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Updated Oct 24, 2023

Shark Tank Survival: Investment Tips for Entrepreneurs

These investment tips will help you swim with the sharks.

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Sean Peek, Business Ownership Insider and Senior Analyst
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Entrepreneurs and small business owners worldwide look to the hit ABC reality show Shark Tank for business ideas and helpful industry tips. Entrepreneurs receive advice from prominent investors, or “sharks” – such as Lori Greiner, “The Queen of QVC;” Kevin O’Leary, otherwise known as “Mr. Wonderful;” and Dallas Mavericks owner and billionaire Mark Cuban. The show also offers investment opportunities to contestants who effectively sell the sharks on their business ventures.

Securing investments isn’t easy, but it’s possible with the right connections and foresight. We’ll explore best practices, advice, and tips from successful entrepreneurs and investors.

Investment tips from the sharks

Here are some investment tips from successful entrepreneurs for business owners who need funding so they, too, can swim with the sharks.

1. Try to keep your equity.

“Exhaust all sources of funds before giving away equity. It may seem like equity is cheaper – there’s no interest, right? But you’ll 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, CEO of Enshored

2. 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 of Growth Tribe

Did You Know?Did you know
According to NPR, more than 5.4 million applications were filed for new businesses in 2021 – a record pace for entrepreneurship.

3. 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.” – Som Singh, Ph.D., founder of Unspun Consulting Group

4. 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% of their account, so when they are incorrect, in excess of 95% of the account is intact.” – Alan Knuckman, chief marketing strategist at Bulls Eye Option

5. 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, advisory board member of Driftr

TipTip
Conduct a routine competitor analysis to understand your competitors' strengths and weaknesses and identify marketplace gaps.

6. 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, co-founder and CEO of MedaDoc

FYIDid you know
Other networking avenues include tapping into your alumni network and proactively expanding your professional network.

7. 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 Marvin, founder of RunBikeHike Club

8. 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 of DealNews

Key TakeawayKey takeaway
Aside from financial support, entrepreneurs rely on family and friends for emotional and even operational support.
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Sean Peek, Business Ownership Insider and Senior Analyst
Sean Peek is the co-founder of a self-funded small business that employs more than a dozen team members. His years of hands-on entrepreneurial experience in bootstrapping, operations management, process automation and leadership have strengthened his knowledge of the B2B world and the most pressing issues facing business owners today. Peek uses his expertise to guide fellow small business owners and aspiring entrepreneurs in the areas of marketing, finance and software technology. Peek excels at developing customer bases and fostering long-term client relationships, using lean principles to drive efficiency and cost-saving, and identifying growth areas. He has demonstrated his business savvy through collaborations with Forbes, Inc., Entrepreneur and the U.S. Chamber of Commerce.
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