If you’re a fan of Shark Tank, you’re probably like me: begging startup founders not to stumble over the valuation question. Telling Mr. Wonderful not to be so harsh on the entrepreneurs. Urging business owners to go with Mark Cuban’s offer, as he’s best suited for helping the company. It’s my equivalent of talking to the TV during sports.
Whether you talk to your TV or not, there’s a lot to be learned from Shark Tank.
1. Know Your Numbers
The single most fact that seems to turn off the sharks from a potential deal is a founder not understanding valuation. You don’t have to have an MBA to know that if you haven’t made any sales, your company is not valued at $1 million. And know that the percent you want to offer the sharks also determines your valuation. That’s why the sharks start calculating on their notepads the minute a founder mentions the amount he’s seeking and the percent he’s willing to give up.