Are you obsessed with The Shark Tank? I am! I tune in Friday nights, or catch up on the recorded shows when I miss the new episode. I love Shark Daymond’s suits. I love Barbara Corcoran and her tough-mutha-ly advice. And, don’t you wish you were Mark Cuban? I do!
The Sharks give some pretty solid advice, too. Especially if you are considering an investor-infusion. Here are a few rockin’ biz lessons, straight out of the tank….
- Be clear on what you want and why. The Sharks smell blood in the water when the biz owner is unclear on the product, the market or the numbers. Be prepared to pitch!
- Have you sold anything? You just can’t say, “I’m not comfortable with or good at making sales.” Pitching the Sharks is a sales presentation. So is getting your kid to brush his teeth. Everything is sales. Get over the fear. And prove out your good idea by selling it prior to your venture capital pitch. If you can’t sell what you don’t have, then develop a pre-production contract. They are not super interested in any untested products.
- Know the money, honey. If you ask for $100,000 for a 25% share in the business, you are saying that the company is worth $400,000. Can you back that up? And, what happens if you need more than that? Better ask now and be willing to show what you would do with the money. Btw, paying yourself a six figure salary is usually not of any interest to an investor. Just sayin. They starved early on. They expect you to, too. Be sure to learn how to read a balance sheet and income statement prior to tank swimming. And have a few different budgets worked out…for different scenarios for sales and expenses.
- Note what the Sharks fight over…Profits and People. The idea has to be a money maker. Or, you have to be compelling as a potential team member. The Sharks want someone else to do the heavy lifting. You may make a great manager with a little burn money and a BIG mentor.
A word of warning! Watch what you wish for. If a venture capitalist puts a $100,000 into your company, and you only have $1,000 invested…who effectively owns the company? A Shark could sink your venture. Even so, the business lessons might be worth it. Once you know how to play the game, you can play again.
Would you like to face off with the Sharks? What would you ask them for?