Thursday, March 03, 2011

How to Annoy Your Dragons

In February I took part in the opening auditions for the next season of  Dragons' Den. It kicked off more than a month of auditions all across the country. They're now going on, and you can find more details here:

My column for the National Post  summed up my experiences auditioning "pitchers" who want a chance to sell their business ideas to the Dragons on national TV next year. As I wrote, "If you want to make it on Dragons' Den — or impress any kind of real-life investor -- you had better not make the kinds of mistakes I saw during my deputy day."
Here's the short version:

Misunderstanding investors' motives The Dragons, like most venture-capital investors, only want to invest in scalable businesses. If you don't know what that means, you haven't got one.

Not knowing your market How many people will buy your product? When? These are essential calculations, even if they're mainly guesswork.

Never confuse a capitalist Keep your pitch clear and simple.

Not understanding your customers Don't wait to talk to customers till your product or business plan is picture-perfect — make them consultative partners from Day 1.

Being afraid to give up equity A venture investor won't make any money unless you do, too.

Neglecting to tell a coherent story Let investors know (briefly) where your idea or product came from, why this opportunity is huge, and why you're the best partner to pull all this off.

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