If you’re looking to raise venture capital for your business, ABC's hit reality TV show, "Shark Tank," is filled with valuable lessons. Coming up on its 11th season, the show features entrepreneurs pitching their businesses to a group of investors (the "Sharks"), who then decide whether or not they're willing to fund the startup.
As many entrepreneurs know, landing an investor deal isn't easy — in real life or on "Shark Tank." While some founders receive offers from the multi-millionaire business tycoons judging their ideas, others walk away empty-handed. Success is all about learning how to position and sell yourself to the right audience.
“Definitely focus on your origin story,” said Joel Clark, CEO of the phenomenally successful Kodiak Cakes, which sells its products on retail shelves nationwide. Clark recently told CO— that his 2014 trip to the Tank was partly the result of having a great story to tell. Clark began selling his mother’s homemade pancake mix out of a red wagon when he was 8. Last year, the company had $54 million in sales. Though Kodiak Cakes didn’t get a deal on Shark Tank, the publicity helped boost the company’s profile and grow the business.
Based on advice from past "Shark Tank" contestants and some of the Sharks themselves, here are six important pitching lessons you can learn from this popular show.
[Read: 3 Things You Need to Know About Raising Venture Capital]
Know the problem you solve
Your product or service should be positioned as something that uniquely solves a problem or improves your customers' lives. When Chris Gronkowski of Ice Shaker pitched to the Sharks, he started by discussing the issues he experienced with other protein shakers and blenders, and how their shaker eliminated all of those concerns. Demonstrating how your business solves a problem positions your product as a necessity rather than a "want," making backers more willing to invest in your solution.
We've all seen people on the show whose business idea wasn’t exactly going to save the world, but the passion and integrity that entrepreneur showed made us root for them.
Ryan Bethencourt, CEO of Wild Earth and former 'Shark Tank' contestant
Stand your ground
College Hunks Hauling Junk and Moving were featured on the very first episode of “Shark Tank.” The founders were there to pitch a spinoff of their already successful business. In the end, though, they didn’t take the deal offered because it required them to give up full ownership of their College Hunks franchise.
Co-founder Omar Soliman says that if you’re lucky enough to get on the show, it’s important to be ready to stand strong. “Stand your ground and be confident,” he told CO—. “Investors like the Sharks will always try and poke holes in your business. If you lose confidence in the pitch you could lose a deal. Remember, you are the expert and your brand holds the keys!
College Hunks co-founder and president Nick Friedman, added, “Remember to have fun and be energetic. This is for television, which is entertainment after all. Also know your numbers and talking points ahead of time, and don’t forget to breath. If the sharks smell blood, they will pounce.”
Numbers matter
It’s important to know your numbers — and to be honest about them. According to judge Robert Herjavec, the Sharks will write off entrepreneurs if they don’t know their numbers (total sales, annual revenue, net profit, etc.) or if they give the wrong valuation. After failing to land a deal, former contestant Kelly Costello reflected, "I went onto the show thinking that my passion and unique products would be all the Sharks needed and neglected to spend time on the cold hard facts of my company’s current and potential profits."
Be passionate — but don’t let your emotions take over
While passion is important, "you can't let your emotions control the moment," Herjavec says. "If we tell you there’s a mistake in how you’re running your business, you’d better listen."
It's one thing to feel upset or defensive about constructive criticism, but an emotional outburst could signal to investors that you’re driven by feelings rather than rationality. This could negatively impact their impression of you and your ability to make important decisions regarding your business.
Be your authentic self
While you may have a great product or service, potential backers are investing first and foremost in you. People are drawn to authenticity, and investors are more likely to sign if they can trust you as both a person and an entrepreneur.
"We've all seen people on the show whose business idea wasn’t exactly going to save the world, but the passion and integrity that entrepreneur showed made us root for them," said former contestant Ryan Bethencourt.
Don’t try to do it all
Entrepreneurs often wear many hats, and some may try to do everything themselves to save money or maintain control of the business. But judge Kevin O’Leary has warned "Shark Tank" contestants that going it alone isn't the best path: "My partners […] taught me that in order to create wealth, I needed to pair up with people whose strengths compensated for my weaknesses," O’Leary explained.
Whether it’s finding a partner whose skills are complementary to yours, or simply outsourcing help on specific tasks, working with others can take your business to the next level.
Rejection isn’t always the end of the road
Rejection from investors isn't always the end of the road. While you may not land a deal, a meeting could open the door to other opportunities. For example, Jamie Siminoff, creator of Ring, benefited from a huge exposure boost from being on the show.
"In terms of dollars, it was worth millions, but it also brought and provided an incredible amount of credibility and awareness for us with industry partners," Siminoff shared.
A rejection can also serve as a learning opportunity to help you the next time.
Raising capital and meeting with investors can seem overwhelming. But going in with a strong understanding of yourself and your business, keeping a level head and asking for help when you need it will go a long way. And if at first you don’t succeed, keep trying — you never know where it will lead you.
[Read: 10 ‘Shark Tank’ Businesses That Made It Big]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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