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I am a fan of CBC's Dragon's Den show. I believe there are similar shows now available in Japan and UK, a US version is in the works. The premise of the show is that an entrepreneur comes in front of four investors to pitch an idea or a business. If the investors like what they see they negotiate their stake in the enterprise and invest the agreed amount.
In preparation for the fourth season CBC organized an information session for the Toronto area prospective show participants in Toronto city hall. Mayor David Miller opened the evening by promoting city's small business services, the show's host Diane Backner and investor (dragon) Robert Herjavec gave brief presentations followed by Q&A. In addition to meeting one of the dragons, my goal, going to the event, was to scale my chances against competition.
Overall the audience members asked the questions that I needed answered and it turned out to be a productive evening. Three main points were made by Mr. Herjavec that stand out in my memory: sell yourself-be prepared and confident (not overconfident), don't turn obnoxious when criticized or asked to answer tough questions, and, of course, be prepared to justify the size of investment you are seeking. Mr Herjovec made a great point when asked if there is a limit on how much money can be requested from the dragons, he said, there are publicly traded companies out there that are trading at 7-8 times their value on the major stock markets, why should he invest in your company if he can make 6-8% interest on his investment with relatively low risk investing in mature enterprises.
So, if you're asking for $500K you better be prepared to answer why you think you need that much money, how you are planning to use it and when can the dragons expect to see return on their investment.
Naturally, the evening did not pass without a lite moment. When Mr. Herjovec was asked if he would be interested to invest a $100 mln in a Google-like idea, he did not hesitate to agree to consider the proposition, but noted he would need help from other dragons.
Good luck with your business start ups!
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