What ‘Shark Tank’ taught me about Pitching

Shark Tank is a wildly popular reality show, where entrepreneurs looking to raise funds pitch their ideas and businesses in front of a group of accomplished investors and venture capitalists. A convincing pitch can ideally result in investments from one or more of the investors.  Since the show’s inception in 2009, viewership has been skyrocketing with the sixth season currently running on the ABC channel. Many US-based entrepreneurs are keen to pitch, not only to seek funding but also to showcase their products and services. Many of the pitching entrepreneurs have witnessed a spike in their sales revenue after showcasing their business on Shark Tank.

Apart from the entertainment value, the show has a lot to offer to viewers, especially for those planning to raise funds from investors. The feedback from the panel of investors provides significant insights not only on fine-tuning the business model- but also to find ways to accelerate growth, market products, and pitch to investors. Based on hours of watching the shows, I extracted the following insights on effective pitching:

Sell the vision

Investors are more concerned about the long-term vision for the business. Investors tend to invest based on where the startup will reach within 5 years rather than how they’re performing now. Although current performance is an indicator of future growth trends, a great vision backed up by solid strategies can work wonders. Founders must focus more on the big picture and leave granular details for subsequent meetings.

Be a storyteller

People love listening to stories; investors are no exception. Many investors have to deal with a lot of issues and tend to listen to a number of pitches per day. What makes a pitch memorable and attention-grabbing is the way the pitch is presented. The pitch should ideally start with a personal story that will connect with the product idea and why the problem needs to be solved.

Establish a connection with the idea

Through the personal story at the beginning of the pitch, the entrepreneur must establish a connection with his business idea. This must answer why he’s passionate enough to stick to the idea when the going gets tough. For example, an entrepreneur focusing on the e-health sector narrated the story of his ordeal when his mother suffered and subsequently died of cancer.

Numbers speak 1,000 words

Investors are fond of numbers and prefer them over vague superlative terms. They prefer terms like growth rate, ROI, projected Net Profit, and valuation over more qualitative terms. However, figures and numbers should be validated and must be authentic. Since credibility is of paramount importance, entrepreneurs must be careful about the authenticity of data and information provided in the pitch deck.

Sell the team

For fledgling businesses, investors tend to focus more on founders and their skill-set. Just as a renowned VC said, it’s better to invest in a B category idea with A category founders rather than an A category business with B category people. The pitch should allocate a section on the core team explaining how skill-sets for team members are complementary in nature and will contribute to success.

Why you and Why now

Two important questions asked by most investors include why the co-founders are well suited for the business and why they started the business now. These questions are asked if the business idea is still at a conceptual stage with a basic product prototype. The pitch should vividly address these issues, especially if the product and business model are untested in the market.

What will sustain competitiveness

Another important question normally asked by investors is why the business will sustain a competitive advantage. Normally, when a startup starts getting traction with an increasing client base, a plethora of copycat companies start emulating their product, and in the process, commoditize the product. The pitch presentation should clearly state the company’s competitive advantages and delineate strategies to retain them in the event of new entrants penetrating the market.

Pitch presentation can be a daunting task for many, especially for those not used to speaking in front of a crowd. However, continued practice, initially in front of a mirror, and then in front of a group of friends can boost confidence.  Thorough preparation and a solid pitch deck will significantly boost confidence for entrepreneurs. Shark Tank is a must-watch show for those already thinking of raising funds, as well as those looking to start their own business.

---