“It is time for you to learn how to lure those Sharks out”
So while you were away this summer sunbathing and spending your money shamelessly on small goodies you will never ever use (that is the point of shopping anyway) WE DID OUR HOMEWORK.
Fast food, drinks, Geeky friends & Shark Tank.
So if you want to get funded on Shark Tank, look no further cause we got all you need in another yet UNIQUE guide.
SHARK TANK DO’S
1. Watch the heck out of the Show
Watch the whole show and monitor everything closely. Do not only learn from the “winners” but make sure to pay attention to MISTAKES as well.
Attitude is not the thing you should only go for. Stage and nature of product, past traction & competition are three main key aspects into which you should focus.
A geeky partner is highly advisable while watching the show, for commenting and more pleasant viewing.
2. Be there only if you are the one behind the wheel
You should thy to get funded on Shark tank only if you are the one who has control of the company.
Investors need to see you (as the main shareholder) and not just any good pitcher or advisor or limited partner.
3. Be specific on your demands
Be precise, and demand exactly what you need. Do not be afraid to go all out, just keep the following in the back of your mind:
Don’t go low on the amount because you want to look appealing to the investors, and not too high because you want to impress them.
BE FAIR & CORRECT!
4. Pitch your idea early on
Be clear on what you ask and what you are ready to give. Start referring the amount you ask for and the percentage of equity you are ready to give.
5. Be clear as to where the budget will be allocated
This is also known as “Roadmap”.
The levels on which you should elaborate are as follows:
How much money you need
Why you need the money
What it will be used for
Making your very own roadmap will help you because:
Each successful company and organization has a roadmap. It forces deep thinking, explains where they are going, and helps everyone stay on track. Successful people have roadmaps as well, whether they know it or not. That’s because they have a clear purpose that aligns the daily grind with their long-term aspirations. – Brian De Haaff – CEO, Aha!
6. Practice again and again & leave all worries behind
Total Cost-of-good sold (Cost of goods sold is the accumulated total of all costs used to create a product or service, which has been sold. These costs fall into the general sub-categories of direct labor, materials, and overhead)
Total Profit per UOM (Unit) (the difference between how much you sell and how much it cost you to build it)
Total margin per Unit (the percentage of the above figure)
9. Know your marketing numbers!
CPA – Cost per acquisition. Cost per acquisition (CPA) is calculated as: cost divided by the number of acquisitions. So for example, if one spends £150 on a campaign and gets 10 “acquisitions” this would give a cost per acquisition of £15.
Acquisition Channels. Knowing those, means that you know where your audience is, and where do they convert from. It also implies that you have tried different channels and you have concluded in only those that work for you. If you are in retail business, please consider few very interesting insights here
10. Beware of “strange” terms like
*Cohort analysis is hard to do in general because we need to generate an action and activity dates.
You need to build a cohort analysis event strategy early on your product.
To create a cohort we need to access the date that a conversion, or some other action, happens. In order to do cohort analysis in any system (such as google analytics, mixpanel etc) we need to inject a date, usually the date when a conversion happens, into Google Analytics and attach it to a user.
11. Emphasize on web presence and self-service business rather than bricks and mortar!
Maybe a little bit more enthusiasm is strongly advisable!
Jeff Jordan (Adreeseen Horowitz partner) & Frank Chen (Adreeseen Horowitz partner) are two significant people whose signature is all over the top metrics article.
13.Emphasize on the growth-hacking abilities you may have
Well if you don’t, at least learn few things about a growth hacking mindset at the Growth University.
14.Demonstrate your patent(s), if you have any!
State the type of the patent (utility, process) and the stage (pending, approved etc).
You need to go all out if you want to get funded on Shark Tank, keep that always in mind.
15. Be prepared to discuss barriers to entry
More specifically companies that may come with the same product in case you bring some remarkable results.
How possible is it for someone to copycat you?
16. Be mentally ready for “tough” lines like:
Stop the madness 🙂
You don’t deserve the amount you ask for
You are dead to me !!!
You don’t have a company you have an idea!
17. Engage people emotionally.
Everyone loves to hear stories, even the investors at Shark Tank. So tell an exciting story about your startup.
18. Remember, Investors tend to invest in what they know.
Your major frustration/downside is that you may have a solid, growing business that has a ton of potential, but you’ll get a lot of “no’s” simply because investors don’t understand the market you’re in.
19. Win the first impression.
Your first sentence is about the amount you ask and the percentage to give. Check the table below to see how that will be perceived.
Amount for %
25k for 20%
Business is too small Business has no potential Business is too early
Most probably it’s a pre-product or pre-revenue
100k for 5%
Percentage is too small for an investor to have scheme in the game
Valuation may be too high Retention and high revenues should be reported
250k for 10%
Valuation too high
Amount to low if revenues are already very high
2m for 20%
Amount too high for this percentage
500k for 30%
Amount too high and need to be justified
High revenues are expected
20. Don’t forget about Branding!
Branding is so much more than just your logo or company colours. Most people don’t understand that.
DriveThruBranding is a true friend in need. Just in two weeks, these guys will rebrand your company. Oh, and their prices are JAW-DROPPING.
I adore their three USPs as to why you need to get branded. Clarity, SPEED and everlasting VALUE.
GET BRANDED = GET FUNDED
As simple as that. Face Shark Tank like a pro.
SHARK TANK DONT’S
21. Do not go with “a rabbit from the hat” especially in cases of:
Complect shareholder schema
22.Do not counter-argue all the time
Listen carefully and accept their feedback and try to learn from it.
23. Asking for their day to day help is not on the menu buddy
They expect you to take care of operational tasks. They have no time to run your business.
This is your job. Mentoring, Financing and Networking is their job
24. Do not cry (although sometimes that worked really well)
25. Do not focus on physical expansion only
Bricks and mortar business scales are very difficult!
26. Do not go on Shark Tank too early.
If you have no traction, no product, no patent, no co-founder it’s not the correct time for you to be there.
27. Seeing an interest? Do not let greediness take over!
28. Don’t be arrogant because you are in love with your product
29. Do not negotiate changing the valuation.
30. Don’t forget to mention if you get a salary and don’t forget to emphasize if you don’t get one
31. NEVER go with a pitch you DIDN’T compose, they will all understand in seconds.
At the end of the day
All in all, it is now time for you to go out there and conquer the world. With some good preparation, everything will be fine.
And in case you do not get funded, well, it is not the end of the world. Always keep in mind the lessons learned.
At least even after this experience, you will know what works for you, if your product is good if you did mistakes representing it, etc.
Is anyone in for some Shark Tank episodes? Well, we are and so should YOU!
Theodore has a 15-year experience in running successful and profitable software products. During his free time, he coaches and consults startups. His career includes managerial posts for companies both in Greece and abroad and he has significant skills on intrapreneurship and entrepreneurship.