Koen sells chefs cases made of 100% natural leather, managed to raise MXN 2.5 million in exchange for 50% of its shares; MíTu, a Mexican brand of artisan shoes, obtained MXN 1.5 million, for 40%; Chez vous, a mix of coffee shop and workplace obtained MXN 3.5 million for 50%; and Conta Listo, an app that manages tax payments, raised MXN 2 million for 30%
What these ventures have in common is that their investors are the well-known “sharks” from Shark Tank Mexico, a reality show that debuted in the country in 2016 and began its sixth season last July 16. The format began in the United States in 2009, based on the Japanese show Tigers Money.
The four mentioned cases attracted some of the main Mexican businessmen and businesswomen, such as Arturo Elias Ayub, Rodrigo Herrera, Marcus Dantus, Carlos Bremer, and Patricia Armendariz, as investors.
They are known as “sharks” because they tend to be relentless to entrepreneurs, who must seek to defend their business plans and convince investors to bet on them. In addition to financial resources, entrepreneurs offer them advice and follow-up.
“In one in which I invested, which are in Baja California, I have taken four trips, and they took two to Mexico City. We see a huge business. We are putting much more ideas and time [on it]”, says Braulio Arsuaga, CEO of Grupo Presidente, operator of hotels and restaurants in Mexico and president of the National Tourism Business Council (CNET, in the acronym in Spanish), who participates as a“ shark ”in five episodes of the show’s sixth season.
For the businessman, Shark Tank, more than an entertainment program, is a project that encourages entrepreneurs. “You are giving your time and money to try to take them to another level.”
Participants have the opportunity to give greater visibility to their projects and secure funds for them. The exercise that entrepreneurs do to convince the show’s investors is similar to what they faced when in front of an investment fund.
In this new season, in addition to the already well-known entrepreneurs that make up the show’s mainstream, invited “sharks” also participate, such as Arsuaga and Deborah Dana, founder and CEO of CanastaRosa.com, a digital platform for buying and selling local and handmade products.
They’ve shared some of their views on how entrepreneurs can present their business idea and take their projects to another level with LABS.
Verónica García de León – What do entrepreneurs who manage to capture the attention of investors have in common?
Braulio Arsuaga – The knowledge of their product, the depth that their product or service may have in the future in the market, the empathy and chemistry that they achieve, the desire to listen, the will to make the changes that you propose, [and the fact] that they take criticism as constructive.
VGL – How should the business idea be presented to convince you?
BA – You have to know your product and service more than anyone else. You can tell the difference between people who have studied their product and people who really know about it. You have to live the product or the service, eat, have breakfast and dinner with it, and not learn “a script.”
VGL – As an investor, what part of the business do you look at the most?
BA – In the depth that the product and service may have in the future. If you see that it is a small market, you think, “for what?”. Today, it is a topic of relevance that makes you feel that you want to be a part of it.
VGL – As an entrepreneur, what is the key to receiving feedback from someone interested in helping you?
BA – Humility; you have to listen to strong and constructive criticism, assimilate it without debating or defending yourself.
Verónica García de León – What should entrepreneurs who expose their business to investors like Shark Tank work on?
Deborah Dana – You have to prepare more; you have to give 100% because it is a moment that you want to culminate in an investment. So my recommendation is to read a lot; I follow blogs, I love talking with funds and investors because they come up with ventures.
I love Andreessen Horowitz‘s [blog], A16z; it’s the one I recommend the most.
DD – 1) The team and why it is the best one for that project. 2) They have to have their financial model clear: how their company will do business or what their goal is, and how they are going to get there. 3) How they will achieve sales, the whole vision of MKT and sales because there are very good ideas, but they have to concentrate on sales.
VGL – What do the best pitches have in common?
DD – It is seen that they practiced them to death; they know their numbers, the size of their market, their competitors. When there is an entrepreneur with all the energy, that’s where you can capture interest.
I play them as a detective when their initial pitch is weak because sometimes, even though it is not so attractive, there are great opportunities [to be explored].
VGL – What would you recommend to entrepreneurs after what you saw on Shark Tank?
DD – I would challenge them to think bigger and have more aggressive goals; sometimes, setting the goal helps to go for it.
Translated by Fabiane Ziolla Menezes