Recently I appeared on a television show coaching viewers on how to pitch to Shark Tank. Plenty of aspiring entrepreneurs dream about the opportunity to pitch some of the most successful business minds in the country. In comparison, only a few small business owners make it to the national stage, and an even a smaller percentage are successful in securing an investment.
Do you think you have a product the Sharks would like? Here are tips to help you attract the Sharks and enhance your chances of saying: “I’m in.”
No. 1: Be Creative.
If you’re pitching your business via the ABC.com website, make sure your story is compelling and entertaining. Get to the punch line quickly. Don’t waste time telling your life story. Also, even though the website doesn’t require a video submission -- do it. The Shark Tank staff doesn’t have time to call you for a video submission and they will want to see you before they cast you for the show.
No. 2: It’s Television.
You could be the next Mark Zuckerberg, but if you don’t come across well on television, forget about Shark Tank. The producers are looking for high-energy, animated presentations with lots of personality. So if you’re not a natural on-camera, get some coaching before you submit your pitch.
It is also an advantage if the Sharks can see, taste, touch and/or experience your product. That’s what helped KISSTIXX, a high quality lip balm made for kissing, attract an investment from Mark Cuban.
“With our presentation we knew that because our product is simple we had to do something that would really make a mark, so we came up with the idea of getting two Sharks to kiss on camera,” says Dallas Robinson, CEO of Orem, Utah based KISSTIXX. “The producers told us that they didn’t know how well this would go over, but that the idea was one of the contributing factors to us pitching on Shark Tank.”
No. 3: Be Unique.
The Sharks are private equity investors so they’re looking for a unique market opportunity with fast growth potential. If your product is the same as your competitors, you won’t be an attractive investment. Show how your product is unique and offers something customers can’t get anywhere else.
“My product SoundBender solves a real problem iPad user’s face in a simple and awesome way,” says Moshe Weiss, the CEO of Simply Amazing, Inc. based in Minneapolis, MN who successfully pitched the Sharks in February 2013. “The combination of a good product, good personality and the potential to make everyone money attracted the attention I needed.”
No. 4: Know Your Numbers.
When you present to the Sharks you better be ready to answer questions about your financials. Estimates and guesses are a real turn-off. What are your operating costs? Your margins? How much are you spending on marketing? How much is your revenue? Are you taking a salary?
“We tracked trends, certain questions that each Shark posed, and above all we studied what made the Sharks really want to invest with the people they did invest with. We knew that the evaluation of our company was crucial, the sales numbers were imperative and or course a strong business plan,” Robinson explained.
One of the most significant questions the Sharks will ask is “How are you going to use the investment to grow your business.” They want specifics. For example, you need to be able to tell them that you plan to spend X amount on marketing, X amount on equipment and X on adding key management staff. You must convince them if they give you the money, you know how to put it to work to make sure they receive a significant return on their investment quickly.
No. 5: Be Prepared.
The Sharks like to invest in confident business owners, so you need to be prepared to handle any objections or tough questions. You don’t want to fall apart when they attack. According to Shark Tank’s Barbara Cocoran, an entrepreneur who goes the extra mile to be well-prepared is someone who is going to be disciplined and dedicated when it comes to running a business.
No. 6: Passion: NOT a Key to Success.
In fact, passion may be a turn-off to the Sharks.
“I put no credibility in passion,” Cocoran says. “I look for conviction. When you have conviction, you’re in it for the long-term and you can handle objections. When you’re passionate, it’s more like being love-sick and you operate by the seat of your pants.”
If you’ve never had the opportunity to pitch private investors, I recommend you get some training. It’s a world all of its own and it’s worth the investment of your time to understand what it is investors need to hear in your presentation to attract their attention.
If you do get the opportunity to pitch your business to the Sharks, be confident, but not arrogant. Don’t argue with the Sharks and try to convince them they’re wrong unless you can back up your comments with hard facts. And don’t take their attacks personally -- it’s business. Remember the Sharks are sophisticated and successful entrepreneurs. The more prepared you are, the greater your chances of success.
This opinion column was written by New York Times bestselling author and small business consultant Susan Solovic .