Since its premiere in 2009, Shark Tank has kept a severe buzz going in the business world, letting people pitch their ideas to a panel of more-than-financially-solid investors. Even if you never get on the show, there are serious entrepreneurial lessons you can learn from it.
1. You need to do your research.
Even though you want to make a personal connection with your potential investors, you also need to show them you’ve got some evidence to back up what you’re saying. It shows that you are serious enough about your idea to look into the market and production and get some hard numbers. The people who have gotten the sharks to cut deals on the show have been the ones who have convinced the panel that they knew exactly what the odds were of a good return on investment, and who showed that they understood potential risks and how to mitigate them. After all, no investor wants to lose money. Always give your pitch prepared for a defense and anticipate what the investor might want to know in order to trust you with his funds.
2. Every pitch needs to be tailored.
When established companies make a product or come up with a service, they think long and hard about how they might market that product or service to different segments of the population. They design their campaigns around what’s unique to each group in order to trigger points of experience and empathy that could prompt a sale. Daymond John, for example, fashion entrepreneur from the show, knows what it is to build up from nothing and doesn’t ignore trying-to-make-it backstories. An investor is essentially just a big customer. If you want him to give you his money, you have to know which buttons to press that he’ll respond to.
3. Show potential value, not past success.
One of the biggest mistakes that people on Shark Tank make is that they offer up past sales to the investors. The reason this is a no-no is because investors don’t care about what you’ve done. They care about what you’re going to do. Show them that you’ve got a serious market that is likely sustainable in the future and that you’ve thought through how to get it to the consumer well. If you can do that, it doesn’t really matter if you’ve sold one unit or one million.
4. Advice can make a bad situation better.
The majority of the entrepreneurs who go on Shark Tank don’t get deals. They also don’t take the opportunity that stares them in the face to ask what they did wrong. Subsequently, they never get the chance to improve their product or service and make a pitch that will land the investments they need. If something doesn’t go quite right, don’t stress. Instead, ask for advice and learn.
5. Be passionate about what you’re doing.
Investors don’t just want good numbers and statistics behind your pitch. They also want some guarantee that you (or at least, a valued successor) will be willing to fight for the company they’ve invested in for years down the road. Lori Greiner, one of the most prolific entrepreneurs on the Shark Tank panel, said this in an interview with the Huffington Post: “I think that if you love what you do, you’re successful at it and everything else falls into place.”
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