Business
Want to Understand America? Watch ‘Shark Tank.’
One day in late June, a panel of investors entertained business ideas from around the country. A kitschy advent calendar. A fancy mini-fridge for drinks. A flashlight that emits beams from multiple angles. A machine that grows mushrooms. Bendable cups. Pet plants (for you, not your cat).
This was the Los Angeles set of “Shark Tank,” the ABC show that for 15 years has turned business negotiation into entertainment. Aspiring entrepreneurs use hustle, gross margins and cringe-worthy pitches to pry money from the so-called Sharks in exchange for a stake in their companies.
On one level, “Shark Tank” is your basic reality TV show. The pitches, which last about 45 minutes, are edited to snappy 12- to 15-minute segments with music scored for suspense over tight shots of bug-eyed, sweaty supplicants. Some founders leave the tank defeated, humiliated or in tears. Others leave triumphant with handshake deals. Stories about overcoming struggle and self-doubt feel calibrated to make you cry.
With a short window to impress the Sharks, contestants make the most of “hello.”
ABC
But if you watch the show as I did — most of its 15 seasons in one year — you might be struck by something else: the way it reflects the shifting contours of the American economy. The show started in August 2009, in the pit of the Great Recession. Over the next decade and a half, 1,275 people pitched their ideas on air. The comfort food and DVDs featured in those first years were replaced by the rise of online direct-to-consumer businesses, the allure of Silicon Valley and its build-at-all-costs mentality, and then the shock of the pandemic and the ingenuity that came out of it.
“Shark Tank” Over the Years
Season 1 (2009-10)
The show premiered against the backdrop of the Great Recession. Small business owners, like Tod Wilson, shared stories of struggle and overcoming adversity.
Season 3 (2012)
The economy was getting better and so was the show. Mark Cuban joined and raised the tempo and the stakes of the negotiations.
Season 4 (2012-2013)
Scrub Daddy, the smiley face sponge, makes its debut. Shark Lori Greiner, also known as the “QVC Queen,” helps turn it into one of the show’s most recognizable products.
Season 5 (2013-14)
This season brought items with a tech spin, like DoorBot. This object became Ring, which Amazon later acquired for more than $1 billion.
Season 6 (2014-15)
The founders of Bombas, the sock company, got a grilling for their high valuation. But the company has since become a huge success.
You can also see the emergence of consumer trends: online dating (the Coffee Meets Bagel app); combining capitalism with social good (Bombas socks); democratizing professional services (Everlywell home medical tests); reimagining personal care products (Dude Wipes). And, of course, the show has featured plenty of minimally useful, niche gimmicks that are destined to collect dust.
“‘Shark Tank’ is not a game show,” said Kevin O’Leary, a cutthroat investor known sarcastically in the tank as Mr. Wonderful. “It’s real life. It’s real investing, real money. And it reflects the real economy.”
It is also real exposure. Perhaps the show’s most important role in the entrepreneurial economy is not the advice or money the Sharks dispense, but to serve as a platform for the most American of business strategies: shameless self-promotion.
That exposure might be even more relevant now. As the show enters its 16th season on Oct. 18, the economy seems good on paper, but feels bad for many Americans, including entrepreneurs. Yes, inflation is starting to ease and interest rates are slowly coming down, but the economy still feels in suspense.
The show has been adjusting over the past few years. The Sharks are less excited about businesses with big valuations and more interested in discovering and funding smaller start-ups, said Barbara Corcoran, founder of the Corcoran Group who got rich selling Manhattan real estate and has appeared as a Shark since the show’s first season. “So there are a lot of low asks, which I really like because I love to get on the ground floor with people,” she told me.
These “mom-and-pa type people,” as Ms. Corcoran calls them, also make for better TV. Where “Shark Tank” is concerned, good TV comes from stoking a belief — some might call it a myth — that anybody with a good idea and some moxie can make it in America. Having difficulty brushing your daughter’s curly hair? A flash of genius provides the solution and you create a hairbrush company! It’s the American dream.
In fact, the Sharks invoked the American dream so often in my interviews with them that it felt like they were trying to make a sale. Mark Cuban, who is leaving the show after this season, put it this way: “The idea that maybe we had a little bit to do with amplifying entrepreneurship and making the American dream stronger, that’s pretty damn cool, you know?”
From Bakeries to Bots
The “Shark Tank” concept grew out of a Japanese show called “Tigers of Money.” It spread to Britain and Canada as “Dragons’ Den,” and in 2009, Mark Burnett, the television producer known for hit shows like “The Apprentice” and “Survivor,” adapted the idea for the United States.
It was, in some ways, exactly the wrong moment for a show about making it in business. “Shark Tank” debuted less than a year after the subprime mortgage crisis devastated the global economy. The investment firm Lehman Brothers had gone belly up and banks were not lending. Retail sales cratered. But the investors chosen as Sharks saw the show as a new way to make money. “It’s ’08, nobody’s buying more clothes and they can’t pay their rent or mortgage,” said Daymond John, the founder of apparel brand FUBU. “I went on the show to diversify my portfolio.”
That first season Mr. John and the other Sharks were pitched by a lot of sole proprietors: a woman opening a plus-size clothing boutique in Houston, a caregiver who created an elephant-shaped medicine dispenser. The money offered was $100,000 here, $50,000 there. Small potatoes.
Every pitch leads to an ask, a dollars-and-percent offer that starts the negotiation with the Sharks.
ABC
The producers and casting department recruited entrepreneurs by looking at local newspapers or relying on word of mouth. Tod Wilson, the first person to pitch in the “tank,” was one of them. He owned a bakery that sold sweet potato pies in Somerset, N.J., and wanted to expand nationwide.
“I had a couple small loans with some local community banks, but nobody was lending any more money,” Mr. Wilson said. On the show, Mr. John and Ms. Corcoran offered him a deal.
By the third season, in 2012, it was time to feel optimistic again. Businesses were making it pleasant to buy stuff online that you usually need to feel and touch — like clothes and eyeglasses. Uber, Airbnb and WeWork, with their outsize valuations, emboldened many companies to think they could hit it big. Instagram and Twitter, along with the ubiquity of Amazon Marketplace, offered new ways to sell goods.
Shark Tank, too, wanted a piece of Silicon Valley.
Producers recruited more ambitious companies through open calls held at Las Vegas convention centers and pitch sessions hosted on college campuses. Sweet potato pies gave way to apps and cloud-based solutions. In episode after episode, viewers saw entrepreneurship as a pathway to financial success and autonomy. The show was growing in popularity, and by Season 6 in 2014, had reached 9.1 million people tuning in per episode.
“The idea that anybody can make it into that top echelon, I think, is an incredibly American mind set,” said Angela Lee, who teaches at Columbia Business School.
In the first season, the average valuation for a company that appeared on the show was $376,000; a decade later, it had ballooned to $2.4 million, according to a database compiled by Halle Tecco, an adjunct professor at Columbia Business School who tracked the first 10 seasons of “Shark Tank.” The average amount the Sharks agreed to invest nearly doubled.
The Sharks didn’t always spot the winners. In 2013, the producers reached out to Jamie Siminoff, a successful serial entrepreneur who was tinkering in his garage with a product he called DoorBot.
Like all the entrepreneurs who appear on the show, Mr. Siminoff walked down a long hallway to the double doors that open up to the awaiting Sharks. But instead of those doors opening, Mr. Siminoff knocked three times, prompting Mr. Cuban to ask, “Who’s there?” After some back and forth, the door opened and Mr. Siminoff said, “Wouldn’t it have been nice to know who was behind the door before you let me in?”
He demonstrated how, with a smartphone and his video doorbell, anyone could see who was standing at their door. He had already sold more than $1 million of the devices through his own website alone.
The ensuing negotiations made for good TV. Four Sharks declined to invest, leaving only Mr. O’Leary. He offered Mr. Siminoff an infusion of cash in return for a percentage of every sale. Mr. Siminoff balked, saying those payments would bleed him of cash when he needed it most. With the suspense soundtrack playing underneath, Mr. Siminoff responded: “Respectfully, Mr. Wonderful, we’re going to decline.”
A year later, Mr. Siminoff renamed his business Ring, and four years after that, Amazon bought it for more than $1 billion.
At the time of his “Shark Tank” appearance, Mr. Siminoff “was actually broke, so I did want to get money,” he told me recently. “I didn’t get money, but I got awareness and credibility, which was amazing. I think if it wasn’t for ‘Shark Tank,’ I don’t think Ring would exist today.”
Mr. Siminoff came back as a guest shark in 2018; all the Sharks stood up and clapped.
The QVC Economy
Companies appearing on “Shark Tank” have reinvented the wheel (though the Smart Tire Company didn’t convince the Sharks it was needed). One contender confidently asserted that he had created a “vortex chamber” that harnesses the Earth’s rotation to create electricity. (The Sharks didn’t get it either. He left empty-handed.) The Sharks were pitched a wakeboard-like device that, when attached to an airplane, would allow people to fly. (No thanks. Too much of a liability risk.)
There are a lot of crazy inventions out there.
There are some pretty mind-numbing ones, too (insurance, enterprise software, energy production) that power the economy. But those kinds of companies are rarely reflected on “Shark Tank” for one simple reason: They don’t make for good TV.
Robert Herjavec, a Shark since the first season, has an expertise in cybersecurity. He likes to tell the story of taking Mr. Burnett out for dinner in the show’s early years and asking why producers weren’t bringing to the sound stage more of the back-end companies he gravitated toward.
As Mr. Herjavec recalls, Mr. Burnett told him, “I don’t know how to say this to you, but what you do is boring. You’re missing the entire point of the show.”
That dinner, Mr. Herjavec says, changed his perspective. “I need to invest in things that the consumer is going to get excited about,” he said.
What people get excited about, it turns out, is merchandise that you might purchase impulsively in the checkout line at TJ Maxx. Or, in Target or on the QVC shopping network, platforms where Lori Greiner, one of the mainstay Sharks, has strong connections. “What is a winning product? What do people want? Those are the basics,” Ms. Greiner said.
“Shark Tank” Over the Years
Season 7 (2015-16)
Simply Fit Board, an exercise board created by a mother-daughter duo, clinched a deal with Shark Lori Greiner. The founders said they did a million dollars in sales in the 24 hours after the show aired.
Season 11 (2019-20)
After 10 years, entrepreneurs recognize the value of “Shark Tank” as a potential marketing platform for their products.
Season 12 (2020-21)
Scores of small businesses closed during the pandemic, but “Shark Tank” celebrated the founders who were able to pivot, like Foam Party Hats.
Season 15 (2023-24)
More first-time entrepreneurs stepped onto the set, making the show feel more like the early seasons.
More than two-thirds of the U.S. economy is driven by consumer spending, and while that includes less tangible things like auto insurance, Ms. Greiner leans into the relatable. She has backed “Shark Tank” companies with some of the biggest sales: Scrub Daddy, the smiley-faced sponge; Simply Fit, the exercise balance board; and the Squatty Potty toilet stool.
Mr. Herjavec learned his lesson. Soon after his dinner with Mr. Burnett, he took an equity stake in what he says is his most memorable investment: Tipsy Elves, a company that makes ugly Christmas sweaters. It has done about $200 million in sales.
What You Don’t See in the Tank
Venture capitalists praise the show for introducing the masses to business concepts like “landed costs” and “scaling.” The show has also helped entrepreneurs find out what their company is worth.
Founders coming from small towns who might not have deep connections to major investors can use “Shark Tank” as a barometer, said Michael Jones, founding partner of Science Inc, a Los Angeles-based investment firm which has poured money into consumer brands like the canned water company Liquid Death and Dollar Shave Club.
“You can get a sense of what terms at least the Sharks think are normal,” he said.
But, venture capitalists are often quick to add, the show does not reveal the nitty-gritty of the negotiation process. The painstaking effort of combing through a company’s financials and ownership structure and analyzing the market sector happens off camera.
During that process, deals agreed to during the taping might be restructured or the founders or Sharks are allowed to walk away. According to an 2023 analysis from Forbes, roughly half of the deals clinched on the show never actually closed.
“They’re a platform to promote entrepreneurship and small businesses,” said Taryn Jones Laeben, founder of early-stage advisory and investment firm IRL Ventures, “more than they are a direct window into the venture capital world.”
Tod Wilson, the pie maker who appeared on the very first episode and received a handshake deal, decided not to go through with the offer. He eventually secured a bank loan. After some ups and downs, he continues to sell in Wegman’s and ShopRite supermarkets as well as online.
He beat the odds. While the show promotes the upside of the American dream, many entrepreneurs face constant challenges to stay in business. Nearly half of all small businesses fail within the first five years.
“I don’t think people know how hard it is to be one of the ones that have made it,” Ms. Lee, the Columbia Business School professor, said. “The problem with social media and everything is that we only hear about the success stories.”
Marketing Muscle
Ms. Lee is also the founder of 37 Angels, an early-stage investment firm. She says she has done due diligence on dozens of companies that have appeared on “Shark Tank.” None of them, she says, described the show primarily as way to get funding. It was a way to market their products.
With nearly 4 million viewers, the show has become a cultural phenomenon. Dozens of blogs and podcasts are dedicated to the show and hundreds of memes on social media reference it (“Hello sharks. Today I am seeking $100,000 so I can just vibe for a bit”). Educators like Ms. Lee use episodes as case studies, and educational programs like Junior Achievement use it to teach students about how to start businesses.
Sarah Paiji Yoo, one of the founders of Blueland, which makes sustainable cleaning products, didn’t really need an investment. By the time she appeared on the show in 2019, she had already raised $3 million in venture capital. The funding she got from Mr. O’Leary was about “driving more awareness of our product,” and credibility, she told me later. Her company has now done more than $200 million in sales.
Dave Heath, co-founder of Bombas, the sock retailer, described the show as a “megaphone.” He appeared in 2014, and two months later his company sold $1.2 million worth of socks. Bombas has now surpassed $1.7 billion in lifetime revenue, making it the show’s most successful company.
Reinventing the wheel isn’t necessary to impress the Sharks. But some have tried.
ABC
The possibility of television exposure also piques the interest of traditional retailers. Ann Crady Weiss, the co-founder of Hatch, was scheduled to tape a “Shark Tank” segment with her husband to pitch a baby changing pad that doubled as a scale. Before the filming, she flew out to Target’s headquarters in Minneapolis to meet a buyer.
“I decided to leverage the fact that we were going to be on TV,” Ms. Weiss recounted. “The buyer gave us a shot at Target because of the ‘Shark Tank’ appearance.”
“We turn you into a rock star and you become part of the ‘Shark Tank’ culture and the lore of ‘Shark Tank’,” said Mr. O’Leary. “Your deal becomes legend and stays in syndication for decades. What venture capital can do that?”
On the weekend in June, toward the end of the second day of “Shark Tank” tapings, a young man in a black T-shirt burst through the set’s familiar doors to pitch his restaurant in Queens. He had saved $600,000, which impressed the Sharks, who offered encouragement. At one point, Mr. O’Leary said, “you should be mentoring me.”
Near the end of his time in front of them, Mr. John stood up, walked over and handed him his personal phone number.
“This is what I wanted,” the founder said before walking off.
Tesla charging stations were set ablaze near Boston on Monday. Shots were fired at a Tesla dealership in Oregon after midnight on Thursday. Arrests were made at a nonviolent protest at a Tesla dealership in Lower Manhattan on Saturday.
The electric car company Tesla increasingly found itself in police blotters across the country this week, more than seven weeks after President Trump’s second inauguration swept Tesla’s chief executive, Elon Musk, into the administration as a senior adviser to the president.
Mr. Musk, 53, is drawing increasing backlash for his sweeping cuts to federal agencies, a result of the newly formed cost-cutting initiative Mr. Musk has labeled the Department of Government Efficiency.
During a demonstration on Saturday at a gleaming Tesla showroom in the West Village neighborhood of Manhattan, protesters joined in chants of “Nobody voted for Elon Musk” and “Oligarchs out, democracy in.” One held a sign saying, “Send Musk to Mars Now!!” (Mr. Musk also owns SpaceX.)
Several hundred protesters remained there for two hours, organizers said, blocking entrances and shutting down the dealership.
Some protesters entered the building, and six were arrested, said Alice Hu, an organizer. The New York Police Department said that five people had been issued summonses for disorderly conduct, while one faced a charge of resisting arrest.
The demonstration came at the end of a week in which employees at a Tesla dealership in Tigard, Ore., near Portland, arrived at work on Thursday and found gunshot damage.
The police said they believed that at least seven shots had been fired, damaging three cars and shattering windows. One bullet went through a wall and into a computer monitor, the police said.
And on Monday, seven Tesla charging stations were intentionally set on fire at a shopping center outside Boston, the police said. In another Boston suburb, the police arrested a man on Wednesday who had tagged six Tesla vehicles with decals of Mr. Musk in a raised-arm pose.
The police in Brookline, Mass. released a video of the man saying that he had the right to deface the cars because it was his “free speech.” When Mr. Musk saw the video, he responded, “Damaging the property of others, aka vandalism, is not free speech!”
Tesla did not respond to a request for comment on Saturday about the protest and vandalism.
In Colorado on Thursday, federal prosecutors charged a person with malicious destruction of property. She is accused of spray-painting “Nazi” onto the side of a Tesla dealership and planting a Molotov cocktail near a vehicle, according to a news release from the United States attorney in Colorado.
At Mr. Trump’s inauguration, Mr. Musk slapped his right hand on his chest before shooting his arm diagonally upward, palm facing down, a gesture that resembled a salute used in Nazi Germany and fascist Italy. But Mr. Musk responded in a post on X: “The ‘everyone is Hitler’ attack is sooo tired.”
On Tuesday in Salem, Ore., a man was arrested and charged with setting fires in front of a Tesla dealership and to a Tesla car in the lot on the day of the inauguration, causing at least $500,000 worth of damage, the authorities said. He was also charged with firing shots at the same dealership one month later.
The protest at the showroom in Manhattan was in one of the city’s most liberal neighborhoods. Protesters have gathered there for weeks, with each weekend’s protest larger than the previous one, according to State Senator Brad Hoylman-Sigal, a Democrat who represents the district.
He said that it was “cathartic for New Yorkers to go to the streets” and that it was important for Mr. Musk and Mr. Trump to “see that cutting the federal government off at its knees is going to hurt a lot of people.”
Tesla itself has been the subject of the backlash, with some vehicle owners now selling their cars and trucks to distance themselves from Mr. Musk and his political activities.
“I’m sort of embarrassed to be seen in that car now,” one owner told The New York Times before trading in the car.
The anger against Mr. Musk this week also crossed borders.
In Berlin on Tuesday, several fires broke out at a construction site for the expansion of a Tesla factory. The police in Germany said that they were investigating it as an arson.
And in France, a dozen Tesla cars were set on fire near the southern city of Toulouse on Sunday night. The blaze was “not at all accidental,” the prosecutor’s office said.
A top State Farm executive was fired this week after saying the insurer’s California rate hikes are “kind of” orchestrated and after making disparaging remarks about Pacific Palisades homeowners that were caught on an undercover video.
Haden Kirkpatrick, State Farm Mutual’s vice president for innovation and venture capital, was recorded saying that the request by its California subsidiary for rate hikes was “kind of” orchestrated “but not in the way you would think,” according to a video published by O’Keefe Media Group, a conservative outlet.
“Our people look at this and say, ‘S—, we’ve got like maybe $5 billion that we’re short if something happens.’ We’ll go to the Department of Insurance and say, ‘We’re overexposed here, you have to let us catch up our [rates]’. … He’ll say ‘Nah.’ And we’ll say, ‘OK, then we are going to cancel these policies,’ ” Kirkpatrick said in the video, recorded surreptitiously in January after the fires.
State Farm General, the subsidiary and California’s largest home insurer, has filed for an emergency 22% rate hike for its homeowners policies, citing the fires and a $5-billion decline in its surplus account over the last decade. The insurer has said it is now left with just over $1 billion in surplus to handle another big catastrophe.
That request was the subject of a recent hearing with Insurance Commissioner Ricardo Lara, who initially rejected the hike but agreed to consider more evidence.
During the meeting, a State Farm executive told Lara that without the rate hike the company “may have to take actions that we otherwise don’t want to do,” according to a transcript of the meeting.
The company has estimated the Pacific Palisades, Eaton and other fires on Jan. 7 will cost it more than $7 billion, though with reinsurance its net losses will be closer to $600 million.
In response to the video, Michael Soller, a spokesperson for Lara, said, “We want answers from State Farm. This only raises more questions.”
Kirkpatrick also is recorded saying that homes should not have been built in Pacific Palisades but that residents want to have “natural areas around them for their ego,” calling the area “a f— desert.”
He further said he tasked the company’s HR team to create a year “2040” workforce that is more “Hispanic and Latino,” which he said was being “biased … away from my own kind.”
State Farm released a statement that “the individual in the video is no longer associated with State Farm” and his assertions are “inaccurate and in no way represent the views of State Farm. They do not reflect our position regarding the victims of this tragedy, the commitment we have demonstrated to the people of California, or our hiring practices across the company.”
Kirkpatrick said that the company fired him for making the remarks, which he said were recorded on a Tinder date in late January that he now believes was a setup. He otherwise declined to comment.
Los Angeles advocacy group Consumer Watchdog sent a letter Thursday to Lara calling on the commissioner to investigate the unvarnished remarks, which it said “suggest that State Farm is not simply reacting to financial risk but is deliberately using cancellations and the threat of future cancellations to pressure the Department of Insurance for rate increases.”
James O’Keefe is the founder and chief executive of O’Keefe Media Group, which publishes undercover videos provided by “citizen journalists” to “expose corruption, abuse, lies hidden from public view.”
The conservative activist previously founded Project Veritas, which also published undercover videos, but has been criticized for deceptive editing.
In 2013, O’Keefe agreed to pay $100,000 to settle a lawsuit filed by a former employee of the community organizing group ACORN, who had been depicted in an undercover video apparently offering to help smuggle underage girls into the U.S. to act as prostitutes. The employee said he had reported O’Keefe to police for proposing an illegal act prior to the video’s airing.
Nearly a month has passed since President Trump last spoke publicly of his desire to kill the carried interest loophole. (Yes, we know, some of you don’t consider it a “loophole.”) And yet the private equity industry, which stands to lose big if the president upends the tax break, is still bracing for a fight.
This is the biggest challenge to the provision since it was nearly neutered three years ago under former President Joe Biden, Grady McGregor writes for DealBook.
A reminder: the carried interest rule means that executives at hedge funds and P.E. and venture capital firms pay roughly 20 percent tax on their profits, a rate that’s so low it’s drawn criticism from Warren Buffett and from progressive senators like Elizabeth Warren, Democrat of Massachusetts.
One Washington lawyer described the lobbying effort to DealBook as “significant,” a sign of the escalating stakes.
Consider what’s happened in the past month: The American Investment Council, the private equity lobbying group, is reportedly circulating memos on Capitol Hill reminding lawmakers that private equity is a jobs creator. Venture capitalists, seemingly omnipresent in Trump’s Washington, grumble that they have to keep returning to Congress to “educate lawmakers” about the rule’s benefits. So-called free market groups, meanwhile, have banded together to ask Congress to maintain the status quo.
“They’ll fight tooth-and-nail on any sort of change,” said Jessica Millett, a tax partner at Hogan Lovells.
The carried interest lobby is made up of wealthy real estate, venture capital and private equity groups, including Blackstone and the Carlyle Group. The American Investment Council, the National Venture Capital Association, and the Real Estate Roundtable have long gone to great lengths to defend their favorite loophole.
“It’s really an evergreen point of contention for these trade groups,” Jonathan Choi, a law professor at the University of Southern California, told DealBook.
What’s different this time: It’s hard to decipher how serious Trump is about killing it. Trump has long railed against carried interest, saying a decade ago that hedge fund managers exploiting the tax code were “getting away with murder.”
Behind the numbers: Eliminating carried interest would save the government an estimated $14 billion over 10 years, according to the nonpartisan Congressional Budget Office. Trump is on the hunt for far bigger savings if he is to pass his “big, beautiful” tax bill in coming months without blowing up the deficit.
Trump wanted to kill carried interest in his 2017 tax bill, only to give up amid opposition from lobbyists and Republican lawmakers, said Victor Fleischer, a law professor at the University of California, Irvine.
And now? “People think that it’s cheap talk,” Fleischer said.
But there are some in Democratic circles who believe that Trump may be more serious now than he was in 2017, DealBook hears — not least because those are the signals that they’re getting from the White House.
Trump’s disdain for carried interest is a rare fracture between him and Republican lawmakers. Traditionally, Democrats have been behind efforts to kill it, and when Trump renewed his call to eliminate carried interest this month, congressional Democrats — not Republicans — were ready with stand-alone bills to do just that.
But Trump may finally be eroding G.O.P. unity. Republican senators John Cornyn of Texas and Thom Tillis of North Carolina, both members of the Senate Finance Committee, said in recent weeks that they were open to considering changes to the rule.
The last threat to carried interest came in 2022 when former President Joe Biden’s Inflation Reduction Act included a provision to kill it. But before the vote, lobbyists bombarded the office of Senator Kyrsten Sinema, the former Democrat (and then independent) of Arizona, with calls urging her to vote against it. Sinema ultimately voted for the bill, but only after carried interest was spared.
Lobbyists worry about G.O.P. defections, but see holding Republicans as easier than the last go around when they had to flip a pivotal on-the-fence senator. “They don’t need a Sinema to save them,” said Fleischer.
Short of killing the rule, Congress could reform it as a way to pacify Trump. Hogan Lovells’s Millett said there’s significant industry concern that Congress will gut much of the rule’s usefulness by including measures like extending the qualifying holding period from three years to five years before the carried interest tax break kicks in. Such an extension could scramble the way these firms do business. Private equity firms, for one, are often able to hold onto investments for five to eight years, Millett said.
Fleischer, the law professor, kick-started the debate on carried interest two decades ago when he detailed how the provision works in a widely read academic paper. Reform or no reform, he believes the loophole is here to stay.
It “will outlive us all,” he said.
IN CASE YOU MISSED IT
The labor market continued its steady growth. The nonfarm payrolls report showed employers had added 151,000 jobs last month, roughly in line with Wall Street expectations, and extending the job-growth streak to 50 months. That said, the effects of the Elon Musk-led job cuts by his Department of Government Efficiency will likely not show up in the labor market data for another month or two.
Tariff uncertainty prompts a major stock sell-off. Despite yesterday’s late-afternoon rebound, the S&P 500 ended the week sharply lower. A variety of factors have spooked investors, including fears of a downturn and concerns that President Trump’s on-again-off-again tariffs policy will create a major disruption to global trade. A recap: Trump gave Mexico and Canada a partial tariff reprieve — exempting levies for one month on products covered by the U.S.-Mexico-Canada Agreement, the trade pact Trump signed in his first term. But more levies, including on aluminum and steel, are set to go into effect next week.
Elon Musk blew up at Cabinet officials at a White House meeting. One of his targets was Marco Rubio, Maggie Haberman and Jonathan Swan report for The Times. The tech mogul turned President Trump’s cutter-in-chief fumed that the secretary of state had fired “nobody.” Trump eventually defended Rubio, and set ground rules. Cabinet chiefs are to run their departments, and Musk is to act as an adviser, the first clear sign the president is willing to put limits on the billionaire’s power in Washington.
Several tech start-ups weigh going public. CoreWeave, a seller of cloud-based Nvidia processing power, filed to go public on Monday, putting itself in position to become the year’s first major technology I.P.O. (The company denied a report that Microsoft, by far its biggest customer, was shedding some of its contracts with the start-up.) Other companies have also talked with bankers about following suit, DealBook’s Lauren Hirsch and The Times’s Mike Isaac reported, including Discord, the social chat app, and StubHub, the ticketing software company.
The future of news looks niche
In 2013, Jessica Lessin, a reporter at The Wall Street Journal, left the paper to start a competing publication, The Information.
A few years later, her fledgling newsroom had grown to nearly two dozen reporters and editors and booked more than $20 million in sales, as she revealed in a profile I wrote for The Times’s Sunday Business. She says she has since doubled her editorial staff and continued to stay profitable, with revenue growing 30 percent in 2024 over the previous year.
But it’s her investments outside of The Information that are gaining attention these days.
Her company Lessin Media has put money into Semafor, The Ankler, the former Business Insider editor Nicholas Carlson’s Dynamo, Kevin Delaney’s Charter Works and other titles at a time when the news business appears bleaker than before. Lessin, however, is optimistic.
I caught up with the entrepreneur about her latest media bet, the tennis publication Racquet magazine, and what she thinks about the changing news landscape. This interview has been edited and condensed. (An extended version is available here.)
This investment seems different from your others. How did you come to it?
I actually got introduced to Racquet by a number of fans of the magazine. And it was like the weirdest experience, because I was reading the magazine, and then I wanted to buy, like, all the clothes in the magazine. I went to the website, and I wanted to buy all the merch. And they’re hosting an event at the U.S. Open. And I was like I want to go to that. And I want to read this great profile about the mental coach behind the world No. 1 tennis player.
This sounds like it was something that just struck you personally. I assumed you’d be more focused on sales and market size and margin.
It’s absolutely both. I’m absolutely all about revenue and controlling your destiny and direct subscription revenue, and that being the true north.
I’ve also always been about that founder that has the real expertise. And I think big media companies dismiss the niches. They think they’re too small. Across all of these investments, the criteria I’m looking for is there’s got to be real revenue and a revenue model that is direct and user-driven where the brands can control their own destiny. But also a very passionate founder.
Subscriptions are a big part of your media thesis. Do all the companies you invest in have that component?
Not all do. You know Nich Carlson’s new company, Dynamo, that I invested in, I don’t think they do yet, but all the companies have plans and road maps.
You mentioned that big media companies are missing the picture on niche publications. Is that the future of news? Or at least one way to be successful?
Yes, absolutely.
Are legacy newsrooms too focused on the old model?
I do think that many of the large media organizations haven’t gotten the memo fully. I mean, it’s fascinating to watch The Wall Street Journal integrate its tech coverage with its media coverage.
You’re talking about how The Journal recently cut some tech reporters and combined it with the media team.
Yeah. Of course, it comes in a landscape where there have been a lot of layoffs across different teams and publications and it’s very sad. It’s my alma mater, there are wonderful people there. But what’s so interesting to me is the idea of consolidating different thematic areas.
At The Information, our formula is just very different. It’s going very, very deep into subject matters, into beat reporting. I think the most ambitious, world changing, impactful stories come from gathering string around companies and people and areas of expertise. And I worry, because I see a lot of other newsrooms with very talented reporters put those reporters on very broad and enterprise-like beats. How can we hold companies and leaders accountable without that kind of reporting day in and day out?
You’ve invested in seven media start-ups. Are you going to do a roll up?
I am very actively trying to do deals that would enhance The Information and that are related to it — being the authority on tech — so rolling up things like that within The Information, absolutely. But most of our investments don’t fit into that category. It’s just me believing so much in the founder and what they’re building. But I am absolutely a believer that there will be opportunities for The Information to acquire a number of companies in a lot of different areas.
The big media story right now is The Washington Post, and since we’re talking about investment opportunities, my old boss, Kara Swisher, is out there trying to get people together to buy it. What do you think?
I texted her when I saw it, and I was like, “You go!” I am all for passionate journalists trying to help shape the future of news businesses. She’s certainly one of those. I think she’s also a pundit, and I think that can get in the way of some types of journalism. But for people who really love news and love brands and want to shape them, that’s the kind of transformation that’s going to serve readers really well. But there’s no way Jeff Bezos is going to sell The Washington Post.
Do you know something?
I have no inside information. I just think Jeff Bezos is finally flexing a little, and by that I mean his announcement that the opinion pages would now primarily reflect “free markets and personal liberties” or however he said it.
Do you think it was a good move?
I do believe that as the owner of a publication it makes sense for them to shape a point of view of their opinion pages. But it’s way too early to tell.
Let’s see what he writes.
Yeah. And that’s not a move you make if you’re trying to offload something. That’s a move you make when you are establishing yourself as a proprietor. He’s really digging in.
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