Kevin O’Leary is known for his role as the shrewd investor “Mr. Wonderful” on ABC’s hit series, Shark Tank, where hopeful entrepreneurs pitch their businesses for a chance to secure capital from Kevin and a panel of investors. Now, Kevin is bringing that pitching experience directly to the public.
Kevin O’Leary has joined forces with my FinTech partner StartEngine — the largest equity crowdfunding platform in the U.S. that has raised over $350M for hundreds of startups from thousands of everyday investors. Alongside Hawke Media and several known sponsors, Mr. Wonderful and StartEngine host a new pitch competition open to all founders ready to pitch this shark.
Five finalists will pitch Mr. O’Leary live for a shot to hear what he thinks of their business, and the winner will receive a grant of $25K and over $40K worth of in-kind services from the sponsors. Founders can submit pitch applications at www.startengine.com/shark.
As one of the world’s most exciting investors with a larger-than-life persona to back it up, I talked with Mr. Wonderful about his roots as an entrepreneur and his advice for people trying to start a business.
Let’s start at the beginning. How did you become an entrepreneur? From what I’ve read, it seems like you’ve had it in you from a very young age.
I’ve been driven to be an entrepreneur since I was a teenager. I got fired once from an ice cream parlor job, and I knew then and there that I never wanted to have a boss again. I tried to set my priorities.
Why do you believe it’s essential, to be honest with entrepreneurs about their business plans?
Being an entrepreneur is a long and lonely road. I’ve done it. It consumes your life, and I owe it to entrepreneurs, to be honest with them. If I see a fundamental flaw in a business idea, I will point out that defect before an entrepreneur dedicates years of their life to something that won’t ultimately succeed. I think it’s more respectful to the entrepreneur than giving false praise and guiding them down the wrong path.
Have you ever had a time when one of your business ideas failed, and has it shaped how you interact with other entrepreneurs?
Absolutely. I think failure is a foundational experience for any entrepreneur. If an entrepreneur hasn’t failed, I often won’t invest in them. Experiencing failure is a decisive motivating factor. Many entrepreneurs need to feel the sting of failure; without it, they are naive about how hard it is to build a successful business.
What qualities do you look for in a business when you invest? What investments stand out?
I have seen thousands of startup pitches, and there are three components to a great pitch.
- The founder can describe the business in 90 seconds.
- The founder can prove they are the right one to execute the business model.
- They know their numbers, from their gross margins to the number of competitors on the market. If a pitch has those three things, they get my attention.
How do you decide when to build a new business, and what does a successful plan look like?
I think it’s important to remember the problem you are trying to solve. If your business doesn’t help people by solving a problem for them, whether they know they have a problem or not, you’ve got nothing. Once you know, or believe with conviction, that your business addresses people’s real needs, it’s time to build.
To that point, one of the most important things an entrepreneur should do is start selling and validating your idea. If you can sell your product or service to 1,000 people, and reach a point of sales well after exhausting your list of friends and family, then you know you’re on to something, and it’s just a matter of figuring out how to scale.
How did you get involved with the StartEngine live pitch competition?
I came across StartEngine last year just as we entered a lockdown, and I was immediately drawn to the platform. The idea that startups can raise funding directly from their constituents and customers and bypass venture capital funding entirely is brilliant. I’ve been encouraging the companies in my portfolio to leverage equity crowdfunding, and I became StartEngine’s Strategic Advisor to have more exposure to this space.
Will you be as tough during the live pitch competition as you are on Shark Tank? What can viewers expect?
This pitch competition is a bit different and is closer to a lightning round than what I do on Shark Tank. They edited our conversation for a few minutes on the show, but we had quite a bit of learning about the idea and digging into the business. This pitch competition is just a few minutes per company, so you’ll get my gut reaction to these elevator pitches. StartEngine does a great job of bringing a lot of variety to the competition, so I never know what I will get.
Do you have other advice for entrepreneurs trying to make it out there, especially during this crazy year?
Change brings opportunity, and a lot has changed in the past year. I think today is a great time to start a business, but it is also difficult to raise funding, so entrepreneurs need to be particularly mindful of their runway and what debt they take on if any.
Catch Kevin “Mr. Wonderful” O’Leary on the next installment of StartEngine’s Shark Pitch competition on July 7, 2021, at 9 am PT / 12 pm ET. All founders are welcome to apply to pitch by visiting www.startengine.com/shark.