At the annual meeting of the Property and Freedom Society in Bodrum, Turkey, earlier this year, investor, homeschooler and founder of Radio Free Market Michael McKay raved to me about the ABC show Shark Tank, which he said he watches with his family on a regular basis. My wife, 7 year old, and I have come to love the show. It’s family-safe and pure capitalism in action. It’s a reality show with a panel of 5 independently wealthy billionaire or multimillionaire investors who evaluate pitches by small entrepreneurs. The investors are ruthless in their evaluation; the entrepreneurs are forced to explain the valuation of their company, their business model, revenue plan, target market, and use of funds. The entrepreneur usually asks for a certain amount of money (say, $100k) in exchange for a certain percent investment in the company (say, 20%). The sharks instantly do the math to figure out the implicit valuation of the company (in this example, $500k), and to figure out the current revenues and the multiple to the valuation. Then they argue about whether it’s worth it, and sometimes make competing offers to the entrepreneur. The show highlights the perfect intersection of innovation, entrepreneurship, and capital.
Source link: http://archive.mises.org/17820/shark-tank-the-best-most-capitalist-show-on-tv/