In 2014, Dawoon Kang and Sara Margulis found themselves on the receiving end of piercing stares and prodding questions from five of the most famous investors in the U.S. They were contestants on “Shark Tank.”
Kang and her two sister-cofounders, Soo and Arum, were pitching their 2-year-old startup, Coffee Meets Bagel. It’s is a dating app that positions itself as an alternative to swipe-right culture and a champion of slow, meaningful dating.
Margulis and her husband, Josh, were pitching Honeyfund, a leading wedding-gift and honeymoon registry website — a brainchild based on their own honeymoon experience.
They all looked slightly terrified, but none of them crumpled. In fact, they nailed it.
The Margulises left with a deal from Kevin O’Leary, a multimillionaire Canadian businessman. And the Kangs turned down a proposition from Mark Cuban, the billionaire owner of the Dallas Mavericks, to sell their business on-the-spot for $30 million.
Five years later, both businesses are flourishing.
Being on “Shark Tank” is a “do or die moment,” Margulis said. “If you screw it up, you’re going to be regretting it for the rest of your life.”
So what helped them keep their composure? A killer business pitch and a lot of practice.
How to Craft a Killer Business Pitch
In an elevator. At a networking event. With an old colleague. Or maybe on national television, staring down five Sharks. There are myriad situations where having a well-crafted pitch can instantly elevate your business’s mission, profile and — if you’re lucky ― coffers.
Do Your Homework
A good pitch starts with a good business plan because, essentially, a business pitch is a tailored, verbal summary of your business plan.
When starting a business, entrepreneurs sometimes overlook the importance of having an official business plan. Don’t know what to include in one? Dr. William Sahlman, author and professor at Harvard Business School, has your back.
In his article-turned-book “How to Write a Great Business Plan,” Sahlman lays out the contents and purpose of a business plan. He says every great business plan should mention:
The People: Who’s running the show? Include yourself, other co-founders and all managerial positions. Be sure to show your personality as well as expertise and skill set.
The Opportunity: Here’s where you explain your product or service and who will buy it. Highlight price points, customer demographics and competitors.
The Context: This should cover all “factors that inevitably change but cannot be controlled by the entrepreneur,” writes Sahlman. Such factors include laws, regulations and economic trends that could impact your business.
The Risk and Reward: This is where, as responsibly as possible, you should use numbers to predict the future. Entrepreneurship is not all rose-colored monocles and top hats. Describe the worst-case scenario and how you plan to weather the storm.
Sure, your pitch won’t — and shouldn’t — include every last word of your business plan, but having this info ready to go (i.e. memorized) will help, especially if you’re facing follow-up questions from investors or curious clients.
“Succinctly stating what your business is, why it exists and why it’s better than everyone else is really important,” Margulis said. “Any time you talk about your company, you should be able to convey those things simply.”
Know Your Audience (and Your Environment)
Your story should be tailored to your audience and environment every time you tell it. And your audience is whomever is right in front of you — not necessarily a crowd of people or millions of “Shark Tank” viewers.
Your audience could be your first customer, your first employee or your first investor. Each person needs to hear slightly different things.
Succinctly stating what your business is, why it exists and why it’s better than everyone else is really important.
“How you cater to that audience,” Kang said, “is probably the most important element [of a pitch].”
Your environment is also important. Consider time constraints and formality when giving your speil. Best not to go into full-on presentation mode, talking profit-and-loss and customer acquisition, if you happen to catch a 30-second elevator ride with someone important.
Include a Call to Action
Sara and Josh Margulis, cofounders of Honeyfund, hold up a board they used as part of their pitch on Shark Tank. Photo courtesy of Honeyfund
A good business pitch should demonstrate a clear next step. To articulate it effectively, you’ll need to have done your homework and know your audience.
For Kang and Margulis, that meant asking the Sharks for money. But they couldn’t just say, “Please Sharks, give us your money.” They needed to show exactly why their businesses needed the capital.
“You have to be able to succinctly tell an investor how their money is going to grow your company and return back to them,” Margulis said.
She said a killer business plan should articulate a current barrier that’s in the way of growth, then underscore how an investment will remove that barrier.
That same mindset extends to pitches to your first customers and employees, as well. Let a potential customer know how their feedback will improve your product. Paint a picture of the future of your business with the help of a new, talented employee.
Don’t just dole out your business card and say, “Stay in touch!” That’s wasted paper.
Practice and Practice Some More
There’s really no substitute for being able to tell your business’s story in a way that resonates with people on the drop of a dime. That requires practice — and a little more practice.
“The first [few] times you pitch,” Kang said, “it’s not going to come out the way you think.”
Pacing, enthusiasm and data are a lot to balance all at the same time. You may have really wanted a certain number to stick in your audience’s mind, but maybe they were stuck on something you said minutes ago and totally missed it. Or maybe you’re using way too many numbers and not enough personality. There’s no good way to know unless you’re actually pitching to people.
As the CEO of Coffee Meets Bagel, Kang says she’s constantly pitching her business.
“It feels like all the time to me, but what I’m realizing is it’s actually not enough,” she said. “There’s a saying, ‘Unless you’ve said it 10 times, you actually haven’t said it.’”
Apply the Feedback
Your business pitch is never really finished. As you continue to tell your story, you may learn that people want to hear more about something you thought was unimportant. Hear them out, and make the changes to keep your pitch fresh and engaging.
What good is all that practice if you’re not adapting your pitch and style? Take the feedback you get to heart with the understanding that it can only help you better connect with your audience.
Both Kang and Margulis said that the process of poring over the details of their businesses was illuminating.
“There’s a benefit in getting your company ready to pitch to an investor, even if you never actually deliver the pitch,” Margulis said. “And that’s just understanding your company from the perspective of an investor.”
When she first started pitching Coffee Meets Bagel, Kang took the name of the company for granted. She thought — as most might assume — that investors just want to hear hard facts and numbers. But in reality, they really wanted to hear the story behind the name. (Bagel is an homage to NYC, where the company was founded. And what best complements a bagel?)
“Investors are humans at the end of the day,” Kang said. “Having an entertaining, fun story in a pitch… really helps you stick.”
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.