I had time to watch Shark Tank and in my hotel room during the recent trade shows (including an extra night stuck in Detroit on the way home).  I had never seen this ABC reality show, despite the fact that it’s been running since 2009. I must admit I didn’t love it enough to watch it five nights a week on CNBC, although that is apparently an option.

Still, I did think that the show had two important lessons to teach those of us starting or running our own business.  The first how to craft a good pitch (costumes and gifts for the “sharks” aside). If you are going to a bank to ask for money, you would do well to study some of the impressive presentations on Shark Tank — and to pay attention to the questions that the potential investors ask, as well as the advice they give in return. How would you answer if a potential investor or loan officer inquired about your other sources of funds, your advertising plans, or market research?

The second lesson is one that every ocean swimmer knows: avoid sharks. I realize that this may be a bit counter-intuitive, since I’m recommending that you watch a few episodes of the show. But there is a reason they’re called sharks. The money that comes from venture capitalists like these has all kinds of strings attached.  Giving up  percentage of the business is not the same as agreeing on an interest percentage on a loan.

The late Anita Roddick, founder of The Body Shop, learned this lesson early on. Within six months of opening her first store, she was eager to branch out—so eager, in fact, that she pledged 50% of her company to a man who willing to lend her the money she needed. In 2006, Ian McGlinn’s £3,000 investment was turned into £137 million when Dame Anita and her husband Gordon sold The Body Shop to L’Oreal for £652 million. "Giving away half the business is considered by many as the biggest mistake I have ever made," she commented, “but I don’t resent it. I needed the money, I needed it quickly, and Ian was the only one then who would give it to me.”

Most of us won’t end up selling our store for millions, so losing control of a large percentage of the business could be devastating. Before you decide to swim with the sharks, consider whether a more traditional small business loan, or an investment by family or friends at a fixed loan rate, might be a better source of funding.

Happy Retailing,

Carol “Orange” Schroeder