When pitching an idea to potential investors, sometimes they might show you their soft side, especially if you are passionate about the product and show some real life experience on how hard you’re trying to keep your dream afloat. However, it is hard to overstate that when it comes to making a deal, you should know your numbers.
There are many skills required for running a successful business, but two main questions that need answers are: What problem are you solving with your product or service? and Why are you the right person to do so?
Not being able to explain and justify basic metric about your business idea relatively quickly in front of potential investors who are responsible for hundreds of thousands or millions of dollars is the easiest and quickest way to ruin your chances for success, and Shark Tank is a show that was made to prove the same point.
After each negotiation or business meeting, even if you don’t get the kind of support you were looking for, there is exceptionally valuable experience from which you can learn a trick or two about the nature of entrepreneurship. Potential investors are always challenging you to think beyond your current business idea you’ve defined and get more insight into your thinking process.
Securing an investment is the most important but not the only point or the negotiating process. Stay open to suggestions, as questions, encourage others to discuss and always be ready to learn!
Instead of reacting emotionally, think everything through and decide how much equity you’re willing to give up. Negotiations are inevitable and your decision should be based on numbers, not emotions.
As you can easily conclude, on Shark Tank we’ve seen too many personal and emotional negotiating “techniques”. Knowing your bottom limit will help you avoid numerous future problems and keep your business idea alive and going in the right direction.
However, we have prepared some of the tips and interesting statistics that will bring your understanding closer to reality and hopefully improve your knowledge before you step in the fierce arena of startup gladiators.
The Shark Tank Formula For Startup Success
Guest Post By Nick Rojas