I enjoy the television show SHARK TANK and for my birthday's blog post I'll indulge myself in a simple comment thereon. The rules of the 'tank' provide that the entrepreneurs must get at least the amount of cash they ask for. When they come in and make their pitch, they may ask for, say, $100,000. If they do, then they may accept an offer from one of the sharks for that amount, or (if they're fortunate enough that the sharks end up bidding against one another) for more than that. But they cannot lower their offer to, say, $75,000. They either get their $100,000 or they leave empty handed. This may seem unrealistic. Why can the entrepreneurs not adjust to unexpected skepticism by lowering their own expectations on the fly? In a sense, though, they can: and the way in which they can do so is by lowering their implicit company valuation. When an entrepreneur walks into the "tank" to make his pitch, he might indeed ask for $100,000. But he'll al...
