1. Business Ideas
  2. Business Plans
  3. Startup Basics
  4. Startup Funding
  5. Franchising
  6. Success Stories
  7. Entrepreneurs
  1. Sales & Marketing
  2. Finances
  3. Your Team
  4. Technology
  5. Social Media
  6. Security
  1. Get the Job
  2. Get Ahead
  3. Office Life
  4. Work-Life Balance
  5. Home Office
  1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
  1. HR Solutions
  2. Financial Solutions
  3. Marketing Solutions
  4. Security Solutions
  5. Retail Solutions
  6. SMB Solutions
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Start Your Business Entrepreneurs

Shark Tank Survival: 20 Investment Tips for Entrepreneurs

Shark Tank Survival: 20 Investment Tips for Entrepreneurs
Credit: Minerva Studio/Shutterstock

Do you watch "Shark Tank"? The hit ABC reality show gives entrepreneurs the chance to pitch their businesses to famous investors, or "sharks," like QVC-TV star Lori Greiner and Dallas Mavericks owner Mark Cuban, in the hopes of making a deal.

What would you do if you were in those entrepreneurs' shoes? We asked investors and entrepreneurs for their best advice for businesses seeking investments.

These tips should make it easier for you to swim with the sharks:

Make sure it's what you want

Make sure you want other people's money and interests mingling with your business. Taking on investors means giving away control and potential profit. Investor relationships can be very beneficial to the entrepreneur, but they also take time and management. Some investors are very hands off and make themselves available when your team needs them. Others will want to be in the mix with you, and your job is to diplomatically field their emails and phone calls. —Kelly Trumphour, founder, See Jane Invest

Don't over- (or under-) value your business

Understand your worth. As a new business owner, you are not worth more than $75,000 your first year. If I'm looking through your financials, and you're paying yourself more, you're mismanaging funds. Yes, you're working hard and many hours, and paying yourself first is important, but until your business is financially stable, you can't afford to make more. — Nicole L. Royer, entrepreneurial coach

Have a positive attitude

Be happy and hire happy people. Any investor will want to know that, A) you're passionate and motivated, and B) you've surrounded yourself with people who are, too. [Hire] happy people at every level, from truck team members to corporate staff. A positive team means a motivated and ambitious team that will help drive success. — Brian Scudamore, founder and CEO, 1-800-GOT-JUNK?

Try to keep your equity

Exhaust all sources of funds before giving away equity. It may seem like equity is cheaper — there is no interest, right? But you will pay your equity partners forever. While debt may seem riskier, if you believe in your business, you should take on as much debt as you can stomach before giving away any equity. — Ian Jackson, managing partner, Enshored

Gain traction first

If you already have a working product, obtain and showcase as much traction as you possibly can. In the investment world, traction is the magic word. Traction can be many things. It can be registered users, paying customers, press articles, having a large audience, letters of intention, partnerships or even a very small group of people who couldn't live without what you are offering. Traction is the most effective way to prove that your solution creates interest and is monetizable. — David Arnoux, co-founder and head of growth, Twoodo

Test your product

Do test your product at the POC (proof of concept) level with a few test customers through a Joint Development Program. This helps to create faith in investors that there is demand and also helps you build a product that will see quick adoption from the market. — Dr. Som Singh, founder, Unspun Consulting Group

Discuss demand

It is really important to articulate that the product or service that you are pitching is solving an actual need. Many times, entrepreneurs immediately start to explain their ideas, technologies, or approach to delivering better or more efficient service to the market. They gloss over whether or not there is an actual need in the marketplace for what their company is offering. — Charlie Harary, venture capitalist and professor of entrepreneurship, Syms School of Business

Work hard

Be prepared to work super overtime, break the results down into specific foreseeable levels and not stop until you can provide clear results on every level for all interested parties. Easier said than done, but after it's done, you'll make it look easy. — Stephanie Adams-Nicolai, founder and CEO, GODDESSY Organics

Control your risk

Determine what percentage of your account that you want to invest on any given trade. [If you were to] divide your portfolio into slices of pie, make sure to have a large portion left if an investment goes against you. It doesn't make sense to over-allocate or use leverage if the negative consequences are catastrophic to your account. Many professionals never risk more than 3 to 5 percent of their account, so when they are incorrect, in excess of 95 percent of the account is intact. — Alan Knuckman, chief options strategist, Barchart.com

Research the competition

Know your competition inside and out. Know their strengths and weaknesses, know who the main game players are, know everything. Always be ready for a plan of attack when things don't go your way. — Michael Bolger, co-founder and CEO, hovelstay.com

Come prepared

Be very prepared to answer every single question an investor might have. That will show that you have done your homework and thought everything through. If you hesitate, it will give your investor a chance to hesitate to invest [in] or fund you. — Jenny Feterovich, co-founder, Parliament Studios

Think long term

Think through the trajectory of your business. Investors want to know that you have thought about your future and that their investment will have a long-term positive impact. — Shemiah Williams, president, Modern Graffiti Marketing Group

Learn from negative feedback

The prevailing advice is to ignore [naysayers]. Not so. Their negative comments should help guide your homework, the goal being to know more than the naysayers and to possibly overwhelm their stuck-in-a-rut adherence to the past, enabling out-of-the-box reinvention. — Lloyd Shefsky, author and clinical professor of entrepreneurship, Kellogg School of Management

Be honest

Always be upfront and truthful about anything in your past — the good, the bad, the ugly. If you think it is irrelevant or will not be discovered, you will get burned. Nothing is worse than the cover-up. Investors will appreciate your candid recap of events (whatever they may be) and will respond accordingly. If something is uncovered that you did not disclose, the lie or lack of disclosure about the incident is worse than the incident itself. — Ken Springer, president, Corporate Resolutions

Go all in

Really believe in yourself. Every entrepreneur will say they believe in [themselves]. … But ask this: Are you willing to get a second mortgage on your house to fund your venture? Are you willing to cash in your 401k or live on credit cards? Yes? Then you truly believe in yourself and your venture, and I will believe, too. No? Then I'm not about to cut you a check. If you're not willing to go all in, it's a hobby with a safety net, not a business. — Bill Balderaz, angel investor and president, Fathom Healthcare

Try networking

Attend events where you meet potential investors such as Global Entrepreneur Week and the Hatchery's Hatch Match. These are ideal events to network and present your business and ideas. — Ian Aronovich, president and co-founder, GovernmentAuctions.org

Split your funding

Split investments between now money and strategic money. Why? Now money allows you to keep the momentum going strong, while strategic money allows you to take your business to the next level. — Brian J. Marvin, co-founder, Bringhub

Ask your family

Raise money first from family and friends. Odds are that none of them want to give you money, but you've got to try. If your business idea can't raise money from people who know you and trust you, you're going to have an even harder time raising money from strangers. — Dan de Grandpre, co-founder and CEO, DealNews

Explore your options

Understand all your funding options before going to market. [The] sort of assets underlying the business, where it is in terms of lifecycle, etc. will have a huge impact on what sort of investors would be attracted to the business and, just as importantly, what sort of terms you'll have to give on. Many people seem to have difficulty effectively fundraising, in no small part because they are talking to the wrong sort of investors. — Colin Darretta, founder, WellPath Solutions

Wait until it's finalized

Never consider the investment a done deal until the deal is actually completed. So many times, a business owner thinks they have a deal and then makes decisions based on that deal being consummated. When it doesn't happen, or the investor drags their feet, the results can be disastrous. — Bill Watson, founder and director, Advanced Business Group

Originally published on Business News Daily

Correction: An earlier version of this article misspelled Charlie Harary's last name.

Brittney Helmrich

Brittney M. Helmrich graduated from Drew University in 2012 with a B.A. in History and Creative Writing. She joined the Business News Daily team in 2014 after working as the editor-in-chief of an online college life and advice publication for two years. Follow Brittney on Twitter at @brittneyplz, or contact her by email.

start-your-business
See All