You Need Passion. “My whole focus is on trying to seize up the entrepreneur,â€ she says. “I am looking at how much wild enthusiasm do they genuinely have for their product. You can’t fake passion.â€ She adds, “does this person have the personality to sell the products and the endurance to weather insults and rejections?â€
Look The Part. How you look, the way you speak, and what information you leave out during a pitch can sink the deal. Beyond the obvious, which is you should be well groomed, professionally dressed, and make direct eye contact. Be careful not to wring your hands or place them in your pockets. “A certain level of nervousness is expected but if you constantly shift on your feet this sends a signal thatÂ maybe you are hiding something,â€ Corcoran explains.
Please Don’t Ramble. The language you use to convey your concept ought to be concise. “Communicate clearly here’s my idea, this is my market, here’s what distinguishes me from my competition, this is why it will be a financial success, and here’s why you should invest in it,” Corcoran adds. Rambling on about their technology or business rather than the financial opportunity is a huge and common mistake.
Know Your Industry. Be prepared to answer questions about actual sales or anticipated orders, revenues, profitability and margins for your industry, advises Corcoran. If you have a working prototype, show it to investors so they can see how it could actually work. If you can demonstrate your product or hand out product samples that’s a plus.
Don’t Overvalue Company. A big mistake that budding entrepreneurs make is that their valuation is too high. “You can’t price your business on potential,” says Corcoran. “You might believe in it, but it’s having actual orders that make investors believe in it. No sales equals no value to an investor.” Some other common mistakes or reasons that cause investors to reject a deal are the management team is too thin or inexperienced, insufficient growth potential, and indebtedness–the entrepreneur owes a lot of money.
Provide Exit Strategy. Investors are not lifetime partners. “Two thirds of all the people that have ever pitched to me don’t show me how I am going to make money,â€ says Corcoran. If you say sales revenues, you have put yourself out of the game. “What do you think we do with the profits; we put them back into the business to meet greater demand,â€ she adds. On average, most angel investments take seven to eight years to reach an exit point where the businesses are sold to another company or go public.
Seal The Deal. Getting an offer isn’t the same as sealing the deal. Negotiating the terms of a deal will always be tricky, and disagreements about operations can be difficult to hammer out. “About 66% of angel investments fail to return any money at all. Investors constantly have potential deals on their plate,” says Corcoran, so, the longer days are spent in closing the deal the less likely it will get done.
ABC’s Shark Tank is holding an Open Call at the 2014 Black Enterprise Entrepreneurs Conference + Expo hosted by Nationwide Insurance on May 16th at the Hyatt Regency Columbus, Ohio. Entrepreneurs will be given the opportunity to do a 1-minute pitch of their business/product/idea to a member of the Casting Team–just like they would as if they were on the show.