The feeding frenzy has begun: “Shark Tank,” ABC’s wildly popular entrepreneur pitch show, is back for an eighth season. Over the years, hundreds of people have appeared in the tank seeking investments and guidance from a panel of five successful venture capitalists collectively known as the “Sharks.” While some have walked away without a deal, many have walked away richer than they could have ever imagined. (See also: 10 Most Successful Products from Shark Tank)
Whether you’re constantly dreaming of making it into the tank or are just a casual viewer, these are the top terms you need to know. Click on the individual terms for more formal definitions.
Angel Investor: A more heavenly term for Sharks.
Break-even: A quick way to measure a business’s sustainability and potential for future success.
Equity: Every entrepreneur comes into the tank seeking a Shark that is willing to pay for equity, or partial ownership, of the company.
Liquidity: The more liquid a company’s assets are, they more easily they can be converted into cash. Sharks love that.
Margin: Wondering what the Sharks are scrawling on their notepads all the time? Chances are they’re calculating margins, which measure a business’s efficiency.
Market Value: The price a product would fetch on the market.
Overhead: Costs that a business must pay regardless of its performance. Think rent, office supplies, and utilities, for example.
Profit: A business’s total revenue less its expenses. The bigger the profit, the more likely the Sharks will bite.
Royalty: If you have a patent, you’re entitled to future royalties.