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.