When fashion and marketing expert Daymond John is watching entrepreneurs pitch their products to him on ABC’s hit show “Shark Tank,” he’s more focused on the person than the product.
“We’re not investing in companies. We’re investing in people,” he tells Business Insider.
And the main thing he’s looking for is the assurance that he’s going to get a return on his investment.
“No matter what, the most important part is that you need to make the investors feel like you’re going to wake up every day and bust your butt,” he says.
John says that he certainly gets excited about opportunities to jump into a new industry or market, but if he doesn’t like an entrepreneur, he’s not going to want to work with them.
“You are going to have to potentially talk to the person on the other side of that pitch every day for the next 20 years,” he says. “Can you deal with that person?”
Obviously a good personality isn’t going to win an entrepreneur any money on its own, but if they have got a good product and business savvy, there are ways to increase the chance of making a good impression on the Sharks, John says.
He wants an entrepreneur who is knowledgeable about their product and industry but isn’t arrogant and stubborn. “The investors may feel like, ‘You know what, you’re so smart, I need you, because this is something tech-based and I need you to figure it out.’ Or they may feel like, ‘You know what, you’re so smart that I’m never going to see my money because you’ll be stealing it every two minutes,'” he says.
He also looks for entrepreneurs who are energetic — but not excessively energetic, because that raises a red flag for him that the founder may be using smoke and mirrors.
And to prove to John that they can be trusted to work hard, entrepreneurs need to be honest. “Honesty means that you don’t go up there and act like what you’re doing is so great and that it’s never had any problems. Tell me about the problems as much as you tell about the opportunities, and how you may have solved some of the problems,” he says.
John tells us that his favourite pitch may be from Scrub Daddy founder Aaron Krause, a company Lori Greiner invested in, because it “was like watching an infomercial without the editing.” He found Krause earnest, prepared, and likeable.
John’s least favourite pitches came from Scottevest‘s Scott Jordan and Copa Di Vino‘s James Martin. He found the entrepreneurs to be obnoxious know-it-alls who were convinced they were smarter than the Sharks, an approach that investors certainly don’t appreciate.
And finally, John says he gets frustrated by entrepreneurs who appear to only go on the show for the publicity, without any intention of handing over a decent portion of their company to a Shark in return for their capital and expertise.
So, if you’re going to pitch to the Sharks, John says, be humble and informed. And hope that luck is on your side.
“You can’t know what the other person is going to like about you. You may look like their husband’s ex-girlfriend!” John says.
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