Four Most Common and Avoidable Mistakes Entrepreneurs Make in the Shark Tank Pitch

Shark Tank is an American business reality television series that gives any entrepreneur a chance to pitch their business (not just idea) and ask for money in return for fair percentage of equity in their business. A lot of entrepreneurs get a deal out of tank, a lot of them don't. Some entrepreneurs get exactly what they were asking for and few gets more money with more valuation and more sharks in the deal.

But a lot of entrepreneurs don't get the deal or they lose some of the sharks because of one of these mistakes. 

I haven't watched all of the Shark Tank episodes but from the episodes I have watched, these were the mistakes I found that were mostly deal breakers and could have been avoided most certainly.

1. Valuing their company extremely higher than they can prove it

This is, I would say, the number one point most sharks struggle to deal with: Entrepreneurs have valued their company way higher than they can prove.

Because of absurdly high valuation that sharks can't see the worth, they gain the leverage to get more equity in the company for the money asked. 3 most frequent outcomes after this mistake are: (i) Shark goes out. (ii) Shark ask for way more equity for the money asked. (iii) The choice entrepreneur has now is, either to let go of bigger equity and get the deal or deny the offer.  

2. Asking for too much money when they actually can have it other ways

Some of the entrepreneurs need investor, shark, on board more than they need the money. Sure they need the money but when they can have some amount of money other ways, still they ask a lot more money from sharks.

What this leads to is shark being more hesitant in considering investing in it. Sharks, for big amount of money ask for big percentage of equity, which can be a lot more in terms of money in the future, if company goes onto becoming something bigger.

If entrepreneurs would have asked for less money. Shark wouldn't ask for big chunk of their company. This way you can get shark on board. And don't forget getting right people on team is more important than money.

3. Annoying the sharks

This is really something that comes out unexpected. Entrepreneurs get desperate or speak something that piss sharks off. Or say something wrong like numbers or statements that they can't back up with facts. 

This way they get screwed. Sharks after getting annoyed get out of the negotiation and this sometimes impact how things go afterwards. 

But in the case of annoying the sharks, some of the entrepreneurs still got the deal with other sharks. So, sometimes it still end well.

4. Getting too early in the Shark Tank

Now this is a real struggle. Like some of the company's are too early for an investment. But one could argue that to get the company to next level or to even keep the company running they need money and an investor. 

But company is very early. So it doesn't has many customers, little sales, lower profits and little growth. So entrepreneur is vulnerable and shark has the leverage to get the big percentage of company equity, because it's much of a risk for them as well. 

So entrepreneurs need to figure out how to keep the company running for some period of time before getting shark's money. This way you'll have more sales, customer base, growth and so on.