Tomer Alpert let out a sigh of relief. Tears of joy ran down his face. After spending three years working without pay and investing $90,000 of his own money into his tech startup, Felt, he finally found an investor on NBC’s hit TV show, Shark Tank, to come to his rescue. His company recently found itself in dire straits after using up the remaining funds provided by a previous investor. CEO and co-founder, Alpert, was left with no other choice but to do something drastic. So, he went to the sharks.
For those who haven’t heard of Shark Tank, it is a business reality television series in which a panel of investors, or “sharks”, listen to a business pitch from an aspiring entrepreneur. Members on the panel can either invest or opt out. If the entire panel rejects the presentation, the entrepreneur will leave the show empty-handed. However, if the pitch survives the allotted hour of questioning and probing from the panelists, there is a good chance one or more of the sharks will offer to invest, allowing for a very happy ending, or in many casesbeginning, for the freshly crafted startups. Not to mention the free publicity and air time.
Why was Alpert’s hail Mary pitch to save his business successful? What makes a venture capitalist interested in your company? Outlined below are five lessons you can learn from Alpert and the many other successful entrepreneurs featured on Shark Tank. Following their approach to pitching products to investors will help you keep your cool and outshine the rest when the pressure is on.
Shark Tank: Lessons Learned
1. Numbers, numbers, numbers. Though passion may be the best source of a great business idea, when you are talking to investors, they want to know the data accompanying the innovation. How money flows in and out of your organization is a big indicator of how you manage (or mismanage) your business. Know your numbers and be ready to present the facts. (Going over this information ahead of time may also give you a wake up call to if your finances are being mishandled. You can then take action to stop the bleeding.)
2. Market! What is the first thing you do when you hear of a new company or product? You go online and research! Make sure you have covered all marketing angles for your product and that includes having a decent website. Lackluster sites and little to no social media interaction will push you out of the limelight and make it difficult for customers to access your product, so put your priorities in the right places! (For an example of a good approach to website layout, design, and user-friendliness, take a look at Felt’s chique website here.
3. Keep yourself in check. It is important to be driven and ambitious when looking to start a new company, but good organizations also require responsible, level-headed partnersin order to thrive. Just because you have a great idea doesn’t mean your work is done and you can kick back and relax. Investors are looking for strong, hardworking, humble individuals that will see their project through to the end and continue innovating along the way. Keep your ego in check.
4. Tell a story. Alpert’s pitch included a touching story of wanting to make communication more heartfelt by sending handwritten letters. We live in a busy world of cold scripted communication, using methods such as text messages, emails, and social networks to reach out to friends and family. Alpert realized the beauty in facilitating a handwritten letter, by incorporating technology to get it done. Through his invention, the Felt app, users can now hand write letters (with a stylus), insert photos, and purchase personalized cards all through an app. The difficult part is sourced through a Dallas boutique shop, where the cards are printed, stamped, and then mailed out via the U.S. Postal Service. Who doesn’t like a heartwarming vision like connecting humanity through personal touches, that is bundled with convenience and ease?
5. Be personable. Do you like doing business with unlikable individuals? No one does. Being personable and having a great personality, however, are huge assets for getting your business off the ground. The sharks look for amazing people that know how to make that personal connection. It’s also important to remember to play nice, too. Entrepreneurs with superiority complexes won’t go far with investors.
Starting a company can be challenging, but having investors along for the ride to help with the financial burden lightens the load significantly. Remember to keep in mind the Five Lessons Learned from Shark Tank and you could be the next Tomer Alpert!
Dire straits (idiom): A very bad circumstance.
Using up (transitive verb): To exhaust strength or useful properties.
Drastic (adjective): Likely to have a strong or far-reaching effect; radical and extreme.
Opt out (phrasal verb): To choose not to participate in or carry on with something.
Hail Mary (noun, football term): A very long, sometimes unsuccessful pass made in a desperate attempt to score late in the game.
Keep your cool (idiom): To maintain a calm and collected attitude.
Outshine (verb): To be much better than (someone) in a particular area.
Stop the bleeding (metaphor): To slow down a trend (or spending) or change its direction.
Lackluster (adjective): Lacking in vitality, force, or conviction; uninspired or uninspiring.
In check (idiom): Under control.
Top 5 Tips for Getting Noticed By Investors
- Prepare your data and know your numbers!
- Thoroughly market your product (don’t cut corners).
- Keep yourself in check.
- Tell a story.
- Be personable.