The new ABC reality show “Shark Tank” has seen everything from flatulence control underwear to fashion face masks to hi-tech sports bras – and a whole slew of great food ideas.  Many passionate food entrepreneurs have braved dipping into the shark tank, and versus their competition (i.e., non-food related entrepreneurs), they are performing shockingly well.  Let’s look a bit closer.

The basic premise of the show is this - each entrepreneur is given a few minutes before 5 potential investors (venture capitalists, or “VC’s”) to pitch their business idea, offer a % equity stake in their business in exchange for capital (i.e., cash as investment):

Of the 30 ideas aired over 6 episodes, a total of 12 ideas, or 40% were funded.  Of these, 5 were food-related, and 7 were non-food business ideas.  Here are some interesting facts:

• 71% of food-related business ideas were funded (5 of 7) vs. only 30% of non-food related business (7 of 23).
• Food-related businesses were seeking less capital than non-food: average of $217K vs. $278K.
• Food-related business actually secured more capital than non-food: average $239K vs. 194K

Shark Tank Businesses Ideas

How did these food entrepreneurs do it, let alone seemingly even better than their non-food competitors?  Here are some of the top takeaways from the first 6 episodes:

1. Have a track record – be able to demonstrate a proven interest through sales or commitments to buy your product.  Someone, that is, other than yourself! This was the absolute first and foremost question asked by investors to every single entrepreneur and small business owner. Without this, you only have an idea, not a business.
2. Have skin in the game – prove that you have heavily invested yourself, your time, and your money in your businesses.  Have you really used every means to capital available to you, and if not, why not? Every entrepreneur has taken on some amount of risk in the initial launch of their business – you’ll have to convince investors that the chance of it’s success, however, is worth it.
3. Convince them as consumers first - Perhaps the first and easiest step – entice them as consumers first, and investors second.   Bring product samples!  Wow them is with your product - even a ‘shark’ can appreciate some good eats
4. Idea or Execution?  Execution. –  Even a brilliant idea will go no where if not executed properly.  Every idea needs the nurturing of both wise business guidance and capital to grow.  Be able to show that you have the basics of business knowledge to deliver results going forward.
5. Something’s got to give – Cash or control, you’re going to have to compromise.   More of one means less of the other.  For equity, be very aware that the difference between 50% and 51% ownership is more than 1%.

All the entrepreneurs who were funded had a unique business situation  of financial need, and was able to come to a unique term of agreement with an investor (or two).  Our very own Susan Knapp of A Perfect Pear, maker of gourmet condiments from Napa Valley, CA, was on the show and won over the sharks!  Since then, she has been featured on Home Shopping Network and sales have skyrocketed – 10x  (as updated in Episode 7)!  See her online after-interview here:
http://www.aperfectpear.com/sharktank.html

Most every entrepreneur will come to a time and place when his/her business will need funding – just know that if yours is a food-related one, your chances of success may very well be in your favor!