So I'm back in Victoria for Christmas vacation, and I'm watching the CBC again, and I come across the show "
Dragon's Den." I absolutely fall in love with the show. The concept is, you have entrepreneurs going on Dragon's Den, pitching their ideas to five venture capitalists for funding. I'm encouraged by this show because when I took entrepreneurship in business school, the main source of funding they recommended was through government grants and agencies. I hope a show like this helps foster a culture of angel investors and venture capitalists in Canada.
It's pretty valuable to watch people pitch their ideas to a room full of very skeptical investors. On the flip side, if you've got money to invest, it's pretty valuable to develop a healthy sense of skepticism and ask the right questions when presented with an investment opportunity. These investors are even more brutal than Donald Trump, and it's strangely refreshing.
I really like how you get to see both sides of a business deal from the perspective of the business owner and the investor.
For the business owner:
- How much control of my company am I willing to give over to investors?
- Is the valuation of my company fair?
- What expertise do I lack?
- What expertise do I want from potential investors and partners?
- What's the exit plan for investors?
For the investor:
- What's the risk/reward of this investment?
- How much money does the business owner have on the line?
- Does the owner have good knowledge of the market and competitors?
- How long until I get a return on my investment?
- How much of my time do they need and what are my roles and responsibilities?
- Is the business model realistic or too good to be true?
- What are the strengths and weaknesses of this business?
Here's an example of a pitch where the entrepreneurs have a business plan, but clearly didn't do their homework on their idea, and don't understand the market that they're getting into. In this video, the owners are pitching a
digital wall calendar.
This other clip is a great business pitch, but the entrepreneurs are too innocent and naive. It's a family business pitching
Cosy Soles.The venture capitalists tell them if they weren't on the show, they would destroy them by taking advantage of them. Take away is, beware of investors bearing gifts and understand your financing options.
I'm finding this show very useful because I'm starting to be approached with investment opportunities, and this helps sharpen my business sense. I'm also in a position to pitch investment ideas as well (both personal and work), so learning how to present well is key to success.
Awesome show. There's plenty of clips of this show floating around on YouTube. I heard in the U.S., there's an equivalent show called
Shark Tank, where two of the venture capitalists from the Canadian show appears on.
