I love the show, but I don't think it's ethical (and I wonder that it is even legal in Canada) to enter into a contract with someone who does not fully understand the language the agreement is written in. Like I said, a curious thought to wake up with on the Sunday morning of Thanksgiving weekend. However, it has prompted me to investigate further and I will blog the fruits of that research in the coming weeks.
As for today, I posted a survey on my blog (top right corner), which I hope that you will participate in. And I decided to throw out some of the vocabulary that makes up "money-talk" and see what you can do with it. Take a look at this list and see how many of these ten words you completely understand:
annual percentage rate
bond
compound interest
dividend
inflation
ETF or exchange traded fund
gross income
liquidity
portfolio
bond
compound interest
dividend
inflation
ETF or exchange traded fund
gross income
liquidity
portfolio
return
So how did you do? Are you fluent in money-talk or is it Greek to you? Either way, here are a couple of my favourite online financial dictionaries: The Money Belt by the Financial Consumer Agency of Canada and Investopedia. If you find some of other good ones, please post a link in the comment box below.
If money-talk is truly foreign and uncomfortable, remember that no matter what your financial fluency is today, it can be better tomorrow. Learning just one word a day could translate into real money gains in the future.
Copyright 2010. Laura Thomas. All Rights Reserved.
For reprint permission contact money@agentstory.net
I don't see why you think it is not ethical for the pitchers to give some of the profits to the financial experts in Dragon Den. 50% of making a deal work is knowing how to make it a financial success. Most great ideas get nowhere because there was not a good money person to direct the process. And they can hire a lawyer to read over any contract before they sign it to make sure they are not being taken advantage of.
ReplyDeleteI think about the grade one's in my daughter's 1-2 split French immersion class. I think about the brain-freeze that I get when her Quebecois teacher gives me instructions. I remember what it's like to negotiate with a beach vendor in Cabo over the price of a silver bracelet. I can get by in French and Spanish but I am nowhere near fluent.
ReplyDeleteI understand financial literacy to be the same, which is why I couldn't help but make my observation about Dragons' Den. Even when you have a translator (such as a lawyer to read over a contract for you) negotiations are risky when you don't really understand what is being said.
I like your blog, and agree this is a funny thought to wake up to! (I was thinking of Turkey...lots and lots of turkey...)
ReplyDeleteHowever, I must say I agree with Thyiela. Angel investment is important for early stage growth of a company - a bridge between the family and friends / grants and the venture capital world. When angel $ is involved, it means giving up a share of ownership in your company in some form. And angels typically exit the investment once the venture capital cash comes in and the company moves on to mid-range growth/IPO.
Although a pitch like as seen in Dragon's Den is pretty sensationalized(thanks reality tv), the idea of the angel investor becoming part owners is standard.
In a way I suppose you can almost look at it a bit like when anyone buys company shares/stocks. They become part owner of the company, may have voting on company business, and they can receive a share in the profits (dividends). I guess angels do so on a more amped up level...and usually provide mentoring along the way to bring the company to the next level.
I also agree that it is the responsibility of the "pitcher" to be reading any contracts (either themselves or with the help of a professional) and making an informed decision after the cameras stop rolling and reality sets back in. Just like anyone - never sign something you haven't read or don't understand! All the tricky stuff is in the fine print.