Kevin O'Leary (Canadian entrepreneur, investor, journalist, writer and finance specialist), who participates in Shark Tank, talks about what he looks for in a startup and the points to cover when seeking capital.
When we talk about Shark Tank, a reality show that takes place in the United States in which several entrepreneurs present their projects in front of a group of investors, not only the word entertainment comes to mind, but also new opportunities for business starters.
Kevin O'Leary, one of the founders of the show, journalist, entrepreneur and investor in several businesses around the world, spoke on INCmty about what it takes to get an investment.
“Before investing in a startup I look at three things: the market they are going to bet on, that it is a startup that has new ideas and that it is a product or service in which the profits are high and the investment is low,” says O'Leary.
With more than 25 years investing in various startups, this investor has known how to bet on projects with a global vision, because in this way entrepreneurs enter highly competitive markets and can create strategies that will lead them to success.
As the owner and founder of several companies such as O'Leary Funds, he has been researching for several years what it takes for an investor to bet on your project. His and his colleagues watched videos of the Dragon's Den and Shark Tank shows and found that 100% of the deals financed had a pitch that met 3 essential points:
“In many cases it was less than 60 seconds,” O'Leary says. Elevator Pitch: How to sell an idea in 60 seconds: “It has been proven, in 60 seconds people have already formed an idea of who the person is, from their first words, through their body language to persuasion, in 60 seconds you know if you liked the person or not, if you are empathetic with them or not. him or whether you like his idea or not”, comments José Antonio Quesada, president of the IMEF Advisory Council and Client and Market Leader at PwC. This is what “theevator pitch”
“Making a business plan is like a courtship. A business plan must be able to tell me if the business is viable or not, and not risk my assets and that of my partners in a business investment,” says Horacio Mendoza, director of the Marketing and Human Development Consulting Firm Mendoza, Córdova y Asociados.
Many times they have a great idea and execute the plan perfectly, but they don't understand it on a numerical basis. If they are not good with numbers they should bring someone who is. According to O'Leary, this is when most projects fail.
“I have always said that new businesses fail for two reasons: poor management and when they don't know how to take care of money. “Entrepreneurs must understand that capital is like the blood of the business and that if it is not taken care of, every last cent can be lost,” says O'Leary.
According to O'Leary, usually 20% of new businesses fail, but after his participation in television shows (Dragon's Den and Shark Tank) he realized something very interesting. In the last 6 years, the success rate of new businesses has been 36%.
What they discovered was that these types of businesses received free advertising all year round from the programs, since people knew about them during the competition. “We realized that if you can give free publicity, the success rate will be higher, it's something that everyone would like to have,” adds O'Leary.
