Listen; we have serious VC investors with a specific interest in F&B businesses coming to InFlavour. We’ll share their knowledge with you over the coming months, both at the event and here in our newsletter.
But today, we want to tell you what we’ve learnt about pitching an F&B business from…watching TV.
Specifically, from watching a UK show called Dragons’ Den.
It’s OK – you don’t have to take us totally seriously. But if you’re an entrepreneur with an eye on investment, maybe you’ll find a gem here.
It’s a popular TV show in the UK. A panel of investors (the ‘dragons’) sit in a room with lots of faux-industrial decor, and entrepreneurs walk into the room, one by one, to pitch their business. The dragons then throw lots of (usually very blunt) questions at the entrepreneurs, and then they decide whether or not to invest in the business on offer.
The show actually originated in Japan back in 2001, where it’s known as The Tigers of Money. And the American version (created after Dragons’ Den) is called Shark Tank.
Yep. Actually, some of the most successful businesses to come out of Dragons’ Den are in the F&B sector.
F&B entrepreneurs have featured on Dragons’ Den since its first series, way back in 2005. And their successes and flops have shown us some of the best and worst ways to approach investors.
Here are those lessons.
Time and time again, experienced business people walk into the den with a new F&B business. They know their numbers, their profit and loss sheets are impeccable and perfectly memorised, and they’ve got a seemingly solid marketing strategy. They have the experience to build a successful business…but the dragons lean back in their chairs, narrow their eyes, and don’t engage.
And then someone with much less experience walks in. They too have a firm grasp on their numbers and they’re clearly competent, but they don’t have the business track record or the perfectly structured marketing funnel. What they do have is an incredibly clear enthusiasm for their product – they love it. They really believe in it. They’re genuinely excited.
It’s those excited, passionate entrepreneurs who make the dragons sit forward in their seats and start jostling to make the best offer.
Business experience is something you gain over time. But passion for your business will see you through the ups and downs of launch and growth – and investors know that.
When you pitch to an investor, your goal is to capture their attention. But if you do that by being dishonest, it won’t work.
Firstly, most investors have sat through a lot of pitches; and even if they’re relatively new to investing, they’ve probably built their own successful businesses too. They know how to ask the right questions to make sure that what you tell them is accurate – and they can spot an out-there business valuation very quickly.
They’ll also get a sense if your business origin story has been fabricated to make it more appealing or marketable than it really is.
Definitely share your enthusiasm. Paint a picture of your vision for the future, and explain the steps you intend to take to get there.
But be honest. Even if you did secure an investment, you’re entering into a partnership with your investor that might need to last for some time, and could make or break your business – so you want that partnership to be positive, transparent, and productive.
Don’t go in without hours of research, and don’t pitch to any investor who’ll (vaguely) listen.
You need to know your product, your business, your market.
And you also need to know your investor.
Who are they? What does their portfolio look like? What kind of businesses have they had success with – and what are their personal interests? What’s their professional background? Do they already invest in one of your direct competitors?
They’ll know if you’ve done your research. They’ll know if you’ve chosen to pitch to them because you really want them to be a part of your F&B business – or if you’re pitching to them just because you know they have a lot of money.
It’s not all about the money. An investor can be a mentor, a business strategist, a key person to build out your network, and an important advisor. Always look for investors who can add more value to your company than the dollars they can wire to you; and aim to build a long-term, mutually beneficial relationship with them.
Thanks for reading our brief journey through business reality TV – and let us know if you catch an episode of Dragons’ Den any time soon.
Catch you next week!
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