THE ULTIMATE GUIDE TO PITCHING IN DRAGON’S DEN!
(This blog post will be updated throughout time, I’ll share what happens behind the scene as it happens!)
I was lucky enough to get to pitch to the Dragons (Canadian version of Shark Tank).
The first time was for Next Gen Den : the web version of the Canadian show. The second time was for the French version of the show in Quebec, Canada. Smaller viewership, but still worth it. I’ve been meaning to talk about my experience for a while now, but since I was going to be on TV, I wasn’t allowed to talk about anything that happened or the fact that I actually went to the show. So I figured, since I got both a no AND a yes from the Dragons, that I’d share here my experience and give a few pointer for the people who are going to pitch; I know I wish I knew how it was going to be.
In each category, I talk about both my experiences, takeaways from what happened to me, and stuff to consider or do at that point.
1 : Application
The application process itself is pretty straightforward : fill an online form detailing every aspect of your business and hope for the best.
Also, before applying, you should consider the followings :
When to pitch to the Dragons?
The timing : Are you ready? Is your company ready? If you are still at idea stage, you might want to hold off on pitching the dragons. 10 minutes on TV if you are not ready, can totally destroy any hopes you might have to succeed with a business. What might not seem like much when you’re pitching could be a big problem in the near future. Even if you think it’s not that bad, they’ll make sure to highlight it and put you on the spot. Don’t expect the editing to improve on it either.
Also, you want to wait until you do not need the money. Why?
First, the whole process takes a ridiculous amount of time. I’ve applied to pitch in November, Shot early march and will not get money until the summer time. So, ball park, more or less 6 to 8 months. If you pitch because you need the money right now, most likely, your company will be dead before the show airs. Not needing the money also helps you not to take a rushed decision when you are in front of them.
What kind of business to pitch?
The sector vs the dragons/sharks : if none of them know your industry, maybe they simply won’t be able to help you. Before applying do minimal research on them and the different shows to know who you should be pitching to. Angel investors will typically invest in something they know. If there is a food guys in one of the chairs, I know I’ll go!
Do you need the Dragons/Sharks at all?
(AKA Why do you want to pitch in the first place?) Could you just do it on your own? Did you have a look at the other options too? They are not to be super kind, and no it’s not normal to giveaway 50% of your business in 10 minutes to complete strangers just because they’re on TV. You should still have 50% no matter what! Don’t do it!
Having the Dragons on board with your business is an amazing marketing boost, probably the best you can get in your first year. They have a amazing network you can benefit from. However, they are seasoned business people, and when they smell a bad investment, they can destroy you on prime time television. If the type of business is not for them or they don’t like the valuation, it’ll be fine: you’ll have some free promo on television and learn so good life lessons. But if you try to pull one on them, prepare for your experience to become the worst nightmare of your career.
Then let’s assume they say yes. On TV, everyone will think you’ve got the greatest deal and that you’re headed for success. However, they’re business people, they don’t put 100 K in a venture just because they like your style and they think you’re cool. They’ll try to take everything from you and if the deal doesn’t pull through, you’ll be stuck between the humiliating truth that you didn’t get the money from the big investors and the beautiful lie that you got their support and everyone believe you have their investment. Before considering pitching on TV, look for local ventures and investors. They might invest just as much, have a network and input just as good, but you will not have to do it in front of millions of viewers that will scrutinize you each step of the way.
How to value your company?
I’m not going to give a master class on valuation. That alone could be subject to years of discussion, but I’m going to say this: valuation is the problem of over 60% of the deal who didn’t happen. For a few reasons, entrepreneur over evaluate, investors under evaluate and the rest well… It’s complicated.
I did just that mistake. The reason I did not get a deal the first time was because of valuation. After watching the whole first season of NGD, I knew that one of them was tearing apart every company’s valuation, Sometimes offering only 20% of the initial ask. I wanted to have some wiggleroom. So I, on purpose, raised my valuation to get devalued by him and come up with something in between that would be interesting to the both of us.
Sounds about fair right?
Well, I over evaluated just a tiny bit. Enough that they didn’t take me seriously and I came ‘’this close’’ to getting an offer, but I didn’t.
Valuation, aka the price tag you put in your company, is the hardest part, especially if you are pre-launch, You have no real numbers. In these cases, there are usually two ways to evaluate a startup. Non startup people will tell you : Take the total amount of cash put in the business and give shares pro rata to the amount : i.e. : 100K total. I put 60K, you put 40, i get 60%. Oh, you have 500K of loan. I don’t care, I put in 60% of the cash you know…I get 60%. That’s the accountant way. That way doesn’t take for account the 12 or 18 month you’ve worked for free and the product you’ve build or the network or the brand or nothing at all. You are worth the cold hard money you have invested. That’s it.
Another way will take into account the business opportunity, the team, the IP, the time put in and the Letters of intent one could have or even early sales. That’s the startup way. That why the amounts are usually higher too! The catch with this is it’s very hard to come to an agreement on these things. For mine, I got anywhere between 100K to 3M. For the same company, in the same 2 months!
The point is, whatever you decide the valuation of your company is, be ready to fight tooth and nail for it. And make sure it does make sense : a good investor will question every reason you might put forward and you better be ready to answer them. If not, you’ll lose them 3 second into the pitch, as it’s the first thing that come out of your mouth after your name!
Valuating too high as valuating too low is dangerous, in both cases you lose credibility as you look like you do not know what you are talking about. I think it’s best to look a bit bold and have arguments ready to defend your case by over evaluating just a tiny bit than letting everybody take stuff from your cold dead hands after being annihilated by the Dragons …
2 : Interview
In some cases, they call you in for an interview, Next Gen Den didn’t have any. They just shot every team they wanted and then filtered after. In the Quebec TV version, we had an interview with the production staff. Their goal was only to filter who was suitable for TV and who wasn’t.
The interview is exactly the same thing than a normal pitch. They have you pitch the company and then ask you some questions. The people doing the interview were the producers and people from the production team. No business people and, therefore, it’s really not hard. You really just have to be likeable and not stressed out too much. That’s pretty much it. They also ask you to have some kind of visual support (ideally what you would bring to the set and even more ideally, the product itself) to have an idea of what it would look like.
The pre-shoot part really begins when you get the call. You are in. What should you do next?
Usually, that’s the moment when you receive a big *ss contract by email that you have to read carefully. They are going to explain to you everything. What to wear, what to say, what to do, where to go and all that stuff. You are assigned a point of contact. That’s the person in charge of you. You can go to that person with any questions or concerns or anything before, during, and after the shoot. Cherish that relationship, you’ll need all the help you can get!
Do your homework : Now, that’s the moment you need to learn as much as possible about each Dragons. How are they like, what do they like and dislike. I suggest you watch all the past seasons and take notes.
I created an excel file to fill out as I watched the past seasons to take notes of the good and not so good pitches to help me prepare.
It helps a lot to predict what the questions are going to be and also have an extensive list of stuff not to say.
Name of business : If needed, I can research it further, see what happened with them or look for other pitches if the person was really good
Summary : What they do in five words; helps figure out which Dragon likes what kind of business
Demand: Their demand + what are they going to do with the money
Offer : If any, and if different from demand, (that happens often) and why
If no deal: What made the Dragons pass? Shitty idea? Wrong valuation? Not interested? Knowing this is crucial because it helps you decide how you are going to pitch the idea to them based on what they have tendency to invest in. If the social impact is really important for a Dragon, you might put it forward more than you normally would if you were to pitch to somebody else, for example.
Key questions and answers: Helps you prepare for them and see what kind of answers works vs what doesn’t. Learn from other’s mistakes. In the questions/answers section, I didn’t write down everything. Only the stuff I felt had something to be learned from i.e. the Dragons were not happy with the answer or why was that the right thing to say to convince them. Takeaways basically.
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NGD was super quick. I got the call on Tuesday and the next Tuesday, I had to be in Toronto at 7am in the studio to shoot. Turn around time wasn’t super great. So you have to be able to get your ducks in a row in no time. Make sure to book NOTHING for the said date. Not until they confirm the shoot date
Some producers are more hands on, some less. For NGD, I had to do back and forth with her for 3 days until she was satisfied with my Pitch. It needed to be TV proof for them and she deliberately asked me not to talk about money. Just the history of the business and then explain what we are and let the Dragons ask the rest of the questions. She insisted that I said super cheesy thing like “Are you ready to bring this business to a boil!” I was ashamed, I would never say that!
For the QC show, they were really more laid-back. They didn’t ask to see my pitch before. I also choose not to prep one. For the simple reason that I know that, anyways, I would be interrupted after 3 seconds and go off script. I got the confirmation of my date a couple weeks before and then it was just waiting for the said date to arrive.
Also, not entirely related, I made the mistake of booking a train ticket for a trip out of town on the same day of my shoot. BAD IDEA! TV shows always go off schedule. You never know when you’ll get out of there. The last thing you want is be stressed in the Den because you are going to miss your train.
4: The Shoot
NGD : Walking in there was like walking to my death. It took me forever to reach the spot I was supposed to stay on. I’ve read dozen of article on how the Dragon analyse you before you’ve even said a word. Some also play with you, let you stay there in silence and see how you are under pressure. I’ve messed up, from the first second I was in the den. (To give you some context here. I was sick. Sick like a dog is not even enough to qualify how shitty I felt. On top of that, I had more or less 24 hour after that pitch to head back to Montreal, pack, write a new pitch for another show, in San Francisco two days later, and get on the plane. This was, no joke, the worst sleepless week of my life). Anyhow, I get there, I say, Hey Dragons my name is…. and Michael Hyatt looks at me and says “Start again. Go back, and re-do it.” They made me re-do it 3 times. My voice was too low, barely audible. H
ow is that for a first impression! The next half hour was painful. Me trying to talk. Me getting interrupted every 3 sec, them asking questions, me never answering anything completely.
I didn’t get an offer, I got close, but didn’t. I got destroyed on valuation. I decided to ask a bit more to get a bit less and have something in the middle, but it was just a bit too much for them to take me seriously…
Second time : Because of my just okay performance of last time, I wasn’t expecting anything. I was stressed out, but nothing overwhelming : just the right amount of “when the hell do I get to present, this is painfully long!” I decided not to prepare a pitch. Which is usually suicide. Because every word counts. I knew that, but I also knew that most likely they would cut me after 30 seconds, like last time, and I would then answer questions and explain everything anyways.
So I didn’t prepare a pitch.
And they stood there politely listening to me talking for quite some time (for a very long time actually).
And then, when I was “done’’ with my improvised pitch about three minutes later, they started asking questions and we then had a pretty great exchange for about 10 minutes. Then, a first Dragon made me an offer and eventually they all pitched in. They needed to talk so they went for the bunker. And I stood there. For about 30 minutes ( I actually have no idea how long it was). The producer had me sit in the Dragons’ chair, and we waited. At some point, I believe one of the producer went to bunker to have the Dragons go back to their seat. They pitched their offer. We agreed, shook hands and I left.
Quick note : if you have an offer or not; ask for feedback. Once one of the Dragon says he passes. Ask why. Ask what you would need to change for him to get on board. For some, it’s just not their cup of tea. For others, it’s because you are not ready and they are going to tell you why If you just bother to ask.
The producers are going to tell you before you get on stage that once they all pass, you say thank you and you leave. They don’t think from a business point
of view. For them it’s all about the viewership. Do what is best for the company. Ask questions. All of them. Experienced entrepreneurs love giving feedback. Good or bad. Take it, say thank you, and when you have no more questions (or if the producer cut you out), leave. When possible, follow up with the ones you felt were more interested by what you are building. They might put you in touch with people who could help you or invest, or they could also invest themselves, but needed a bit more convincing.
5: Post shoot — what happens behind the scenes
First thing to know is : Do not talk about anything. You didn’t go and whatever happened didn’t. If you talk about it publicly and they hear about it. They pretty much won’t air you. Because you risk hurting the viewership and we do not want that. Do we?
Basically, after you’ve hugged everyone of them (if you are a guy, handshake), somebody will take you to a secret back room where all the partners and staff are. I was given a pile of papers to fill for a background check and a contract detailing what was discussed in the Den, I was congratulated by basically everybody on the set and I left.
I sent back the paperwork and I was told I’d hear back from them in April for a follow-up meeting (minimum a month after that).
What happens if you don’t get a deal
First thing to remember : No deal on TV doesn’t mean no deal in real life.
When I said ask as many questions as you can earlier…They can be interested in investing in your business a few months down to road, or if they like you they might introduce you to somebody they know that could be a better fit to your industry.
What happens if you get a deal
According to Robert Herjavec (in his book), only 20% of the deal that happen on TV actually happen after that. So, it’s not because they said yes that they are going to invest. There are plenty of things that could go wrong.
6: Airing day
You won’t necessarily get on TV if you shoot for the show. In the case of NGD since there was no interview, about 1 pitch of 4 got to be aired. In the case of the TV show, we had the interview so the number is much higher. But if for some reason, you’re a total disaster, that you got a deal or not, you won’t be edited. That can happen.
In every case, standard procedure is that they will let you know 1 week before the day your episode airs. Then, and only then, you can start telling people. And by people, I mean SPAM THE WHOLE F*CKING WORLD (that totally depends if you want people to actually watch the show!). We’ve even paid for facebook ads so we were sure Everybody saw it.
In our case, we threw a big airing party. Since neither of the team members owns a TV, we decided to make a happening of this and share our success with people. This a a good way to get people to talk about it even more. People love to watch TV! We were expecting 15–20 people to show up, but we got over 75 Yes from eventbrite and Facebook and about 100 people have showed up! The evening was a great success!
7: What happens after everything!
Last week, I had the chance to talk with a lady who was on the show a few weeks ago to ask her how were things for her so I had an idea of what to expect. This is what she told me : 2000 Views on her LinkedIn profile, + 900 new Facebook likes on her page, 12 investment offers, 7 purchase offers (buy the whole business). All that in 1 week. Oh, and people tell her about once every 2 minutes: “Hey I saw you on TV!”
I’ll let you know how it was for us!
Since we announced we were going to be on the show, a lot of people have contacted me to say congrats, Some close friends, some people I barely know, Some I went to high school with. The support is really great, and it’s amazing (If I haven’t answered you personally, THANKS!).
As for the deal itself, I’ve had 1 phone call last week with the assistant of Mitch Garber to catch up. I should hear from them soon to discuss the real stuff.
Know your numbers!
Show passion. Investors (not just Dragons) invest in people before anything else!
Do not lie! Or try to embellish something that’s ugly. They are going to become your partner. They are there to help you with that kind of shit. They should know about it.
Prove you are the right person to do this : Can somebody with plenty of money copy you in no time?
In both cases, the application process is pretty straight forward. Online forms takes about an hour if you never took the time to write down your pitch. NGD was shot in Toronto, pretty quickly. The Montreal shoot was cooler: we had people to help us prepare, we had food and drinks, and we had a green room all for ourselves to prepare and practice our pitches.
If you’re not 100% sure of all the aspects of your business, you might want to hold off on pitching to the Dragons so soon. You are going to get ripped off. Especially if you are going to the english version. For some reason, Francophone audiences like it a bit more soft. Therefore, Dragons are ‘’nicer’’, but still not nice if you have never pitched your business to some real investor (note here: friends and family are not real investors).
Robert Herjavec wrote a book about his experience as a Dragon and it’s a great tool to understand a ‘’Dragon’s” perspective when pitching and what to expect (link here!).
Questions you will be asked :
What’s in it for me?
Why should I invest?
How do you justify your valuation?
What are you going to do with the money?
If no sales yet, What validation have you done?
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If you have follow-up questions, or if you’re thinking about applying, feel free to reach out to me!
If you’ve liked what you just read, like and share it so other people can read it too!
If you havent seen the show yet, check it out here!
UPDATE #1 : The Week after ( 04.25.16)
We are Monday, it’s officially been a week since the show has aired.
As promised, here is an update on what has happened since it all went down!
Monday night, I had about 150+ friend request on Facebook (What the hell?) and about the same number of text messages, congratulatory emails, and Facebook messages; almost half of them were from people I did not know.
Tuesday morning, I woke up to 354 emails in my inbox. Against all odds, over the week only 15 people contacted me to rent the space. The rest was really mixed. Considering that we are b2b in a very niche market, this 15 people is really good. Some people wanted to sell me stuff : Phone companies, Movers trucks, Real estate brokers, I got one and another. Then some people wanted my help. Because I’m so awesome… I can ‘’apparently’’ do what some can’t. Some people wanted to work with me (that was actually kinda cool!) Some people were simply happy for me.
This week was incredibly stressful. I feel I didn’t get to be happy for more than 5 minutes. Why? Well Monday night was me doing small talk with about 100 different people for about 30 seconds each. Then, the rest of the week? Tuesday was totally lost to Facebook. Reading what people were saying, trying to see what we could do better. How people felt about what we are trying to build. And the rest of the week, I was trying to catch up on all theses emails and messages, links and other requests… As I’m writing this, we are Saturday, it’s 6pm, I’m at the office and for the first day of the week. I felt Like I had a productive day. And I only got here at 1pm!
The show was edited in a way that made everything seem so quick and easy and It wasn’t the case. Fundraising took me over a year and it’s blood, sweat and tears. It’s the exact opposite of what the show made it look like. Don’t get me wrong, this is an awesome thing that is happening to us. People now know our brand and I’ll forever be grateful. Getting advice from people like the dragons is very great for a business!
My linkedin profile went from the #112 most seen of my connection
to # 22 of 795 connection.
Somebody recognized me at Costco….Yep, I’m that famous apparently!
The blog about my experience facing the dragons (this one!) did amazingly well!
We posted on 4 different platform : My linkedin account, the company’s blog, my medium account and the company’s medium account. On my linkedin, I’m currently at 74 likes, 11 shares and something like 500+ reads. On the website, we have more than 500 reads (remember this is a 4000+ word post!) People have been sharing like crazy! and It’s really great to see how much people are actually learning from that post!
Our Facebook page went from 612 likes to 1251 likes on the page. We passed the 1000 threshold Tuesday at around 6pm! less than 24 hours following the show airing. We reached more than 12K view on 1 single post (we went over 30K reach with our post this week)
Twitter was a bit more slow : we went from 580 followers to 677 followers (Twitter is not as widely used in Quebec…)
Website : For the last weeks, we were at about 80 visits daily. Monday and Tuesday finished at respectively 1247 and 1277 unique visitor. It went down a bit afterward to settle to 300 for the last three days. We have an average of 85% new visitors and are at 14,4K page view since April first! (We have put our website live in February, we only had a landing page before that!)
I had an interview on Radio-Canada Premiere radio in Montreal : Listen to it here!
Next update, I’ll take you through the financing! Stay tuned!