Where The Money Invested On Shark Tank Is Actually Coming From

"Shark Tank" has plenty to offer entrepreneurs, from networking opportunities to immense worldwide exposure for their businesses. But above all, everyone entering the tank is hoping for that sweet "Shark Tank" investment to kick their company into high gear. It may seem at times the sharks have an endless reservoir of cash to pull from, but is it really the investors who are giving away all that dough? 

The short answer is yes, the money invested on the hit ABC reality series comes straight from the pockets of the show's panel of wealthy investors. Long-time shark Mark Cuban clarifies this in a 2022 interview with The Long Shot when he is asked if the show matches the amount they invest in any way. "No, no. There's none of that," Cuban comments. "We get paid a salary, but I always spend more money than our salary." 

However, while Cuban and the other regular sharks have grown accustomed to this mindset, some of the show's guest investors need clarification on what's to come. After stating in the interview that guests are also required to invest their own money, Cuban shared a story about Charles Barkley's time as an investor in Season 10. "Like when Charles Barkley came on, he's like, 'This is really my money?'" Cuban recalls. "Yeah. Yeah, it is. That's your money."

The sharks take a huge risk when putting their money into a business. However, they have their own ways of ensuring that their resources are being used wisely. 

To viewers at home, it may seem like the tough part is over for "Shark Tank" entrepreneurs when they strike a deal with a shark on the show. However, that's far from the end of the process, as the investors need to make certain they know what their money is going towards. After the non-binding handshake deal, the sharks and their teams take the time to do further research on their businesses to ensure that the information lines up with what was presented on the show. During this period, it is not uncommon for each party to make deal adjustments or drop out entirely.

It took some time for this system to work. "Shark Tank" star Robert Herjavec spoke with The Motley Fool about his experience with ChordBuddy, who he made a deal with in Season 3. After reaching out for a financial statement, the investor got a surprising response. "I'm not exaggerating: A box of receipts showed up," Herjavec shares. "Literally a box of receipts, and we're like, 'Where's your income statement? Are you audited?' He was like, 'What's that?'" 

Since then, the show has made it mandatory that companies have this information straightened out beforehand, even though the sharks still don't receive it until after the show. According to Herjavec, around 50% of the deals close. As intimidating as it can be for both sides, this system ensures that sharks and entrepreneurs can swim together happily.