Want to be the next Barbara Corcoran? Want to learn how to earn the money Barbara Corcoran has earned by watching a reality TV show? Want to see Barbara Corcoran actually star in this reality TV show?
OK, maybe you don’t share in the same obsession with Barbara Corcoran. But you’d definitely like to know how she made all that money, right? To get a glimpse of some investment strategy, it might be worthwhile to start watching “Shark Tank.” If you haven’t heard, the show has been called one of the best reality TV shows of all time. Five investors, including Corcoran, sit on a stage that props them up slightly higher than the entrepreneurs who come in asking for money for their business projects.
One by one, aspiring entrepreneurs are led into the “Shark Tank” where they pitch their products to the Sharks. The Sharks, right then and there, decide whether or not to give them what some might call the “best business credit card ever” to invest. The Sharks can be brutally honest, often leaving entrepreneurs humiliated, laughed at, insulted, and wishing they had never gone on the show to begin with. But sometimes, an offer is made, an entrepreneurs leave gleefully having just sold their product on national television.
What can you, a potential businesswoman, take away from a show like “Shark Tank” and apply to your own investment strategy? Below are three lessons taken directly from the show that can help to get you started.
Sell the Dream
Although it may seem counterintuitive, investors are most interested in the dream and whether your product is special as opposed to quantitative numbers such as previous sales. An example of this was seen in an entrepreneur who pitched games2u.com, which reported over $1 million in sales last year, but didn’t end up with a deal. Unless you’re going to absolutely blow the investor out of the water with your sales numbers to date, it is best to focus on the dream goal of the product. Do you have a great product? Do you know what the size of your market is? And do you have some sense of a business model? All of these are pertinent questions to keep in mind of having answered before approaching an investor.
Don’t Nickel and Dime
Some entrepreneurs on the show have made the faulty decision of declining counteroffers from potential investors because the numbers are not precisely what they had in mind. If the sale is relatively within a range that is acceptable, take the deal. You might not get another shot, and the counteroffer by a Shark or other investor might be the best deal you’re going to get.
The Deal Doesn’t Close Until the Money Hits
A real-life business deal goes through in several stages. Sales, initial questions, a potential auction, an accepted offer, due diligence, legal contracts, and then the transfer of the money. A show like “Shark Tank” makes us assume that since the deal was closed on a reality television show, the deal must go through. However, any deal can potentially fall through, and not work out. For example, Mark Cuban reportedly made a deal to Hyconn for $1.25 million for 100% of the company. Hyconn’s Facebook page indicated, however, that the deal with Mark Cuban didn’t work out, and another group of investors stepped in. The lesson here is that a deal is not a deal until its payday.
By: Stephanie Diaz A former public relations specialist, Stephanie is a blogger who shares tips on saving money and getting ahead in any economy.