When Pitching To VCs

SHARK TANK - "Episode 511" - A husband & wife team from Austin, TX shock the Sharks' with their extremely lucrative online sales for knee-high boot socks. Two publicists from Santa Monica, CA created a stylish clutch for easy access to your smart phone and just the essentials. A couple from San Ramon, CA solve a school day dilemma by providing kids a way to personalize and create their own lunchbox designs, and a finance expert from Long Island City, NY has a sweet take on customizing the chocolate bar of your dreams. Also, an update on Corey Ward & Trew Quackenbush from Cincinnati, OH and Tom + Chee, their gourmet grilled cheese sandwiches made with artisan cheese and glazed donuts, which Barbara Corcoran and Mark Cuban invested in during Season 4, on "Shark Tank," FRIDAY, NOVEMBER 22 (9:00-10:01 p.m., ET) on the ABC Television Network. (ABC/Adam Taylor) MARK CUBAN, BARBARA CORCORAN, KEVIN O'LEARY, LORI GREINER, ROBERT HERJAVEC

Investors might think that you are in a ‘hot sector’ and like your team – but how to keep them interested and get funded? Here are some tips:

Market Size – a VC’s favorite topic for a detailed discussion: market size, market opportunity, etc. Any market sizing higher than $100 billion might mean that the entrepreneur has no idea how to analyze the market to find the initial target customer segment (and thus a smaller addressable market), or the entrepreneur has no idea how to tie the business model to a market-sizing calculation.

Competition – When a VC asks who is the competition, what they really want to know is if there’s already some proof of concept and some investment validation made in the space. Is there a successful similar case in Europe or India?

Advisors – While having “big shots” as advisors is great, being able to say “adviser AND investor” is so much better. It doesn’t mean that all your advisers and mentors have to invest. In the end, what is important to a VC is you and your team.

Uncapped Note – Maybe if you are inevitably successful..but in most cases the point of investors is to have smart people with money on your side.

Customer Acquisition Plan – Your product won’t sell itself so customer acquisition is always a concern. Entrepreneurs need to have a really detailed customer acquisition plan or show some metrics that allay the fears that acquisition would be too expensive or will never scale.

Do Market Research – Just do it, unless you are Steve Jobs and can give future to people.

Business Model Matters – Monetization and revenue are important: abilities to build a large audience is nothing without figuring out a way to make money on it.

Fundraising – Know how much you are raising and on what terms – as well as what you will spend it on. You have to have the answers prepared ahead on this – do the math, talk to your experts and be ready with all the details.