If you are like me, and you don’t have a business of your own (yet), the thought of someday running your own business never completely leaves your mind. Even if you are good at regularly pushing aside those distracting thoughts, you still find that they have a way of unexpectedly resurfacing from time to time.
At the strangest times, you still catch yourself daydreaming of coming up with that perfect idea and wishing for the chance, the time and the money to test it out. A show like Shark Tank is frustratingly effective at reawakening or stirring up any dormant entrepreneurial thoughts or feelings that tempt you to reconsider the possibilities of “what if?”
Yet, you are practical, too. You know that having good idea is not the same as being able to make money with it.
It Only Starts with the Idea
Recently, while watching an episode of Shark Tank, which inevitably stirred up those very temptations and questions again for me, I unexpectedly found myself entertaining a more productive question. I decided to put myself in the shoes of the sharks from The Shark Tank and asked myself this: “What would The Sharks do?” (WWTSD).
Investors are more pragmatic risk-takers than dreamers, right? What if I thought more like an investor? What would I need to do to convince myself to invest in me?
At the most basic level, investors care about how quickly they can make their money back and get a return on their investment in you. To that end, they are investing in not just your idea, but also in you and your business model.
What Do Investors Care About?
Investors want to know what you will be doing with their money to make your business grow. What will you be spending their money on? Loosely paraphrasing what Barbara Corcoran once said in a recent episode: investors invest and advise, but they expect you to be the entrepreneur. You are the person who runs the business even when/if an investor has a percentage of equity ownership in your business. Having the idea and getting the money says nothing about making it work.
Another point from this show, this time from Robert Herjavec who explains that investors are not interested in throwing a lifeline to a struggling business, even if that business is based on a good idea. Investors want to invest in businesses that are on the upswing and with a recent proven sales history and a calculable growth potential (i.e., a reasonable valuation).
Investors also care about how much work, time and dedication will come from you, and how much of the same is expected from them. Investors value their time almost more than their money. Time is limited for all of us, while income earning potential is not. If your success is based too much on needing your investor to put in a great deal of time and work, then the partnership probably won’t be worth it to them.
Where You Matter Most
Investors invest in people who they trust and feel comfortable working with. In the end, you and your attitude are as important to an investor as your idea.
Your personality and disposition can be sensed in a flash, often at first glance. Attitude is palpable. Confidence is different from arrogance. Enthusiasm is different from desperation. Realism is different from delusion. Mutual appreciation and respect is critical.
Yet even if you pass the personality compatibility test, and you prove to be a good person with the right attitude who is a hard worker, you also need to show resilience, i.e., that you won’t give up as soon as the going gets tough.
The Strength of Your Passion
Similar to having a good idea, while your passion is extremely important, your passion alone is not enough. Your passion and preparation is crucial to selling your idea. Without passion, you won’t be able to show you are willing to do whatever it takes to make the business work. Yet passion without a solid business model or passion with a history of poor financial decisions will still sink you.
In the end, you and your business model matter as much as having a great idea and having access to money. That is what the investors on The Shark Tank taught me. That is the learning that I now keep in mind as I consider new business ideas.
Who says you can’t learn anything useful from television these days? Still, learning something is not the same as doing something with it. Now, it’s time to put this to work, right?
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Photo Credit: title=”Plant Love” by dizfunkshinal, on Flickr
