I can’t tell you how frustrating it is when I see a really great idea get a terrible pitch. Some of the most talented and creative people Daymonds ever met come on Shark Tank, and they show the Sharks these really cool products. Then they show the Sharks that they’re just not as committed to their businesses as they need to be to get funding.
How do the Sharks know they’re not committed enough? Well, they haven’t taken the time to follow through on their pitches and find all of the answers they need in order to write them a check. When someone walks in and pitches their idea on Shark Tank, Daymonds really not looking for a whole lot. He wants to know that they’re professional and serious about their business, and he can tell if they are because they hit all of the points on this pre-pitch checklist:
THE BARE BONES OF A GREAT PROPOSAL
- The elevator speech — Can you describe your company and what it does, in 60 seconds or less? Can you sell me on your idea in that time? If not, you’re not ready to pitch it yet.
- What problem are you solving? — Show us how your product makes people’s lives easier and why there’s a demand for the kind of product you want to bring to market.
- Your product — Now you can get into the details of your product, its features and how amazingly cool it is.
- Your team — So you have a great product, but what sets your team apart? Why will your team fill this void in the market better than any other?
- Your competition — Show us that you’ve done your homework on the competition. Identify them, and discuss threats they pose and how you’ll handle them. Give us a reason to choose you over your competition.
- Business and marketing strategy — Can you succinctly and clearly detail your strategy for capturing a percentage of the market? What percentage are you confident that you can capture? How much potential is there for growth?
- Cost of operation and justification for your proposal — Essentially, here, we want to know why you’re asking for the particular figure you’re proposing. What are your production and operation costs? Does this number include the cost of growth for your company over the next year? Show us that you’re not pulling a number out of thin air and that you know exactly how you’ll use your funding to improve your business and our ROI.
- Projections — Be careful here. Unless you’ve been in business for a while and have some past experience and numbers to back them up, projections can be dangerous. You want to have some projections for how you anticipate business to go in the future, but don’t be too optimistic. Wildly high projections make us wonder how you got them and what you’re hiding.
If you hit all of these points in your pitch, you’ll answer most of your investors’ questions before they have time to ask them. Being sure that you’ve checked off all of the items on your checklist also ensures that you’ll have done your due diligence in researching the market, your competition and how you plan to succeed.
In addition to these points, I’d also recommend preparing a few exit strategies for different scenarios. You don’t necessarily have to include those in your presentation, but have them ready for when your investors ask what you’ll do if something goes wrong. Other than that, smile, relax and show them why you’re a great investment.