This is a guest contribution by Nick Rojas
Entrepreneurs are perpetual idea machines with the next innovative vision just around the corner. However, turning that vision into reality takes funding, and without the perfect pitch, investors simply lose interest.
Knowing how to pitch right is a valuable skill for entrepreneurs to hone. It will allow you to move your idea from scratch paper to business plan, and from business plan to boardroom.
Have you ever seen a bad pitch unfold on Shark Tank? It is like watching two trains barreling toward one another, ultimately resulting in business disaster. It is certainly easy to critique from the couch, but what about your next innovative entrepreneurial idea?
Get tips from Shark Tank survivors with these guidelines on how to pitch right and avoid the train wreck.
Research . . . Prepare . . . Repeat
When watching Shark Tank, it is pretty clear who has done their homework. Entrepreneurs who research and plan nearly every aspect of their pitch often intrigue the likes of Mark Cuban.
“You know, everybody’s got the will to win,” Cuban told ABC News. “It’s only those with the will to prepare that do win.”
Investors have capital and they are certainly no strangers to poorly developed pitches. As a savvy entrepreneur, you want to pitch to impress. This means knowing every detail to your business plan and knowing what questions investors will ask.
Think of Yourself as a Brand
Many Shark Tank contestants have innovative ideas with room for growth. However, thinking of yourself as a brand is possibly more important than the product you’re pitching.
Investors want to know who you are just as much as your entrepreneurial idea. They want to know who exactly they are potentially investing their money into. This makes a two to five word summary about you absolutely important.
“If you don’t know what your two-to-five words are, then you walk in a room and you leave it up to us to interpret,” says Shark Tank investor Daymond John.
Make Your Shark Tank Pitch Hands On
Giving investors something real and tangible to hold onto during your pitch is a very powerful tactic for success. Depending on your product, it could make or break those funding goals.
Daymond John says, “Everyone has an idea, but it’s taking those first steps toward turning that idea into a reality that are always the toughest.” Giving investors a reality they can touch may be challenging, but worth a bit of investment on your end.
One study published in Judgment and Decision Making (2008), found that the longer someone has an item in his or her hands, the more ownership they feel over the item.
If you’re pitching a service instead of a product, showcase a working model during your pitch. You can include revenue stats and customer testimonies to support your entrepreneurial efforts as well.
Always Be Ready to Negotiate
Entrepreneurs enter the Shark Tank with varied emotions and expectations. This leads to many entrepreneurs getting less value for their innovative ideas.
Always be ready to negotiate and never settle for less value than what you and your product are worth. Investors will drop numbers on the negotiation table, and it is up to you to instinctively decide if the deal is right for you.
Shark Tank investor Barbara Corcoran recommends, “Don’t you dare underestimate the power of your own instinct.”
Ask yourself what your best alternative to a negotiated agreement (BATNA) is prior to swimming with the sharks. This allows you to see the bigger picture. Is 50 percent of your company really worth the startup funding?
There are a lot of variables that can affect how you develop your pitch. Entrepreneurs that research their potential investors and don’t settle for less than their value will certainly cultivate powerful outcomes.
Nick Rojas wears many hats — business consultant, serial entrepreneur, business and technology journalist. For the past 20 years, this self-taught marketing strategy has worked with small to medium sized businesses offering his personal brand of expertise. His latest adventure includes working with Brilliance.