Home » BLOG » Don’t call Naomi Simson ‘darling’, and 3 other investor pitch no-nos: Shark Tank’s Steve Baxter

Don’t call Naomi Simson ‘darling’, and 3 other investor pitch no-nos: Shark Tank’s Steve Baxter

As those who have been following TEN’s Shark Tank will appreciate, there are times in a pitch when the entrepreneur makes everyone feel a little nervous.

Whilst a degree of pitch anxiety is expected, this normally wears off after a few moments of conversation. When that feeling lasts the length of the pitch it can be deadly for a deal.

Take Kerry, the fast-talking inventor from Newcastle who pitched us the world’s brightest dynamo bicycle light combined with a USB.

A clever inventor who is passionate about the cycling market, this entrepreneur lost my confidence early on with some hyped up claims about his product that didn’t appear to stand up to scrutiny.

For example, after referencing a global market of over 100 million new bicycles per year, he went on to predict that this world-first invention, which costs well over $500 (compared to a regular bike light at $25) would find an enormous market. However, the panel felt a very niche percentage of this global market (the wealthy long-distance cyclists) would be tempted to spend that kind of money on his product.

It seemed Kerry had his pricing wrong, and whilst that’s a red flag, it’s not beyond correction if all the other elements are in place and someone is open to working with an investor to build more confidence in this area.

Kerry had enthusiasm in spades – which is great. But at times his demeanour and his responses were so over the top, he ran the risk of coming across as someone who could be challenging to work with – particularly for seasoned investors who are time-poor or prefer a more measured approach.

There are also times when an excellent pitch goes horribly, suddenly wrong. The feeling is palpable. Take the family from Evil Corp who blew us away with their awesome horror-themed presentation. When one of the presenters came at us with a bloodied chainsaw we definitely felt uncomfortable, but that was purely a demonstration of their ability to wow their customers with fear.

I loved their bold vision to fill a gap in the entertainment market with a scary theme park. And, of course they were from Queensland, which instantly got my attention.

Towards the closing moments of their pitch, I asked what was to become the deal-breaking question: what do you base your projected customer numbers on? They told us that Movie World in Queensland (a well established gigantic attraction) was the main competitor and that they aimed to match their performance.

Their exaggerated plans to take on Movie World saw this family business snatch defeat from the jaws of victory and sadly walk away without a deal. The answer, quite frankly, was scarier than their pitch for anyone thinking of going into an investment partnership with them.

There are many important things to do in a pitch – like communicating your vision and your expertise, being across your numbers and having an appropriate ask. And, of course, you need to come to the conversation with a great business idea and ideally some existing revenue. Assuming those fundamentals are in place, here are a few things to never do in a pitch environment.

1. DON’T OVERSELL – it makes people nervous: Investors want entrepreneurs to be persuasive and clear about their business, but they don’t respond well to someone putting on the fast and loud talking display of a stereotypical used car salesman. Let your great idea, solid plans and expert credentials do the selling for you. And remember, investors generally want you to succeed – otherwise they wouldn’t have you in the room.

2. DON’T OVER-CLAIM: Exaggerated, unsubstantiated claims from a young, untested business like “this will obliterate Facebook” or “we will make a million dollar profit in the first three months” will only undermine your credibility and shut down the conversation early. Investors are more likely to be persuaded by a calm and rational presentation of the sales projections, even if they are still small, with a vision for how you plan to scale the business. This signals they are dealing with someone they can trust, who is more likely to under-promise and over-deliver than the reverse.

3. DON’T BE INAUTHENTIC: getting into partnership with an investor is a marriage of sorts (albeit a shorter one). Bring yourself and your experiences into the room, not a hyped-up version of who you think you need to be to get the deal. Faking the first-date is a bad idea – it’s likely to instantly repel the experienced investor, who can smell inauthenticity a mile off. And, if you did end up with a deal, you may well find yourself poorly matched with a person who has very different expectations of who you are and how you will manage your business.

4. DON’T BE COCKY OR OVER-FAMILIAR: When Kerry called Shark Naomi Simson “darling” on last week’s show, it came across as patronizing and got the panel offside. Cheeky is fine, and can build rapport (example: the Bottlepops duo who offered us a beer) but if it distracts from your presentation or jars an investor into thinking you would be disrespectful in a business relationship, your chance at a deal is off to a rocky start. Demonstrating a willingness to listen bodes well for a long-term relationship with an investor. Talking over the top of an investor when they are trying to give you constructive feedback/criticism, signals someone who would be difficult to work with.

This article first appeared on Business Review Weekly. View the original here.

One comment

Leave a Reply

Your email address will not be published. Required fields are marked *