According to Barbara Corcoran: One Thing that Turns Investors Off Immediately

  • August 4th, 2014
  • Ty Kiisel

Know-it-all answers don't sit well with Corcoran and other angel investors

A week or so ago J.D. Harrison of the Washington Post published some insight from Barbara Corcoran of ABC’s “Shark Tank” that every entrepreneur looking for funding should know. In fact she said, “It makes me want to leave the room.”

She calls it “fancy talk.” In other words, entrepreneurs who know the lingo, know how to talk the talk, and feel like they have everything figured out are a big turn-off for Corcoron. In fact, she really doesn’t like entrepreneurs who throw around words nobody understands to look like they know what they’re doing. “I keep meaning to go home and look them up so next season I know what they’re talking about—but I don’t,” she says.

While testifying at the Senate Small Business & Entrepreneurship Committee she said most entrepreneurs come on the set acting like they have it all figured out. A big no-no if you want Corcoran to pay attention to your presentation. She argues nothing happens in the real world the same way they think it will when they’re building their company.

It’s OK to acknowledge that you don’t have all the answers figured out. Most investors will expect that. Far better to say, here’s what we do  know, but here’s what we’re trying to figure out. In many cases, the investors you are talking to will likely be able to help you fill in the blanks with their expertise. That’s not to say an investor is willing to put their money into a half-baked idea, but most investors put their money into industries where they have some expertise—particularly if you’re looking for angels like the Sharks.

I was once talking to Lendio CEO Brock Blake about this. His comments fit pretty well with what Corcoran had to say—but from the other side of the equation. He suggested that early in his career he felt like the only thing he wanted to talk to his investors and the board of directors about were all the good things going on. Now, he takes his challenges to the board to get their perspective on potential solutions and to keep them in the loop. He feels like it makes it much easier to work with the group because they appreciate the transparency.

My Dad used to say, “It’s pretty easy to tell when someone is blowing smoke up your skirt.” Put another way, most people can tell when you don’t really know what you’re talking about.

About the Author

  • Ty Kiisel

Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.

Comments

  1. I am an inventor with 7 patents and 15 new ideas. for years i applied to Shark tank to allow me to go before those investors with my inventions and new ideas but my request was ignored. in April 2014 i was in Seattle before some representatives of Shark tank and I told to some of them that i have many ideas and I wish to go before Shark tank investors. they said to me “nobody in the whole world has more than one idea, even Bill Gates has one idea” they indicated to choose one of my idea and I did and I was registered for show but I was never called. In June 2014 I had a great idea, a new kind of power saw used for wood work. I applied for patents and I applied also to Shark tank for admission but I was not called so far. I also submitted my saw to 4 companies. The Shark tank casting team may do me a favor to go directly to manufacturers and to get all I can and not just half as I may get with investors. Even so i have 7 patents and 15 great ideas and I would like to appear before Shark tank investors.
    David Muresan

  2. Reading Barbara Corcoran’s views on turn-off Jargon is inspiring. I always learned that if you don’t know about something admit it, tell what you do know and always seek more knowledge. I do not pretend to know it all. I am grateful to learn something new every day.
    For the last 6 months I have been working to correct my credit score to qualify for a start up business loan to open Mail Express & More, LLC a “pack and shipping store”. In the interim I have managed to get Notary Public Certified and Signature Agent Certified. In addition I am now working to get equipment for Live Scan Fingerprinting and meeting those requirements for services with Florida Department of Law Enforcement (FDLE), Florida Agency for Healthcare Administration (AHCA) and American Association of Airport Executives (AAAE). These are among several services Mail Express & More will provide. They are services that can be mobile, until open a loan is approved and the store actually opens.

  3. As a “Corner Office Curmudgeon” who has been a six-time successfully-exited entrepreneur as well as being affiliated with several VC funds directly, I absolutely agree.

    More than once I have literally stood up and walked out on a smarter-than-thou client or entrepreneur “wannabe.” If he/she/they have all the answers, they don’t need me and I’m not wasting my time. In fact, the best thing I can do for them is to provide that reality check so they won’t make the same mistake next time around.

    This empty bravado is also a huge problem with the “Challenger Sale” approach to sales training that appears to be so popular recently. A lot of young pups in particular who don’t want to put in the hard work to actually KNOW what they’re talking about (or don’t even realize it takes hard work) string together a bunch of jargon, empty marketing word and a few acronyms before deciding to FURTHER insult me by pretending (or thinking) they have more insight into MY business than I do.

    Newbies, don’t confuse honest earned confidence with schoolyard posturing.

  4. About $2 million plus a lot of sweat equity have been invested in our 4-person firm. Our new process for pulp mills has competition funded by governments here and abroad. If we can operate at scale promise is half the capex, half the opex and more safety. Market projections are $100+ billion/year. To demonstrate we need $10 million over 2 years to build and operate a 20,000 ton/yr production unit. Interested?