tank pitches, where founders offer advisory equity at a nominal value to sharks in exchange for their expertise and time to help with business growth and decision-making.

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