Pitching for Investment: 5 lessons I learned watching Dragon’s Den:

I started watching Dragons’ Den again, as I embark on a journey myself, and this actually reignited my passion for start-ups and what it takes to turn your dreams into a business. I have been watching Dragons’ Den on BBC iplayer and The Money Maker on Channel 4 and trying to pick up on the mistakes and then the things that can be done differently to take your business to the next level.

Here are the 6 things I picked up on:

1. Know what you want before you walk into the room

Go in with a plan, what are your deal-breakers, how much are you willing to give away to get what you want? What are you asking for, is it just funding or is it the knowledge and experience from the investor? Walking in knowing this, arms you when things may not go as you expected. The investor may give you a counteroffer, and you may not have much time to really consider if this is a right fit for you, so having this thought out before you walk in will help you.

2. Know your numbers — “We don’t need the shiny numbers; we need the real numbers”

This is one thing that was said on the last episode I saw, the entrepreneur had a great product and pitched as having 7,000 subscribers, which on paper sounds great, but when asked for more information, it became clear that the numbers were not as great as they seemed. The business actually had 3000 people using it as a free product and it wasn’t clear that these subscribers would be willing to pay.

Knowing your numbers since the incorporation of your business, the turnover, and net profit is important as it shows the business growth over the years and its potential growth. Understanding your market size is just as important, as this shows you and the investor who your potential customers.

Anyone giving up their money to invest in your business needs to know the real numbers, to allow them to make the decision based on this. Being able to demonstrate that you have really understood the numbers means you are trustworthy and credible.

3. Valuing your business, finger in the air guesstimate?

In addition to knowing your numbers, is knowing how to value your business. Some entrepreneurs not really valuing their businesses correctly, turning over five figures over 3 years and then valuing their business at £1million plus, which when breaking down the business will expose that this is unrealistic. There are many ways of valuing the business, so it is important if you are going to pitch for investment, you need to know the numbers and reasons for your valuation. Here is an article to help you with that.

4. Branding is important

Having a strong memorable brand is really important and takes a product to a next level, building a recognizable brand that is so strong that if you were just to see the logo you would know what brand it is, without the name. An example of this is Gym Shark, the simple logo is so identifiable, just walking into the gym you can see the shark emblem and without question, you would know it was Gym Shark.

5. Are you investible?

Who you are as a person can also impact whether you get investment or not, how you present and your ability to articulate your knowledge business and of the industry you are in can play a part in an investor being somewhat unsure of your business product or service, but because of the person behind the business, they have a bit more faith in their ability to achieve things together.

These lessons have helped me considering what I need to consider when pitching for funding or investment.

Let me know if you have seen it and what you learned.