Pitching a start-up can be nerve wracking, in part because of the anxiety that comes with public speaking and the high stakes art of deal making. Yet according to two "Shark Tank" alumni, it doesn't have to be.
Ryan Fant and Nayeem Hussain are no strangers to that kind of stress. The duo first pitched their idea for smart home technology at Techcrunch's Startup Battlefield, and received $1.6 million in 3 rounds from 13 investors. A week later, they were finalists in the New York University Entrepreneur's Challenge, where they competed for $200,000.
In addition, they successfully tapped crowdfunding platform Indiegogo, snagging more than $40,000, then topped that by landing one of the largest valuations in "Shark Tank" history. While some of the other sharks hesitated, Robert Herjavec went all in to close a deal of $750,000 for 13 percent equity. To date, Keen Home has raised $4.1 million from various sources.
Keen Home founder Nayeem Hussain told CNBC that the key to a successful pitch is preparation and practice. Before asking for funds, he said, it's important to know where the resources will be allocated.
"Infusing money and capital into a company really should help it scale as rapidly as possible," the Keen Home CEO told CNBC. The executive suggested that entrepreneurs be aware of the amount of capital needed to run the business.
"If you don't know how much money you need, then I would question your ability to run a business," he said.
Still, a business plan is not enough, the entrepreneurs contend: Knowledge is just as important. Hussain said that business owners should know the answers to "the small and larger aspects" of the company. If not, "your hesitation can be perceived as lack of confidence, and at worst [a] lack of knowledge," he told CNBC.
The "first two to three minutes of your pitch [investors] are very critical and watchful," he continued.
To execute a flawless presentation, Ryan Fant, Keen Home's other co-founder and COO, suggested that presenting to real people is essential to delivering a good pitch. He said one of the benefits of role playing is feedback, a tool that can help propel one's pitch. You should tell your story to "mentors, investors; whittle down even further" as you go along, he added. A successful business pitch takes "a lot of refinement and practice," he said.
One of the early lessons the founders learned is the importance of sharing an idea. "Validate your idea by speaking to intelligent investors and potential clients," Hussain said. "Go out there and talk to people."
While some may consider pitching a business an arduous process, the greatest challenge might not be in the tank or at a boardroom. Hussain considers that once an idea is disruptive, challenges and/or solves a problem, your very own mind becomes a battlefield.
Entrepreneurs need to learn how to keep their conviction, he said, adding that the next step is to "get others very excited about what you're doing. "Absolutely do not go into that tank without conviction and education," he said.
On the flip-side, "once you're up there, be genuine and be yourself; you can tell your story," Fant said, adding that the key is having fun, being prepared and being yourself. "Figure out how to be memorable," he said.
Not making the cut for Shark Tank or that investor not biting the bullet isn't the end of the world, the founders said. Crowdfunding and applying for grants are possible alternatives to pitching.
The goal "from the very start is trying to validate that your business has viability," Fant said. "Once you determine that, it's [about] starting to build your company."
Still, many entrepreneurs limit pitching business ideas for fear of their idea getting stolen. Hussain and Fant suggested potential start-ups brush aside the fear that comes with not being the only person with a good idea.
"The chances of someone having a similar idea are high, but the chances of someone executing is fairly low," Hussain said. "An idea is only an idea until someone could execute it."
Fant added that "having the idea and even having a team to execute is only half of the battle. It's more than having an idea, you have to live it," he said. "It has to be the only thing you're doing right now."
Correction: This story was revised to correct the spelling of Nayeem Hussain's last name in one reference.