If you’re lucky enough to strut down Shark Tank’s infamous hallway -- or to pitch your startup in front of potential investors anywhere -- be confident, not cocky and be ready to bare your warts, so to speak.
Daymond John, the popular startup pitch show’s resident branding expert, says pretending that your brand is spotless, like it’s never seen hard times, is the fastest way to shoot your pitch in the foot. And your chance at investor cash, too.
The serial investor and Shopify brand ambassador told Entrepreneur.com that “sounding too perfect” is the biggest and most common mistake he sees entrepreneurs make when they pitch their products and business concepts. You’ll be more likely to score his venture dollars -- or any potential investor’s -- if you suck it up and talk openly about the mistakes you’ve made along the bumpy road of entrepreneurship, he says. Be real.
“Don’t make your pitch, or your brand backstory, sound all rosy because I don’t care what brand you look at or how big they are now, all of us know that times have not been great all of the time,” he says. “If you can’t come clean and tell investors how and why you failed, that raises a red flag. They need to see that you learned from it and came back stronger.”
John knows quite a bit about the “bad times” that can go hand-in-hand with launching a fledgling brand. Times were anything but rosy for the former Red Lobster waiter in the late 1980s and early 1990s, back when he was hustling hand-sewn wool FUBU hats between shifts on the streets of Hollis, Queens.
Strapped for cash, John failed to successfully launch his inaugural hip-hop fashion line three times. In 1992, he and his three co-founders finally got it off the ground and, not long after, into the mainstream thanks to big publicity boosts from rappers like LL Cool J and the late Notorious B.I.G. FUBU was reborn as FB Legacy in 2010.
John is an open book about his business failures. If you tell the truth about yours, even the ugly truth, he says investors will be more likely to believe in you and to bet their money on your brand.
To see John field startup pitches, check out the Season Six premiere of Shark Tank this Friday, Sept. 26 from 8 to 10 p.m. ET/PT on your local ABC station.