It’s not often that you get to see an international franchise of a reality show in Pakistan. These have been far and few between over recent years – the first one was Master Chef Pakistan in 2014 followed by a couple of iterations of Pakistani Idol.
And now earlier this year, we saw the much-hyped Shark Tank finally make its debut in Pakistan. Shown on Green TV, the show has garnered a decent number of views on the TV channel’s YouTube channel.
The show ended its airing several months ago and in recent days there have been social media posts and forwards on WhatsApp speaking in very negative terms of the show.
The messages and posts, which were all mostly anonymous, claimed that none of the pitches that were offered investments by the judges – or ‘sharks’ as they are called on the show – had materialised and that several of the judges had more or less ghosted the startup founders who were left high and dry.
In addition to this, there were also posts by founders of startups complaining that their company’s purpose and primary product had been misrepresented on the show or in one instance that their pitch was recorded and even a teaser released but it never made it to the final broadcast. In both instances, the founders said that they had to suffer embarrassment for no fault of their own.
So we decided to investigate the matter in some depth and spoke to several of the founders who had taken part in Shark Tank Pakistan and had in fact been made offers of investment by the sharks.
Did none of the offers made on the show materialise?
The first impression that was being given as a result of the posts circulating on social media tended to give the impression that practically not a single one of the offers made during the show’s broadcast materialised and went beyond the initial verbal commitment phase. We also separately spoke to several of those who had been made offers on the show and they all said that the sharks had ghosted them and that when they tried to contact the show’s producer there was no response either.
They seemed upset on two counts: one that the promises of investment made didn’t materialise and two, that the sharks, as they claimed, had basically ghosted them. They also said that if a shark had changed his or her mind, they could have just informed the startup of that, instead of keeping them in limbo.
So we reached out to the sharks to get their side of the story since it seemed unlikely that there would be zero conversion of the investment commitments made during the show’s broadcast.
The global average for offers made on the show materialising into actual investment is 35-40%, and in Shark Tank Pakistan’s case this may be in the region of 8-12%
One of the sharks, Faisal Aftab of Zayn Capital, a reliable and known name in the world of venture capitalists, said that he made 3-4 offers and he had in fact closed them and delivered the investment amount to the startups. He said that in some cases, his investment was part of a wide investment along with one or more other sharks and that these had not materialised because of these other sharks.
Another shark, Junaid Iqbal of Salt Ventures and formerly of Careem, we spoke to also dispelled the impression that no offers to invest were followed up. “I am a conservative investor and I made a total of nine offers of investment on the show. Two of these went past their due diligence phase and of these one startup had a change of mind and refused the offer while the offer with the other startup was in its finalisation stage.
We were told that over 85 offers to invest were made on the show so to suggest that practically no offer was followed up and converted into actual investment in a startup is not true. That said, the global average for offers made on the show materialising into actual investment is 35-40%, and in Shark Tank Pakistan’s case this may be in the region of 8-12%.
The challenge of documentation
As one would expect, the degree of documentation of companies and startups was very low, so much so that this proved (according to the sharks we spoke with) to be a major hindrance in many of the offers made verbally not being followed up. The sharks said that at the end of the day, they can only invest in a company or startup where there is proper documentation, audited accounts, and all legal and regulatory requirements have been complied with.
Junaid Iqbal said that he expected the low level of documentation given that the economy and system, in general, do not place much of an incentive for businesses to come under the tax net. He said that startup founders and entrepreneurs actually had an incentive to become documented because doing so would give the actual size of their venture, revenue streams, and so on, and that this would generally lend itself to a more accurate (and higher) valuation of their company.
Did the sharks ghost the startup founders?
Several of the founders who appeared on Shark Tank Pakistan and were given verbal commitments indicated that this happened to them. They said it was several months since they had been in touch with the sharks who had agreed to invest in their startups.
We spoke to some of the sharks and they explained that it can take several months for a verbal investment offer made on the show to translate into an actual investment in a selected company or startup.
They said that due diligence had to be done and that they found that a very high percentage of the companies selected did not have complete documentation which is a prerequisite before an investment can be made into any company.
The sharks said that while they admired the entrepreneurial drive and spirit of the founders, they often had to guide the companies along the way in terms of what to do next and how to go about getting their documents in order and that this included referring them to lawyers as well as financial accountants.
That said, we were led to believe that there was a degree of ghosting going on among some sharks at least. The general consensus among the participants was that the show’s producers may have erred in the selection of some of the sharks since some of them did not have any proven track record of raising funds for themselves or others, and were not really known as venture capitalists or angel entrepreneurs.
Incidentally, for the purposes of getting their version for this story, we reached out to all sharks, and a few didn’t respond. We checked their social media handles and in two instances they had not posted anything on their LinkedIn accounts since the last 2-3 months. WhatsApp messages were also sent asking for their comments and also seeking answers to some questions that were also asked of those sharks that we were able to interview for this story.
Will there be a Season 2 of Shark Tank Pakistan?
Faisal Aftab said that Season 2 will happen and that he had been informed of this by the show’s producer. Moving forward, there is a general consensus that the producer will need to up the quality of sharks/judges that are to be brought on board and that they should be free of any controversy. He said that there will likely be a new panel of sharks and like in Season 1, he will anchor the judges. There was also a consensus that the performance of the National Incubation Centre should also be strengthened in terms of guiding the startups better on how to seek funds and investments in the real world and the importance of having all papers in order.
However, if one were to believe the startup founders who made pitches and were selected, several of them said that their experience on the show and of having been ghosted by (at least some of) the sharks was an overall unpleasant experience and that they wouldn’t want the show moving forward for a second season under the current management and producers.
Sameer Chishty, General Partner of SparkLabs, which has made over 600 startup investments around the world said: “Pakistan’s entrepreneurs deserve more platforms where they may obtain intelligent advice and plentiful capital. Programs that educate the general population on startup culture also serve a valuable purpose in encouraging entrepreneurship. We have been approached by entertainment producers with a much more localised twist on the same concept - and perhaps they bring it to life soon. It is heartening to read that the network that did season 1 remains committed to the format and is revamping the show for more impact. Frankly, putting up sharks who were themselves novices was not fair to anyone involved. This is not baby shark time.”