The Sharks are reflective of the overall private investor community. They have backed about 41% of the 147 entrepreneurs that have appeared on the show. Using their own money, the Sharks have made deals totaling about $15 million in the show’s three seasons. John and Corcoran have reportedly offered the most money and invested in the greatest number of companies.
Many small business owners find angels, often retired executives or entrepreneurs, through word of mouth. But several business groups have created networks of private investors, such as the Minority Angel Investor Network, Angel Capital Association, Angel Venture Forum, and Private Investors Forum. And, like Nelson, more entrepreneurs are seeking creative ways to pitch to private investors.
“Investors are hungry for deals,†says Tim Reese, co-founder of the Minority Angel Investment Network and managing partner at Forge Intellectual Capital. There is a lot of money on the sidelines, because investors have been selective the last three years or so, he notes. “That money is now in play.†Individual angel investors are even collaborating with private equity and debt lenders, he adds.
Top 5 Ways to Bait Sharks
Capital-seeking entrepreneurs ought to be armed with such pitching tools as a business plan that includes a well-defined marketing strategy and solid financial statements that indicate high growth potential. Also, first impressions count. Corcoran says you need to look the part. John says, “Don’t turn off a potential investor before you even open your mouth. When you are pitching, you are presenting yourself as the brand.â€
When you speak, avoid rambling. Clearly and succinctly explain how your product or service solves a problem or fills a need, who is your market and consumer base, what distinguishes you from your competitors, where you will spend the money, why you will be a financial success, and when the investor will get his or her money back.
The Sharks share other tidbits about how to get equity investors hooked on your business.
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