Tech multi-millionaire Steve Baxter will offer a $2 million deal to one entrepreneur on the reality television show Shark Tank this Sunday.
Late last year, the US version of Shark Tank boasted the biggest deal in its six-season run with a $US2.5 million investment.
Only a few weeks in, the Australian version will offer a similar six-figure deal.
Shark Tank’s producers are not revealing who the deal is made to at this stage but the businesses in the running are a digital design business; Mexican salsa sauces; bespoke furniture business; display stands and a wig business.
The reality television show has come under scrutiny this week after one entrepreneur who appeared on the show revealed his deal fell through after the show went to air.
But in this case, Baxter makes the investment, leaving Baxter’s fellow “Sharks”, Naomi Simson, Janine Allis, Andrew Banks and John McGrath, shocked by the size of the deal.
Simson told SmartCompany after sitting through over 100 pitches on Shark Tank there are some clear strategies which enable entrepreneurs to nail their pitch:
1. Share your story
Simson says entrepreneurs looking for investment need to take potential investors on a journey and share the full story of their business.
“You have to remember the other person does not know your industry, your business or you,” she says.
2. Understand your market
“Establish very early on why you, why this industry, why this market,” Simson says.
“So often so many people were so lost in what they were showing us in terms of their market”.
3. Be prepared for questions
Simson says Shark Tank is heavily edited, so while some pitches went for two hours only a short grab is shown on screen.
Those two hours involve a lot of questions from the Sharks and often entrepreneurs were unprepared for the questions.
“We are about to make a decision about how we are spending our money, so we need to ask questions,” she says.
4. Know your numbers inside out
Simson says entrepreneurs need to be all over the financial details of their business.
“Really know your numbers,” she says. “Know every number inside out and upside down. I was surprised how many people said ‘I think about’ or ‘maybe around’.”
5. Put yourself in the investor’s shoes
Simson says entrepreneurs need to think about what’s in it for the investor.
“Is it long term?” she says. “What’s the exit strategy?”