Exploring Angel Investor Impact: Diving into the Shark Tank!

Abstract

This article explores the investment impact and performance of a unique group of angel investors: those featured on the television show Shark Tank. It explores the relationship between the investors’ individual characteristics such as experience, reputation, and network, with their investments’ performance and attributes. The authors find evidence that investor and deal characteristics matter for predicting whether an investor is more or less likely to make offers and close deals. However, on average, Sharks do not have the ability to select outperforming companies, where investment performance is measured by the survival and website traffic of the start-up companies. They found the reputational impact of Shark Tank as a venue is significant. While these Shark investors are not typical of the vast majority of angel investors, the authors identify fundamental insights that may be of value to understanding the much larger and less famous angel investor community and the entrepreneurial firms they finance.