How To Win A Business Pitch | Startup World Cup 2022

Foreign [Music] [Applause] [Music] Thank you so much for coming to start a World Cup. Well, everybody here, I think, well, most people have seen you on Shark Tank, and they know you're into investments. But I want to start with how did you become an investor? What got you into the investment space?

You know what happens, I think, in your transition from being an operator to an investor is you go through the experience of trying to determine you have the executional skills to operate a business. And then, if you're successful, you take that knowledge, more importantly, what the mistakes you made, and try and help others that you invest in avoid those mistakes. That makes you a more successful investor.

So that transition occurred after a few liquidity events. Like everybody else, I retired for a year, and I got bored out of my mind. I've seen every beach in the world, and it's boring. I wanted to get back in the game and I came back in private equity and venture. I've worked for some of the larger firms for a while, and I said I can do this myself. I found my own firm. That's generally the transitional path.

And Shark Tank came along, which believe me, nobody thought this would happen. And we're going to learn a little bit about Shark Tank today because the secret sauce of Shark Tank is customer acquisition. You'll see on tonight's show a product that's going to air will sell two or three million dollars worth of it in one hour; will not pay anything for customer acquisition.

And my job as the investor is to take advantage of this massive social media platform. And when I invest in companies, I don’t want this to come off as arrogant, but it's a fact. I'm not like another investor. Most investors come from private equity or venture firms. They're great people; they have zero ability to acquire customers. All they can do is pay for them.

My strategy is how can I tell your company's story and help you acquire customers at a significantly lower cost? That's the model of what I do. Great! Well, as you mentioned, you are different from a lot of investors out here, and we do have a lot of entrepreneurs here as well. So I want to focus a little bit on the entrepreneur's side.

Yeah, you've heard thousands and thousands of pitches by now. What makes a winning pitch, in your opinion? How is that different from other pitches that don't get the funding?

Yeah, there's three attributes. The reason I have this data is the show Shark Tank is on in 42 countries. Some, it's the generic American tape with, you know, voice-over to the language of that geography. Others is new productions like Canada, England, Australia, New Zealand, Brazil, and Mexico, where it's called Lion's Den in Germany and Dragon's Den in Australia. Whatever, it's the same idea.

And it doesn't matter what geography or what language; the entrepreneurial adventure is the same. So there was a little research done about four years ago that took the unedited tape from all the pictures that actually got funded. They did not determine the outcome of the business; they weren't looking for that. They were trying to figure out, in the period that you're engaging with the investor, what were common attributes that achieved success.

So it turns out, not in just some of the cases but in one hundred percent of the cases, three attributes existed. Here they are: if it's the only thing you guys remember from this, this is it. So you should write these down because they'll serve you well in the future. I actually consider these attributes the definition of leadership in any sector because I don't care if you're a preacher, a politician, an entrepreneur, a mother, or a father: no one follows you if you don't know where you're going.

So here are the three issues. Number one: Can you articulate the opportunity in 90 seconds or less? The whole idea of presenting an opportunity is to define it very quickly. What is it that you have that could be such a great opportunity? What idea is it? But if you can't explain it—and most of the great pitches you can explain in 30 seconds—here's what I do, this is why I'm here, this is my product, this is my service. So you only get 90 seconds for that.

Now, this is very important. Great ideas—this is number two—great ideas are a dime a dozen. What's really rare are executional skills. So now you have the ear of the investor. You could be in a VC pitch, you could be in an elevator, you could be on Shark Tank carpet, whatever. Okay, I like the idea. Why can you make it happen? What is it about you and your team that can execute on this? Do you know the sector? Have you done this before? Have you worked for a competitor? Have you failed three times to figure out the mistakes you made?

I personally would rather invest in an entrepreneur that's failed and felt the sting of failure and is highly motivated to get out there and fix what they did wrong because they've learned from it. But that doesn't matter. What matters is to tie your executional skills to the idea so that all of a sudden you're mitigating risk for the investor. Great idea, great team—and I can feel the change in a room. In the context of Shark Tank, you can start to see all these sharks, and I say, "Hey, what do we got here?"

Yeah, and because you have to have executional skills, but there's one more, and this one's the killer. I've seen this happen so many times. So let's put it back in the context of Shark Tank. You've beat out a hundred thousand applications to be one of the 240 companies that tape, and you're there. You have your moment. You got the first one right; everybody loves your idea. You got the second one right; you've convinced everybody that you're the right person to execute. And then this happens: you have to know your numbers. How big is the market? How fast is it growing? What's the gross margins? What's the break-even analysis? How many competitors do you have?

You have to have those right on the tip of your tongue because that is the glue that binds. If you get onto Shark Tank carpet and you've got everybody that's in your deal and you don't know your numbers, you deserve to burn in hell in perpetuity. And I will personally put you there, and I've done it many times. You have to know your numbers; it's the language of business.

You get those three right, the probability of a deal goes up geometrically higher, and it's in every single successful pitch. You can go back in time, go and look at Shark Tank episodes—you will see all three of those attributes every time someone gets funded. If you like that video, where do you see my next one? Don't forget to click right over here and subscribe.