How well can you pitch? Mick Spencer enters the Shark Tank
By Nic Crowther, The Shaker
Those who know Canberra’s Mick Spencer knows two things: Mick is furiously ambitious, and he can milk a Richard Branson reference like few others.
It’s a combination of his personal drive and the inspiration of his Virgin idol that saw Mick enter the Shark Tank – a Channel Ten reality programme that puts budding entrepreneurs up in front of some of the heavy hitters of Australia’s business world
So how did Mick Spencer, the chronically short-sighted sportswear producer with a classic started-from-the-shed back story, perform in front of the likes of Andrew Banks (Global investor) and Janine Allis (Brand and Business Innovator)?
Pretty well, as it turns out.
Mick tells his story
As this episode of Shark Tank begins, viewers are quickly introduced to Mick in his office. The voice-over mentions that Spencer idolises Richard Branson (tick!) and, just in case we missed it, there’s a photo of Dicky B on the wall (tick, tick!).
Moving quickly, we look in on a scene from the On-the-Go’s team meeting. Mick is rallying the refreshed troops after the Christmas break, encouraging them with the words, “Now we get straight back in.”
The set-up continues and we are introduced to Mick’s parents. Filled with care for their boy, Mr & Mrs Spencer briefly discuss the issues around his eyesight, and Mick then uses this fact to frame his drive and ambition to ‘build his own life.’
So far so good!
Accompanied by suitably dramatic strings, Mick walks into the studio sporting his own On-the-Go t-shirt. As with all those who enter the Shark Tank, we see the price before the product and, on this occasion, the he wants $300,000 for 10% of his business.
Cleverly, Mick starts the pitch by setting out the original market failure that led him to creating the business for on-demand sportswear, as well as hinting the next challenge for growing On-the-Go. Spencer also knows the total value of the industry ($200 billion) and indicates that his business solution has global appeal.
The ‘Sharks’ are interested. But can they smell blood?
Swimming into murky waters
It’s a great start when Mick tells the panel that there are over 3,000 organisations using On-the-Go. He mentions Go-Pro, Anytime Fitness and, you guessed it, Richard Branson (tick, tick tick!). At this point, Andrew Banks looks impressed and nods.
There’s a great piece of honesty (crucial when dealing with potential investors) when Mick explains that last year ran at a loss, but informs the sharks that this was because of a large R&D investment. That’s not a problem, because he wants a $100 million company “by 2025.”
Andrew Banks is definitely on the hook. Impressed by Mick’s success at a relatively young age, Banks loves Mick’s “big, hairy audacious goals.” All of a sudden, the other sharks look a little uneasy.
However, Mick overplays his hand when it comes to the opportunities that lie in front of On-the-Go though the discussions he is having with potential buyers and retailers.
Janine Allis latches on to this. “I can only go on history… and not on blue sky.” This is crucial, because Mick has moved too far into trying to sell the potential of the business instead of focussing on where it stands. Telling the sharks he wants ‘a billion dollar company’ only extends this risk – all five of those in front of him are shrewd and sceptical investors.
The sharks begin to circle
Based on the facts at hand, Janine offers “$300,000 for 20%” - twice as much of the company that Mick was willing to sell at that price. Steve Baxter (Tech Start-Up Investor) jumps in at the same price, and Andrew Banks does the same. All of a sudden Mick has three offers.
Glenn Richards (Vet & Entrepreneur) isn’t so keen. He’s worried about an Australian player trying to take on global giants (think: Nike, Lulu Lemon and UnderArmor) and considers Mick’s evaluation to be too high. He’s out.
The final shark, Naomi Simson (Online Marketer), delivers what is perhaps the biggest compliment of the night by telling Mick he is ‘very investable’. Clearly not to her though. Giving the excuse that there are enough sharks in the mix, Naomi’s out as well.
The three interested sharks ae all looking for the same. How much is Mick willing to give up?
Mick excuses himself to speak with his CFO. While outside, the sharks talk among themselves, and seem genuinely impressed by the presentation.
Andrew Banks tries to predict the next stage of the negotiation: “He’s going to try to get us all in for 15%.”
Returning to the studio, Mick indicates On-the-Go sees the value of each of the sharks, and would like them all in for a 15% share at $300,000. Janine Allis feels this level of shareholding is a waste of time. “Five percent??”
Mick is flustered, and goes back to the potential of the business. Meanwhile, Janine has scribbled something on her notepad, and she shows it to Steve and Andrew, he give gentle nods of agreement while Mick works to drive momentum forward from his side of the deal.
Janine hits him with the deal. $600,000 for 35% of the company. The ball is in Mick’s court, and he hits them with 30% for the same shareholding. “I’m really fixed on 10%,” he says.
Banks goes again. “How about 11%?”
It’s at this stage that almost anyone watching Shark Tank at home would have started screaming, “DO THE DEAL!” but Mick isn’t yet done. “Ten per cent each is just a beautiful figure.”
Steve’s in, but Mick needs to get the other two across the line.
Allis is blunt, “It’s overvalued at that price,” but a deal looks inevitable. She convinces Banks to jump in with her, and it looks as though Mick Spencer has pulled it off.
Banks has the final word. “You showed your mettle today. If you run your business like you performed today, We’ll all make a lot of money. Well done.”
Well done indeed. It was a great pitch, and a really strong performance. We could all learn a lot from this gutsy entrepreneur and his ‘big, hairy and audacious goals’.
To read official article click here: http://theshaker.com.au/briefing/how-well-can-you-pitch-mick-spencer-enters-shark-tank#sthash.iaZa0cZI.LDAty7Z6.dpuf