Shark Tank India 3: From entrepreneurs ghosting Namita Thapar to founders backing out from deals with Anupam Mittal; Sharks open up about the importance of due diligence after cracking the deal

The third season of Shark Tank India 3 has been stressing upon the process of due diligence, however, many avid followers of the show haven't understood why the process is so important for the Sharks before investing their money in the entrepreneur's business. Namita, Aman, Anupam and all open up about what happens after the pitcher strikes a deal and what role does the process of due diligence play in the deal:

While having a conversation with PTI, Aman spoke about how the due diligence process for any deal is important, he mentioned, "In one hour, no one gets a cheque. There is a due diligence process and when we fund companies…there are companies which are not even formed…Governance aspects have to be checked…whether whatever the founder said on the show is right or wrong…we also don’t want to invest in a company where we find later that the founder is a fraud,” he said. Gupta said he is glad that the misconceptions are being cleared before the show’s next season. “It is good that this has happened because now Season 3 is starting…I start shooting next month…it is good that people understand that they will not get immediate money boss due diligence will happen."

Aman mentioned that in season 3, there was a deal, which was shown and the pitcher hasn't been responding to them since soon after the deal was cracked on the episode.

In a podcast, Namita reveals how many founders have ghosted her, "A lot of people are very clueless when it comes to the count of investments because what they don’t realise is when we start doing our due diligence, there are multiple things. There’s literally a lack of integrity on the part of the founders. There are many founders who have ghosted me. There are many founders who, when we do the due diligence, the numbers they quoted at the tank, they are completely off, not just marginally but substantially off."

Namita Thapar claimed that a lot of business owners later revealed that they have multiple companies and are not interested in merging them for the deal to happen. She quoted, “I think this is one thing that whoever is following Shark Tank must be aware of, that there is a margin between what’s revealed at the tank vs what really comes out in the due diligence.”

Anupam Mittal reveals to a portal how he has come across entrepreneurs with unregistered companies, “Those guys didn't even have a company formed. And the ROC website was down for three months. My team was helping them and trying to find other ways…going directly to the registrar company…but for three months it was impossible to register a new company.”

Anupam "90% of the time…if a deal does not happen after the initial commitment…it's because the founder backed out because they think they got a better valuation outside. Let's say we commit to 20 deals and 10 go through. Out of the 10 that did not go through at least seven or eight will be cases where the founder has backed out. And you'll have two or three instances where the claims were not correct or the requisite conditions were not met." Shark Tank India season 3 focuses on displaying the finest of the best. Mittal underscores the importance of "real authenticity" while highlighting the amazing founders and investments represented this season. So he says, "As always, you know how much ever there is funding winter out there, it's always summer on the tank, you will see a lot of good, wholesome investments."

In one of the episodes, Peyush Bansal met a founder that he had planned on investing in earlier but the deal couldn't happen, later Peyush revealed, "Today you had a deal on Shark Tank like we had one. When you came to me you didn't have even 1% revenue. You were pre-revenue. I still decided to bet Rs 1 cr on you at 10% equity. You were fixated that you wanted Rs 15 cr. You found some ultra HNIs, on 0 revenue I was ready to give you Rs 1cr. Even if you deal here, it will take a few months. In between all of this, you had a good sale, but you didn't close the round. I was giving you 5 times more revenue on Rs 2 cr which is much better than Shark Tank. You then told me you want less money. I agreed to that too. But you didn't close the deal."

Vineeta reveals how many entrepreneurs choose to scrap off the Shark Tank deal of higher valuations, "Once they air, they get better deals outside so then they prefer to go with those instead of the deal that they got in Shark Tank India. I understand that an entrepreneur goes for an optimised valuation but I feel it is unfair."

Talking about the deals to a portal, Radhika Gupta mentioned “You don't get any information before you walk into the tank. You don't even know if you're going to be talking to a tech company or a food company, you know nothing until you walk in and see the setup. And then within a minute or two, the pitcher is on stage, and they pitch. Then you have about an hour to have your conversation and ask questions, but nobody tells you what to ask. There is nothing scripted in any of this, contrary to what people may think.”

“You start the due diligence process, which one would do with any unlisted investment. You start with simple things such as verifying the claims made on the show, and then check what are the risks in the business, whether the company exists or not, whether it has paid its taxes, etc.,” Radhika further quipped.