Three founders from Maharashtra entered the Shark Tank Indian arena to start their company, Ezo, designed to help small shopkeepers find sales. The Sharks' panel, including Anupam Mittal, Namita Thapar, Ritesh Agarwal, Kunal Bal and Aman Gupta, listened intently as the founders announced their aim to reduce engagement in small businesses. However, the pitch quickly unraveled, revealing deeper problems.
The founders explained that their revenue model involved selling billing machines to shop owners and earning subscriptions. When asked if they checked for renewals, they admitted they hadn't been in business long. Despite this, they expected a revenue of Rs 30 crore, leaving the Sharks with a conundrum. A deep dive into their finances uncovered questionable accounting practices.
Namita Thapar broke down the difference between cash and accrual accounting for the group, emphasizing that the latter provides a clearer picture of a business' performance. Accrual accounting paints a more accurate picture of a business and is always the preferred method,” she stated bluntly.
Anupam Mittal, visibly unimpressed, remarked, “Puri dal hi kali hai boss”. He dismissed the founders' claims that their accounting choices were uninformed, saying, “You're a pro; Don't act like you don't know what you're doing. Namita agreed, calling it an issue of honesty rather than accounting.
Ritesh Agarwal and Namita Thapar walked away from the deal citing a lack of confidence in the business and advising the founders to correct their accounting practices. Acknowledging their business acumen, Aman Gupta said, “You want to break the subscription model in a country where even Amazon and Netflix are struggling? Don't make money from evil deeds.”