Three Rules for Wowing Potential Investors
By Rosanne G. Dunkelberger
Want to make a successful pitch to investors?
Earlier this year, Kevin O’Leary of “Shark Tank” fame shared his expert advice with a sellout crowd of nearly 1,200 businesspeople, students and aspiring entrepreneurs during First Commerce Credit Union’s Power Forward Speaker Series.
O’Leary knows a thing or two about the subject. The serial entrepreneur sold his educational software company for $4.2 billion and for 10 seasons, he’s been one of the investors vying to make a deal with would-be business owners on the popular reality series, “Shark Tank.”
Whether you’re facing the Sharks, a venture capitalist or your father-in-law, O’Leary lists three essential elements of a successful pitch:
1. The entrepreneur should be able to articulate their opportunity in 90 seconds – or less. O’Leary explains, “Great ideas are presented in seconds, not minutes. If you can’t explain it, you’re finished. Get this right, people are still listening.”
2. Convince investors you have the right team to execute the business plan. O’Leary recommends asking yourself key questions. Have you worked for a competitor? Has this business been in your family a long time? Have you tried three times previously and failed, and now you know what you did wrong? O’Leary says he personally loves to invest in entrepreneurs who have felt the sting of failure and are motivated by the fear of failing again. “It’s very powerful and I respect it.”
3. Know your numbers and have a comprehensive understanding of your business model. “Imagine, in the case of ‘Shark Tank,’ there are 100,000 applications, maybe 220 get picked, maybe 180 get on to the carpet. There you are. The sharks love your idea. You’ve done a masterful job explaining your execution skills and they’re ready to invest. If you don’t know your numbers, you’re finished.”
“When these three come together,” says O’Leary, “your probability of getting a deal goes up geometrically. I teach this to every entrepreneur, and I make them rehearse it in front of me. If you can’t do this, forget about ‘Shark Tank,’ the real world will eat you alive.” O’Leary concludes, “If you’re able to present these concepts successfully, you too will be successful. It will not determine (the fate of) your business, but you’ll get a check and that’s the start of your journey.”