The Saturday Rumpus Essay: Valuation Methods

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Lori Greiner is hugging Shelly Ehler, entrepreneur and stay-at-home mother of two. She’s buying a quarter of Ehler’s business for $75,000. Greiner’s written out the check, signed it, dangled it in front of Ehler.

“It’s right here,” she says. Greiner, CEO of a major retail company and host of her own QVC show, is currently valued at $50 million.

“I think I see a ton of me in you,” Greiner says to Ehler, who is tearing up, clasping her hands together. “I love your drive; I love your passion. I relate to you.”

Ehler is pitching her company on the third season of ABC’s Shark Tank, a reality show where small business owners try to convince a panel of venture capitalists, referred to as “sharks,” to invest in their companies. The sharks give cash-strapped business owners money in exchange for a percentage of company ownership, usually about 30-50%. Often entrepreneurs are pitching as a last-ditch attempt to save their businesses.

Shark Tank first aired in August 2009, when the US unemployment rate was at a 26-year high—nearly 10%—and rising. During the first season, the show’s intro credits flashed a home foreclosure sign. Now in its seventh season, the show consistently draws about six million viewers.

“You know, my husband and I got hit hard with the recession,” Ehler tells the sharks in February 2010. “I’ve never been through anything like that in my life. We’ve had four really rough years.” But then one day at the pool Ehler had an idea for a towel designed like a poncho that would let her sons change out of their wet bathing suits, a new kind of cover-up. She calls it a Show No. She imagines it in every waterpark in America, mothers slipping branded poncho-towels over the heads of their kids. She got the idea patented, trading pricey patent law work with her lawyer neighbor for custom sewing and drapes.

Greiner chuckles when Ehler says this. “You traded patent work for drapes.”

Ehler says she still sews every Show No towel herself.

“Every tear I cried and every prayer I prayed has brought me here to this moment in front of you,” she tells the sharks. She’s graceful, wringing her hands, sighing before each question they ask: What’s your valuation based on? What are your sales? If you had to miss your son’s birthday to present to the CEO of a major corporation, would you?

shownoShe brings her sons, aged nine and six, into the “tank”—as the show’s swanky boardroom presentation space is called—and they hand out custom-made towels to all five sharks. By the third season of the show, the sharks are used to this sort of thing. They’re given free samples of entrepreneurs’ food: bread pudding from a woman holding onto her late grandmother’s recipe; boneless ribs made by a former NFL player; ‘Mango Mango’ mango preserves, a combination jelly-salsa-dessert topping created by a black woman-owned catering company. They act as props in presentations: software mogul Kevin O’Leary standing in as the punching bag for an exercise system, and Mark Cuban, owner of the NBA’s Dallas Mavericks, peddling an exercise bike for a blend-your-own-smoothie stand demonstration. They hold and pet entrepreneurs’ bulldogs and Vizslas, part of pitches for colored dog hairspray (PetPaint, LLC) and dog birthday cake mix. “Oh, thank you!” each shark says to Ehler’s young sons, Mark and Clark, before immediately putting their Show Nos off to the side so they can focus on taking notes on the business.

After she takes Greiner’s check, Ehler chokes up. She says to the camera, “Dreams really do come true.” She later calls this her “Disney moment.”

O’Leary points out that Greiner’s gone gaga over a product that’s essentially a towel with a slit in it. As Ehler leaves the tank, another shark, Robert Herjavec, CEO of a $500-million Internet security company, turns to Griener, also dubious.

“Are you not caught up in her emotion?” Herjavec asks. “Be honest.”

“I love her emotion,” Greiner replies, “but I’m a businessperson.”

*

In her critique of Karl Marx in The Body in Pain, Elaine Scarry writes that the capitalist can be identified by his disembodiment. Unlike his workers—wage earners who use their bodies in the processes of production every day—the capitalist does no hard, embodied labor. It is precisely the person who can be involved in the system of production without risking his body, Scarry argues, who is a capitalist. Capital is generated from hundreds of thousands of bodies that are never its own. The capitalist is a disembodied ghost.

Scarry is careful to explain that this doesn’t mean the capitalist ceases to exist as a historical person with a body—that it’s not as if he has no “pride… pleasure… consciousness… or will” (think of Andrew Carnegie, John D. Rockefeller). But when his body expires and he dies a “private” death, it won’t have any relation to industry—and it will remain largely hidden from the rest of us.

This is why I like Shark Tank at first. Capital is a phantom—and yet here it is, a historical person again, a panel, speaking to me. It says:

“As of right now, you’re nobody to everybody.”

“Do you want to get rich or not?”

“Money has no soul; it doesn’t care.”

“Everybody wants to be a shark.”

It wears tailored two-button suits with pocket squares, Rolexes, lace-up Ferragamos, a black pencil dress with a sweetheart neckline. For the most part, it does like dogs and children, even if it has grown tired of them as a sales ploy. It struggles after nineteen years of marriage, but still seems happy with its domestic life.

I watch seventy-eight episodes of Shark Tank, more than two hundred pitches, in six weeks.

*

In my first few weeks of watching, it’s the sharks who fascinate me.

The show’s bumper screen features actual hammerheads circling counterclockwise around skyscrapers. It’s an extreme low angle shot, as if we’re looking up from the ocean floor. I’m not sure how much consideration the network put into selecting the hammerhead in particular (another bumper screen shows an advancing Great White), but hammerheads are some of the youngest and smartest sharks evolutionarily speaking. The hammerhead family is unique in that it gathers in packs, hunting in schools during the day. But like other sharks, hammerheads are ultimately solitary, returning to solo hunting each night. Alternating social and solitary predation like this, they are some of the most opportunistic animals on the planet.

At the start of each Shark Tank episode, the intro credits roll: “Who are the sharks? They’re self-made business experts worth billions.” During the show’s first season, there’s a montage of the sharks doing millionaire and billionaire things, set to the song “Money (That’s What I Want).” There’s B-roll of sharks closing high-powered deals and signing million-dollar checks, drinking red wine by roaring fireplaces, golfing.

MARK CUBAN, DAYMOND JOHN, BARBARA CORCORAN, KEVIN O'LEARY, ROBERT HERJAVEC, LORI GREINER

But voice-over reminds us that each shark has a rags-to-riches story: Kevin O’Leary started a software company in his basement that he eventually sold for $350 million. Robert Herjavec, the son of an immigrant factory worker, is now a technology mogul. Lori Greiner, “the queen of QVC,” invented a plastic jewelry organizer that she sold on the street, eventually generating $500 million in sales.

The concept of venture capital (VC) is one with inherent drama: the sharks have to decide whether or not to invest in a business with huge potential for gain or loss based on a five-minute pitch. VC used to be called “risk capital.” The sharks are portrayed as wise, almost oracular, for knowing how to make these snap judgments, for understanding instinctively where to put their money. When shark Barbara Cochran, a New York real estate mogul, smells blood in the water and wants to entice an entrepreneur into a deal with her, she often talks up her experience creating a brand. “I’ve done what you want to do,” she tells entrepreneurs. “I’ve built up a multi-million dollar brand from nothing.”

“Oh, please,” Robert Herjavec pipes up. “We’ve all done that.”

Part of my pleasure in watching the show is being initiated into this high-powered business world. It’s a world I’ve never inhabited or been interested in—to which I’ve never even gotten close. I’m a humanities graduate student, the child of left-leaning academics. Watching Shark Tank, I find not only that business fascinates me, but also—to my surprise—that I can understand it. I start to pick up on business jargon, how to talk and think like a shark. Listen to the numbers. You need proof of concept, or it’s just a hobby. Never put inventory before sales. Get bigger distribution. And the cardinal sin: Don’t inflate your company’s valuation.

My boyfriend introduces me to his new roommate, who’s getting an MBA.

“I already have mine from Shark Tank,” I say.

*

In the middle of my Shark Tank period, I attend a cultural studies conference for a graduate class. I’m under-dressed, under-caffeinated, one of ten grad students to barely make it in by 9 a.m. and determine exactly how many pastries she can gank without exceeding the limits of hospitality.

The conference is two days of unpacking globalization, transnationalism, and the many manifestations of neoliberalism. I love learning about neoliberalism, because it describes not only the economic ideology of the past thirty years, encompassing my entire life—corporate welfare, large-scale subsidies for the military-industrial complex, extremely deregulated free-market capitalism—but also the zeitgeist, the feelings I associate with living this ideology. It’s the business-speak that has become so ubiquitous: synergize and leverage your human capital and strategic partnerships for greater commercialization of your front-facing enterprise. It’s why “entrepreneurial spirit” and “branding yourself” are requirements for nearly all the jobs I’ve ever applied for. In the neoliberal worldview, everything serves and enhances the market, the highest societal good. It explains why I always feel like I should be selling myself more, generating value in one way or another.

At the conference, I’m listening to a German Studies professor deconstruct reality television, scribbling notes, getting pastry flakes on myself. Her presentation is about a short-running German reality show, featuring a few guys on a road trip searching for “the soul of Europe.”

She explains, “We see here the show engages in European identity discourse, a historical-culturalist belief that the ‘soul’ of Europe lies in shared beliefs, values and practices…”

I have entire classes that pass like this. And conversations with my parents. I see them as I look around the conference table, where the professorial crowd listens to presentations while surreptitiously grading student papers.

My parents are the opposite of businesspeople. My mother is a retired professor with a PhD, my father a would-be PhD who walked out of his own dissertation proposal defense because he thought his committee asked asinine questions. (It’s one of those family stories we don’t bring up.) When I introduced my then-boyfriend to them a few months ago, the first words out of my parents’ mouths were, “How educated is he?” There’s a fair amount of academic elitism I’ve imbibed, something I don’t like to acknowledge. But for me, the “ivory tower” has long been associated with noble purity. Eschewing money and status is the only way to live freely—to a live an examined life of meaning and value. But this comes at the expense of a certain kind of assurance: the assurance that what you do has any meaning or value to anyone else at all.

Graduate students are told that as undergraduates, we’re knowledge consumers, but as graduates, we’re knowledge producers. Of course, it’s a neoliberal standard: What value can we add to the body of knowledge—and, in turn, to the university? As the sharks tell everyone, the only thing that matters is money. I have no illusions about this—about what a writing and cultural studies Master’s degree will be worth. Some of my professors will openly admit that now more than ever, my degree isn’t worth the paper it’s printed on, that academia isn’t a real career prospect anymore. Go get a real job and keep writing, they say.

We’re in the nicest conference space I’ve ever been in: the Pittsburgh Athletic Association, a building said to be reminiscent of the 16th century Grimani Palace in Venice. The professor of mine who organized the conference said it was a windfall to be able to book it. It’s a members-only building, founded by forty Pittsburgh industrialists and businessmen in 1908 and still catering to their heirs. I had to be buzzed into the lobby and have my backpack inspected. On its website, the Club is billed as “the ultimate alternative to the typical hotel’s cookie-cutter meeting rooms and run of the mill banquet halls.” There are about thirty of us confined to one room and I feel so out of place that, during one of the breaks, I bumble around and nearly trip over a waiter. I’m doing my best to keep up my part in the pageantry, to look like a poised graduate student who belongs at fancy conferences. But I wonder if everyone else in the room feels as fraudulent, like we might all be squatting in this building, conspiring to put on a show of our own importance.

Margaret Mary Vojtko, fall 2008.In the fall of my second year at the University of Pittsburgh, an 83-year-old adjunct professor at nearby Duquesne University, Margaret Mary Vojtko, died alone and penniless in her crumbling house. She was receiving cancer treatment with no health insurance and was unable to pay her hospital bills. Then, the university let her go after twenty-five years of teaching. Campus police had escorted her out of her own office, where she was sleeping because she couldn’t afford her heating bills. After her death, a biting op-ed ran in the Pittsburgh Post-Gazette and the story went viral nationwide: proof that adjunct professors are treated like untouchables. I watched my peers post and re-post the story to Facebook in protest, tweeting #IAmMargaretMary, as they wondered aloud if everyone in academia will suffer the same fate.

After the day’s conference session, I know I will go home and watch Shark Tank, where the worth of things is easier to articulate. Kevin and Robert will make a $200,000 offer for a 50% equity stake in GiftCardRescue, founded by a Ghanaian immigrant, Kwami Kuadey. This is the first company I know before having seen it on the show. The sharks ding Kuadey on his valuation, saying that his business concept of buying and reselling unused gift cards online is “embryonic” and they need a 50-50 partnership to take the risk.

“I don’t think you’re worth what you think you’re worth,” Kevin tells Kuadey. Within four years, GiftCardRescue will bring in $6.6 million in revenue, ranking on the 2013 Inc. 500 List as 151st fastest growing company in the United States.

When Kuadey counters, offering the sharks a 40% stake, Robert says, “Every now and then in your life, as you’re trying to chase the dream, you get to a crossroad where you have to make a decision. This is one of those times. Which way are you gonna go?”

Watching the show more and more, I stop being able to tell for whom I’m supposed to feel allegiance: the sharks or the entrepreneurs. The entrepreneurs are the everymen, the ones middle-class viewers fall closest to demographically. But the show follows the sharks. After entrepreneurs leave the tank, sometimes in tears and on the verge of financial ruin, the camera lingers not on them, but on the sharks as they banter.

Once, after shooting down a pitch for an electric shoe polisher, the camera showed Kevin joking to the other sharks that he could’ve used the device to clean his tastevin, a wine-tasting saucer he uses as part of an exclusive Burgundy wine-drinking society.

“This is what the American Dream is all about and I feel very grateful for it,” Kuadey says as he walks out of the shark tank with half of his company.

“You know, I think we could’ve gotten more from him,” Robert tells Kevin.

*

To exist in the humanities in academia, there are certain prerequisites. No one is a neoliberal. Everyone has a relationship with Marxism. Everything is fraught and problematic, to be treated with detachment and dubiousness. Terms that mean something to the average person should generate the most suspicion. It goes without saying that the American Dream is a construct—everything is a construct—even the notion of the construct itself. Nothing is real or essential. No one believes in myths. Everything is viable as an object of study.

Though I’ve been watching Shark Tank for months, I tell myself that the show is just a guilty pleasure, perfect neoliberal propaganda. At first, I sit around with my classmates tracing the narrative clichés. I point out that, for all the schmaltz, there’s no genuine investment in dreams or in people. The sharks don’t jump at entrepreneurs with passion, for those who they think deserve a chance. They only jump at businesses that have already proven they can be profitable—just money breeding more money, like alchemy.

But then I find myself watching Lori Greiner alone at 2 a.m. I’m in my underwear eating peanut butter, rapt, blowing off my friends, not reading for class. Lori is listening to a pitch from two Santa Monica women who designed a clutch purse for smart phones. It’s stylin’ and dialin’, they say. They know what they’re doing—they worked in PR. Their dream is to air their product on QVC.

image144“I can always tell if a product is a zero or a hero,” Lori says to the founders of pursecase, LLC—her catchphrase. “And I think…” She stops, pauses for dramatic effect. “This is a superhero!” You see the two women light up and squeal and hug each other in the exact way that they’re supposed to.

Though she doesn’t become a regular until season three, Lori, I admit, is my favorite shark. She’s petite with long, blonde, pony-tailed hair, has a Midwestern accent with short As, and always projects kindness to those in the tank, because she and her husband are just like them. She loves “momtrepreneurs,” women who “speak her language.” While Kevin O’Leary has the bad guy reputation—he’s ironically nicknamed “Mr. Wonderful”—the guy who will tell entrepreneurs they have no business acumen and no future, Lori will say, “I like you,” as she’s tearing apart pitches. She’ll warmly shake entrepreneurs’ hands while she takes a controlling share of their companies. Her unofficial nickname is the warm-blooded shark.

I watch Lori invest in a decorative bottle cap company, M3 Girls, run by 12- and 16-year-old sisters, Maddie and Margo Bradshaw. She puts up $300k for a 15% stake. The company will gross $1.6 million in under two years. Their mother, Diane, stands with her daughters in the tank as they pitch. She really just wants to be proud of them. Lori understands.

I know these are all clichés. But I want to feel un-cloistered, connected. At some point, the academic detachment stops and I realize I’ve let the show in. I want to be reprogrammed. I want to love it unabashedly.

In an alternate reality, I want to be Lori Greiner. This isn’t true. I want to want to be Lori Greiner. I want the sense of comfort I imagine that Lori Greiner has, comfort that comes from holding a different worldview.

I imagine that her existence has more meaning and continuity than mine. She’s everything a woman living the American Dream is supposed to be. A Disney princess with million-dollar ideas. An ingénue with a business self-help book.

She probably feels free, feels American. There is no hedging for her. Her worth is assured. Words are allowed to have concrete definitions. She can believe in things, take them at face value. She is mythic, living the narrative as prescribed, as if it’s not a narrative at all.

I wonder why I can’t want what I’m supposed to want.

*

Shark Tank episode 303. Mark Cuban is shooting down Pat McCarthy, founder of Liquid Money, a high-end perfume that smells like cold hard cash. Its tagline is “the fragrance of success.”

You’d think the sharks would love the product—they constantly repeat that money is their favorite thing—but McCarthy is slick and snake-oily, brings in busty models to hand out his perfume samples. Later, in season 5, the sharks don’t like a pitch for a successful loan shark business. They don’t like entrepreneurs to be too much in their image, lest they lose leverage. Plus, McCarthy’s done the unforgiveable: overvalued his company. He’s got $50,000 in sales, but wants $100,000 for a 5% stake—a $2 million valuation. The sharks are eating him alive.

“You’ve broken the cardinal rule for me,” Mark Cuban says. “If you want my money, if you want a $2 million dollar valuation, and you don’t believe enough to sell ‘Money,’ you’re not an entrepreneur, you’re a wantrepreneur.”

I hate Mark Cuban as much as I love Lori Greiner. Cuban strikes me as the kind of guy who would beat his chest if it were socially acceptable. His ownership of the Mavericks is infamous, especially in my home state of Texas. He always appears courtside at games, yelling at players, upstaging their coach. He’s more hands-on than any other owner in NBA history and has been accused of verbal abuse by other teams, most notably when he called a Denver Nuggets player a “thug” in a postgame confrontation. Since he took over the Mavericks in 2000, the NBA has fined him nearly $2 million for inappropriate behavior. Shark Tank’s credits refer to his reputation obliquely, calling him the “outspoken owner” of the Dallas Mavericks.

I text my brother, Mitchel, who I’ve also hooked on the show.

“Mark Cuban just legitimately used the word ‘wantrepreneur…’” I write, with the ellipsis to indicate my quiet disgust.

“Hit him with a hard left cross. Then he’s not a doctor, he’s a wantadoctor.”

101867402-mark-cuban.1910x1000In 2008, Mark Cuban was accused of insider trading. He diluted stock in Mamma.com, a company with whom he had ties, before it tanked, saving him $750,000. A Texas jury found Cuban not guilty in 2013. The nine-member jury issued the verdict after deliberating for three-and-a-half hours. There’s footage of Cuban nodding and smiling as the verdict is read—the same knowing expression he gives on Shark Tank before he’s about to call someone a wantrepeneur.

My brother loves to make fun of Cuban, too. But I know he has the same anxieties as me: we know Cuban is worth more than both of us.

“So, Mark Cuban: great human or greatest human?” Mitchel texts.

“Kevin is too ridiculous to inflict too much damage, but Cuban is just a straight-up dick,” I reply.

“With a basketball team. And patents,” Mitchel writes. “He’s the better version of me.”

*

In the university writing center where I tutor part-time, a student brings in a composition paper about his high school breakup. His professor has assigned the class to write a personal essay that looks outward at some larger cultural issue, to connect the personal and the political. This student has framed his breakup essay around ideas of happiness: when he was dating his girlfriend, he only cared about her happiness, but afterward, he discovered it’s better to make himself happy. Next to all his reflections about happiness, his professor has scrawled “CULTURAL MYTH” in pencil. He wants my help widening his scope, figuring out what happiness is, so he can fix his paper.

“This is when I feel like the biggest dick,” I tell my friend Caleb, a poet and a composition teacher, afterward. “When I have to undermine students’ entire conception of the world, which is probably more well-adjusted than my own. As if I know what happiness is, as if I know better.” A lot of my students are business majors; one time, one of them, a sophomore finance major, helped explain my own investments to me. The following summer, he was making more money than I’ve ever made interning as an equity analyst.

I say to Caleb, “I’m not sure what we’re doing—claiming to make them happy or educated.”

“What was happiness for him?”

“Playing baseball.”

“I don’t think that’s happiness. What did you tell him?”

I tell Caleb I went with Aristotle’s definition of happiness: human flourishing, eudaimonia. Aristotle’s method to discover happiness was to determine what defines something—what makes it what it is—then figure out how to best realize that trait. Humans’ defining trait is rationality, so we’re happiest engaging intellectually. It’s a common justification for an academic life: it’s when we’re at our best as people! This is what Aristotle thinks, at least. But maybe baseball players are happiest playing baseball.

I didn’t state any of this explicitly to the student, of course. I just tried to tweak his method of inquiry, sway him over to my way of thinking for just a little bit, which I always worry about. The week before, without even realizing it, I re-framed a student’s paper topic about advertising and commodity fetishism. She was excited to learn the word commodity, so I just went with it. Suddenly, to my horror, I saw her diligently type out, “Commodity culture is a sham,” something I probably said. I hate these moments. Moments when I truly take up the mantle of academic instructor. When I see my own power and don’t want to claim it. When I realize that I want students to be like me as much as I want to tell them to run for their lives.

Caleb says, “Don’t they know? Happiness is talking about why happiness isn’t playing baseball. They should appreciate us more.”

 

*

I’m a different kind of wantrepreneur. I want the myths.

 

*

I often fantasize about being in the tank.

I walk in confident, with my head held high, like all the entrepreneurs. When they first walk in, they all know they have something special. Something the sharks will love. They have something that will make their dreams come true, that will save them.

I walk to the center of the room.

“Hello, sharks,” I say, just like on the show. Deferential, like I’m addressing royalty. I plant my feet on the oriental rug in the tank and prepare to pitch. Of course, I have no product, so I’m just standing there in front an empty table talking, explaining why I’m there, justifying my existence to them. I’m no different from the other entrepreneurs in this way.

In some of my fantasies, I just stand and freeze up. Kevin berates me.

“Time is money! Why are you wasting our time?!” he yells.

“You’re not even a wantrepreneur,” Mark says.

In some of my fantasies, I make a pitch for art or for truth, defend them like commodities. It’s not unlike a dissertation defense.Rachel1

Kevin once mocked a young entrepreneur’s ideals—an NYU student selling T-shirts with socially conscious facts on them—saying, “Wow, you’re gonna save the world?” I try to explain why I’m not like them, not an entrepreneur, though I don’t have an explanation for this.

“I like you…” Lori begins, except I know she wouldn’t.

Robert looks at me, all pity and disapproval, the father figure. “Keep following your passion,” he says gently, which he tells everyone in the tank.

In all of my fantasies, I’m too scared to indict them. I have fantasies-within-fantasies, where I say what I really want to say to them about the American Dream and their role in it. Wow, you’re gonna save the world? They’ve heard it all before, don’t react.

Sometimes I ask them why, as if it were a question they could answer.

***

Image credits: Featured image, image #2, image #3. image #4, image #5, image #6, image #7 provided by author.


Rachel Wilkinson's work appears in The Atlantic, Narratively, Vela and The Atlas Review, among others. She lives in Pittsburgh, where she received her MFA from the University of Pittsburgh. She is the nonfiction editor of Twelfth House Journal. More from this author →