In a Nutshell:
- Know your numbers.
- Make it interactive.
- Tell your story – sell your idea.
In almost every entrepreneurial journey, there comes at least one time when you have to pitch for investment. These moments can make-or-break your business. Is it any wonder that TV shows like Shark Tank and Dragons’ Den provide such compelling viewing? I love these shows. They’re dramatic, inspiring and even educational! If you watch them enough, you start to see the trends among successful (and unsuccessful) pitches.
While the points above may be things we intuitively know already, they are now backed up by statistics! Vanessa Van Edwards and her team at Science of People analysed 495 Shark Tank pitches, looking for what separates the successful from the unsuccessful. They found 10 indicators of success for entrepreneurs who are more likely to get a “yes” from the sharks.
Here is my summary of what I consider to be the 3 most statistically significant insights from their research.
1. Know Your Numbers
No matter how smooth and charismatic your presentation is, if your numbers don’t back it up, you’re dead in the water! Nothing will kill your pitch like fuzzy numbers or delusional valuations and equity offers.
64% of “no” deals had some kind of math problem.
2. Make it Interactive
Get your audience (the investors) involved! Let them experience your product/service for themselves. Ask them questions and give them tasks to put them in your customers’ shoes and see the value of what you’re offering.
81% of successful pitches were interactive.
3. Tell Your Story – Sell Your Idea
Few things sell like a good story. Investors want to know about the person and the product in front of them and how it came to be.
58% of successful pitches had a story.
“Each pitch must tell a story about money: the lack of it, the need for it and how it can be made. […] If you can’t tell the story and put your prospective customer into the narrative […], you will fail. […] Oh and you’d better be able to get your story out in less than 90 seconds, or you can pack your bags because my money’s already looking somewhere else.”
– Kevin O’Leary
There you are. You’ve heard it from the shark’s mouth.
Of course, there are many things you have to get right to get a “yes” from investors. I’d start with these.