Top 3 Tips for a Million-Dollar Pitch
[Music] So how long I think the audience might be interested to hear? Obviously, each one of the pitches is heavily edited down to the best parts. Yes, and it's edited down for narrative, it's edited down for conflict and collision of ideas.
How much time? So it's how long is an average segment, and how much time do you actually spend interrogating the pitcher?
That's a good question, and I'll tell you. This is probably one of the most important lessons I teach. I teach graduating cohorts now in engineering schools to try and convince a third of them to start their own business. Places like Notre Dame, MIT. Getting those entrepreneurs out of those engineering classes is important just to be globally competitive.
But I always tell them about my Shark Tank experience after seeing thousands of pitches for all these years. Whenever I talk about Shark Tank, these are the three attributes you find in every successful pitch by the minute. Let me give you the time.
The ones that work, the ones that get a check, do not determine the outcome of the business. These are the ones that get a check that actually start their journey funded on Shark Tank, that go into the ecosphere Shark Tank, that get followed every year by all the networks, that get all the daytime television and all that stuff because they got an investor.
In every case, they're able to articulate the idea 90 seconds or less, every single time. They were able to say, and most of them were 60 seconds: "Look, I'm from casset, Massachusetts. I put cupcakes in a jar; they fed X them to people. I get it." Mhm.
The ones that ramble on and can't get the idea out, and it's still 10 minutes later and we're still wondering, "What are they talking about?" They never get funded. So, that's number one. That only is 90 seconds.
The next segment is the part of Discovery, where they explain to you. I generally only invest in teams now. I like the ying and yang of two partners that bring different skill sets, but they explain over, let's say, a 10-minute period why they're the right people to execute the business plan.
This ends up being very important because when those two come together, you can start to see—I can see cumin over on my right starting to make noise and Barbara is starting to get excited over here because, wait a minute, these guys know what they're doing! I love the idea; they know what they're doing. They have a high probability of success.
But here's the killer, and this is where you can spend an hour, two hours, and sometimes you do. There are some legendary cases that have gone past two hours. By now, there's a competition going on; there's going to be an investment. It's just who's going to do it? Who's going to do it? Who's going to get it, and what are the terms?
But then the discovery—and the one where they fall—I’ve seen so many presentations crash and burn here. The numbers! They don't know their numbers, and if you show up in front of me on Shark Tank and you get past phase one and two, and we spend an hour, and you don't know what the gross margins are, you don't know what the break even is, you don't know how many competitors you have, you don't know how fast the grow market is growing, if you don't have the answer to all those questions, I should put you in hell in perpetuity. You should burn in hell!
Because you got there, you're on the carpet, you're there about to start your journey, and you don't know your numbers. Immediate execution! I mean, that's unbelievably stupid. But that's the one, and that's do many who get that far—they fall more often than you would believe.
Because the confidence of the investor, you can see it just like the soul of a body drifting out. That's exactly what's happening with that. I can't believe this! These morons don't know their numbers, and I just feel it's my moral obligation to send them to hell. I really did!
Yeah, I mean it just—it's so—that is very important. And that discovery can take a long time when you’re confident they know their business model and they're the right people to execute the plan, and you get the opportunity—that's 2 hours.
Now the editors have to cut that down to 8 minutes, and they've got to find those moments that define what that deal is all about, and they become masters at that too. I mean, I watched Shark Tank just to see how they edited it because I was there and I went, that deal was two and a half hours. They're amazing editors, they're really good!