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FOXBusiness.com’s Kate Rogers on what legal experts are calling the ‘Shark Tank Effect’ and how entrepreneurs can avoid it.
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RA and now we will head over -- -- asked foxbusiness.com.
We're talking about the eighty -- -- at 9 o'clock eastern time on Friday is just shark tank I watched it.
Yeah you're there and essentially you've seen some celebrity on hours businessmen and he then.
They -- Money -- contestants -- the ideas and that's a different inventors crunch reviewers who wanna get started out.
It's their ideas before this panel of judges and the shows become so popular now legal experts are actually saying there's a shark tank effect and tell us about that so what do you say is he is -- essentially Contra yours.
And inventors that are looking to quickly take their product of their company to market.
They're taking -- had to deal to deal that -- really -- 100%.
Something that they normally go -- -- -- their products.
Into the mainstream market not good for consumers no definitely not good for consumers and definitely not what our country viewers wanna be doing when -- worked so hard to get a product started her company -- -- A -- some tips to -- that yes they spoke with -- Patrick -- he's a legal expert who helped structure these kind of deals between.
Venture capitalist and entrepreneur is looking eat me some tips.
For companies that are looking to get investment backing.
And what they can do to avoid the -- in fact.
I'm so the first thing is realize that you're dealing with an adversary when you're meeting up with a potential investor they're not your friend.
You -- to -- that you're going to have a long and fruitful business partnership with them but that's not always the case so definitely know that they have.
Potentially wanna find you because they -- in finance more more often than you do and also realize that.
You don't want to reveal too much which brings me to my next week which is controlled information -- -- about.
Anything that's new or novel about your company or product.
That's not on the market don't wanna disclose too much that even though your potentially getting backing from -- may even want to think about getting a legally binding non disclosure agreement that you bring into the meeting when your pitching.
Have been signing an essentially says that they cannot.
We'll -- -- your information or take a similar product or company to market.
Yes definitely really protects you -- -- only is an information for the purposes of evaluating the DO affect.
Third that's yeah that's definitely want to -- third.
If you're at the point where you're ready to strike a deal with them know kind of entrepreneurial.
One example isn't just get a royalty check from them on everything they sell your product their -- manufactured or get a lump sum payment.
-- you can create a company together and running 5050 with the investors.
Three biggest private financing and backing -- pay act -- you -- a bank loan.
Have a -- get more than you would Bernanke get more -- get more counseling if you're working with Mark -- in our Barbara Corcoran name might give you more tips -- average you know.
JPMorgan Chase would give you fair lending money or third on you you re you sell them your product and then name reseller market and pay back.
I'm so that's another thing to think about and then finally maintain control of any deal.
Don't yet you know those dollar signs -- horizon just signed the paperwork know your -- bringing something to the -- the other person wants and don't take anything not a 100% tax hike.
Yet no small business once daily and every week room a year now and the common theme that.
Many advisors to small businesses and small businesses themselves say I'm hearing notice is that year.
Process to be really good but other people say.
Hasn't happened perfect just getting out there you want to drive -- like keep people guessing -- snacks.
Sometimes -- can't wait for what's next exactly how isn't likely to wait yes.
So that's where it gets tricky in these tips -- something -- yeah definitely keep in mind who is -- it.
You know pop culture touting history -- I know lots one thing -- Interesting I spoke with this young -- -- -- -- he started a social gaming company called mentioned mobile.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Gave -- a third round for an undisclosed amount.
And -- says while he's happy with the deal that he hasn't he -- he thinks the shark tank in -- absolutely does exist.
But he thinks that investor is.
I'm inventors -- -- not worth she considered seeking deals with big name investors because the publicity that he gets from saying.
Mark Cuban and business partner if you're wonderful and it it's almost half the battle in -- small company getting that type of publicity getting your product on market right it commands attention.
And -- figure 8323 would say as he -- -- chat bottom line you know lawyer for everything.
Not a bad idea why exactly.
Thank you guys picked it's -- in.
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