BEFORE feeding your business idea to Sharks, find out what will score you the biggest bite.
Steve Baxter, resident Shark on TEN's Shark Tank, has provided a few tips to Brisbane Business News for entrepreneurs considering standing in the investor firing line.
"There are lots of things I don't like in a pitch," says Baxter, who has gained a reputation for being a straight-talker.
"I don't mind if they are nervous - lots of people come across exceptionally nervous when pitching on the show - but a lot of other things bug me."
Don't be a hypocrite
"Having a split focus will never work," says Baxter.
"Some entrepreneurs have a day job or another business following almost like a parallel path where they are trying to do both at the same time.
"I don't like it when they are hypocritical and won't buy into their business - going from one safe job to another."
Know how to add up
"There's a reason you can put a high valuation on a business and no one to date on Shark Tank has given a good reason as to why they can do this," says Baxter.
"Valuations that aren't backed by any reasonable judging of the problem and the solution - worse when you have a solution to a problem that never existed - really don't sit well with me.
"Valuation for me is putting a risk premium on the entrepreneur being able to carry through with that business judged on their level of skill in terms of being a businessperson.
"Another important thing about numbers - if you don't know yours, then you really shouldn't be in business."
Demonstrate traction in a tangible way
"I like investing in traction, which is best proven through revenue but can also be proven through usage," says Baxter.
"Facebook is a good example of a business that had high usage in the early days coupled with no revenue, but was always a great business.
"Some businesses have low traction but revenue multiples or density are quite good."
Don't try bartering on your last legs
"It's very hard to negotiate with a single buyer," says Baxter.
"If you only have one investor left in the game, when you change your bid you are only bidding against yourself."
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