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10 Tips For Making The Perfect Pitch On ‘Shark Tank' (Or To Any Investor)

It got very sad for yours truly this past weekend, and ABC's hit show “Shark Tank” was behind much of the problem. Instead of basking in the company of my friends and family, there were comforters, pillows and lots of “Shark Tank” occupying my attention. There's no shame to be had, either; it's just a fascinating show with an equally fascinating concept behind it.

The show first premiered in 2009, when the US economy was in shambles and banks weren't in the mood to hand loans to small businesses. Whether the timing of the debut was by design or coincidence is irrelevant. The desperate times that entrepreneurs were facing served as a pretty good backdrop for the show.

Half a decade later, “Shark Tank” is still as interesting as before. For the true fanatics, it's impossible to watch the show without picking up a few pointers on how to make the perfect business pitch. Here are 10 of the best to help you make a success out of a visit into the “Shark Tank.”

Make The Calls

Before you even dip your toe into the tank, you better have made a call to all the big players in your industry. If you have a kids' toy you're trying to sell, Toys ‘R' Us should be in your call history. If you have an office product you've just created, there's no reason Staples shouldn't have been given a ring. The ideal scenario for an investor is to give his or her money to a competent entrepreneur, who can, literally, handle his or her business as the money grows.

Not taking care of your due diligence is a sign that you'll make the shark do all the work, which investors aren't always so willing to do.


Be Flexible And Open To Suggestions

There is really only one way in which sharks frequently act disingenuous, and that's when it comes to valuing your company. Everything else they say can either be chalked up to valuable advice or constructive criticism. When the investors tell you that you have a good business, they're being honest. When they tell you have the wrong idea on how to take that business forward, they're being honest.

Some contestants have actually failed to win money because they were too stubborn to listen to a unanimous piece of advice from all five investors. In these situations, it's best that you follow one of Mark Cuban's cardinal rules of the tank: Follow the green, not the dream.


Don't Show Emotion

The “Shark Tank” is a business setting. Just as the investors are distinguished in handling the negotiations, you should be, too — particularly when it comes to your receipt of certain offers. Too often entrepreneurs find themselves either being overjoyed when they hear one investor's offer, or pleading with a shark not to take too much of their company.

Both of these scenarios hand the initiative to the sharks. Smile too much and it shows them that you're happy with what they offered you, regardless if it's advantageous to them and not you. Plead, and you show the sign of desperation, which has the scent of blood attached to it, and we all know what sharks do when they smell blood. Keep that poker face and don't give off any scent.


Have A Detailed Plan

Knowing why you need the money and what you plan to do with it should be a no-brainer, but many contestants have suffered for not knowing enough. Some have pitched investors for a certain amount of cash, only to be shocked to hear, “You're going to need more than that.” Having a detailed plan of what you're going to do with the investment, coming up with a good amount to ask for that parallels that plan, and envisioning how it can take your company to the next step only asserts your credibility as an entrepreneur the sharks can trust.


Demand Respect

The fact that you want their money isn't a license for the sharks to treat you any way they want. After all, you're offering something of value, too: your company. Too often, entrepreneurs find themselves flooded with a bunch of questions, which gets them flustered and wrapped up in a confused state. This is a poor reflection of a businessman or woman who is supposed to look like he or she knows what he or she is doing.

As you try to cut the image of a distinguished entrepreneur worthy of investment, it's important that you show that you won't be pushed around in the boardroom setting. Set the pace of the conversation, let them know you'll answer questions one at a time, and ask them to let you finish before throwing another question your way.

Having your head on a swivel isn't exactly the best first impression. Do yourself a favor and demand respect.


Take Advantage Of Bidding Wars

It's one thing to have two investors offering you unique packages of investment; an outright bidding war is a totally different ballgame. If, for example, Mark Cuban undercuts Daymond John by offering a similar amount of dollars for less equity, the ball has just been thrust into your court. First, it's a sign that the sharks are thirsty to land your product. Secondly, it means that there's always a chance the next guy will go lower on his demands for equity.

This opens the door for you to direct the conversation now. “What would you do for my company, Barbara?” “What's your plan for us, Robert?” “Would any of you like to work together on a deal?” You have the luxury of asking these questions with increased confidence once the sharks start biting one another.


Always Make A Counter Offer

The celebrity investors are called “sharks” for a reason; they will take a large bite out of your company if you let them. However, there is seldom any downside to making a counter offer. Rarely will an investor pull back his or her offer simply because you had to the gall to offer something else. At the end of the day, you owe it to yourself to see how much the sharks will bend before they break.


Be Enthusiastic

You can make a solid, concise pitch on the show, with an airtight business plan and give the sharks reason to doubt with a monotone delivery. The investors are smart; they haven't been welcomed into the tank for nothing. They know the black and white factors that can make a good business. However, when a decision is too close to call, noticing passion in the entrepreneurs before them certainly helps. They want to know that the person they're about to enter a business deal with shows the fire of an entrepreneur willing to run through walls to be successful.

By all means, keep things business-like when it comes to talking money, but be excited about the product you've worked on for years when you make that pitch.


Be Objective

Setting a value for your company isn't about where you think your company could be in the future; it's about where it is today. There are a few factors that can bump up the value, like projected sales, patents that ensure no one else can copy what you're doing and, of course, potential for growth. The sharks, however, will let you know if you're being unfair to them. Ask for too much money for a company that isn't worth what you think it is, and you will have essentially tied the sharks'… fins.

From the sharks' point of view, there's no money to be made investing in a company that is vastly overvalued.


Ensure All The Risk Isn't On You

There are rare occasions in which the sharks are generous; they are liable not only to falling in love with a product, but also you as an entrepreneur. There are other times when what they're offering is fair. Then, there are other times when they seize an opportunity to screw you over. It's easy to distinguish when these times come, too; it's when all the risk rests on your shoulders.

Deals that include a sizable chunk of equity for a certain amount (say $600,000), which you have to repay in two years, is a rip-off that might as well be mailed with the word “SCAM” marking the envelope.

Yet, such deals have been accepted before, and each time it happens, the investors have a laugh after the entrepreneur has left the negotiation room.

Don't be that guy.

Photo credit: ABC/Shark Tank 

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Joseph Milord

Editor

Joseph is a Senior Writer, Editor and early member of the Elite Daily team. He studied Journalism and Media Studies at Rutgers University and will probably call Jersey home forever.
Joseph is a Senior Writer, Editor and early member of the Elite Daily team. He studied Journalism and Media Studies at Rutgers University and will probably call Jersey home forever.

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