{"id":47615,"date":"2023-10-20T15:54:21","date_gmt":"2023-10-20T15:54:21","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/canberra-entrepreneur-scores-600000-on-shark-tank-three-things-he-learnt-from-swimming-with-the-sharks-startupsmart\/"},"modified":"2023-10-20T15:54:21","modified_gmt":"2023-10-20T15:54:21","slug":"canberra-entrepreneur-scores-600000-on-shark-tank-three-things-he-learnt-from-swimming-with-the-sharks-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/canberra-entrepreneur-scores-600000-on-shark-tank-three-things-he-learnt-from-swimming-with-the-sharks-startupsmart\/","title":{"rendered":"Canberra entrepreneur scores $600,000 on Shark Tank: Three things he learnt from swimming with the sharks – StartupSmart"},"content":{"rendered":"
\"Shark<\/div>\n

A Canberra entrepreneur has scored the first investment on the new season of Shark Tank<\/em>, netting $600,000 from three of the esteemed judges.<\/p>\n

On the Go founder Mick Spencer was the first contestant to appear on the latest season of the entrepreneurial reality show, and eventually convinced three sharks – Janine Allis, Steve Baxter and Andrew Banks – to back his tech sportswear business in exchange for 30% equity.<\/p>\n

On the Go is a purpose-driven clothing manufacturer delivering custom-made sportswear with a client portfolio boasting the likes of Iron Man and Fitbit.<\/p>\n

Spencer says the investment serves to close a $1 million seed round in his startup, and that he\u2019s on a mission to empower disadvantaged youths around the world through healthier lifestyle.<\/p>\n

The founder entered the tank pitching for $300,000 in return for 10% equity in the company, with the three judges all offering the full amount of money for twice the equity.<\/p>\n

After consulting his CFO James Palmer, Spencer made a reviewed offer of $600,000 between the three sharks in exchange for 10% equity each which they eventually agreed on.<\/p>\n

The sharks\u2019 investment in On the Go is one of the biggest ever made on the show, and Spencer says he learnt three key things throughout the intense process.<\/p>\n

Negotiating is key<\/h3>\n

Spencer says he jumped into the tank with a very clear idea of how much backing he needed, what he needed it for and how much of the company he was willing to give up.<\/p>\n

\u201cI went in there with confidence,\u201d he says.<\/p>\n

\u201cMy first priority was to come in and get investment.\u201d<\/p>\n

Spencer says he never planned to give away more than 30% of the company, and stayed firm even when Allis counter-offered for 35%.<\/p>\n

The sharks then dropped the stake to 33% before finally giving in at 30%.<\/p>\n

\u201cGoing in there with an outcome and a plan really helped,\u201d Spencer says.<\/p>\n

This ensured a deal was made on his terms.<\/p>\n

But his knack for negotiation has come through some rigorous learning thrown at him during On the Go\u2019s early days.<\/p>\n

\u201cI started with $150 four years ago,\u201d he says.<\/p>\n

\u201cI built a lot of confidence on who to trust, I\u2019ve been burned a lot and lost a lot of money.\u201d<\/p>\n

Get the numbers right<\/h3>\n

In preparation for Shark Tank<\/em>, Spencer approached some of his existing investors to see what type of questions they may ask.<\/p>\n

After noting all of these down, he made sure he had answers for each one.<\/p>\n

Having a strong understanding of his equity and cash flow helped him respond well on how his business actually stacks up proved to be most important.<\/p>\n

During the show, Spencer revealed the company turned over $1.6 million last year with a cost of goods gross margin of 58%, which in addition to other costs put them at a small loss.<\/p>\n

However, with current client negotiations underway, he assured the judges that On the Go would reach profitability by the end of this year.<\/p>\n

Reviewing the figures Allis noted that the company though valued at $3 million would make just over $250,000 in profit.<\/p>\n

But with Spencer\u2019s planned growth trajectory and ambitious longer-term goals, he was able to demonstrate that On the Go\u2019s infrastructure was built to last.<\/p>\n

\u201cIt\u2019s all about scale now,\u201d he says.<\/p>\n

\u201cWe spent the first four years building a really great business and building a foundation that\u2019s really set up to grow.\u201d<\/p>\n

Preparations need to start early<\/h3>\n

When growing a business, Spencer says it\u2019s crucial that founders optimize their time by dedicating efforts to things that actually drive it forward.<\/p>\n

At the start, Spencer says he did everything from coding the website to building the invoice.<\/p>\n

\u201cThen as you grow it\u2019s important to make note of where the founder\u2019s position needs to be,\u201d he says.<\/p>\n

With this in mind, Spencer began putting in place the right team and efficiencies to set his venture up for acceleration.<\/p>\n

RedBalloon founder and Shark Tank judge Naomi Simson commended Spencer for researching and investing time early on to establish On the Go\u2019s infrastructure in this way.<\/p>\n

\u201cAt every level he is using systems to look \u2013 and be professional,\u201d she wrote on LinkedIn.<\/p>\n

She says other founders should do the same by reviewing how they spend their time and determining which tasks can be streamlined through systems like QuickBooks Online.<\/p>\n

\u201cIs there a system or process that could help you do more of the things you loathe?\u201d she says.<\/p>\n

Looking back, Spencer says there is one thing he should\u2019ve done during On the Go\u2019s earliest days: get mentors on board.<\/p>\n

\u201cThere would have been a lot more opportunity for growth in reaching out to smarter people earlier on,\u201d he says.<\/p>\n

Follow StartupSmart on<\/em> Facebook,<\/em> Twitter,<\/em>LinkedIn <\/em>and <\/em>SoundCloud.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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