You only get a few chances in life to pick the brain of an investing legend.
But we recently sat down with Kevin O’Leary, a startup investing expert and the toughest voice on Shark Tank.
Kevin took time for our readers to explain the precise formula he uses to decide which startups to fund and which to avoid.
In fact, he used this simple formula when he invested in what could be the breakout startup of 2020.
I waited a week for this opportunity to talk to Kevin.
If you love startup investing, there’s no one better to talk to than Mr. Wonderful.
And there might not be a better time to get started with Angel investing.
Even though so many things are happening in the world today, innovative entrepreneurs like the one Kevin just founded are solving complex problems, riding new trends in the economy, and – best of all – are preparing to make their investors a lot of money if their idea reaches mass adoption.
The work-at-home movement has given the new startup that we funded before Kevin a chance to quickly capture a big swath of a multi-billion-dollar emerging market. And today – you have the chance to hear Kevin talk about the company, meet the founder, and invest right alongside Mr. Wonderful.
Is there a better way to get your week started?
A winning formula.
Whether you’re NBA coaching legend Phil Jackson or a a financial advisor with hundreds of millions of dollars in assets – success comes from finding a simple strategy and sticking to it.
The same goes with startup investing.
I’ll be honest. I am pitched hundreds of ideas a year, and it can be quite overwhelming when you digest all of the profit margins, the founder stories, the marketing strategies, and more.
In addition, many startups don’t make it due to any number of challenges that investors could have weeded out from Day One.
So, what is the best winning formula for Angel investors?
This week, we got that answer from none-other than Shark Tank co-host and Angel investing legend Kevin O’Leary. In an exclusive interview, Kevin outlines his specific checklist for everything he’s seeking before he writes a check to an entrepreneur.
And I’m recapping this interview today.
Product, Founder, Pitch
Kevin likes to keep it simple. So, when he’s diving into a new startup – like the one you can fund right alongside him – Kevin focuses on three important factors.
And every startup MUST check all three boxes.
First, he looks at the product and asks a question: What problem does this idea solve?
By solving a problem, the product can give us a better understanding of the market.
Kevin quickly deducts the size of the market, the potential customers, and the importance of the product simply by understanding the problem it solves and the value it offers.
So – for example, think quickly about the massive “work from home” trend that has taken shape across the globe. No longer will companies need massive conference rooms and huge whiteboards. Instead, they’ll need a specific type of product that is agile, smaller, and can be used in smaller offices. This radical shift has created a radical opportunity.
The Face Behind the Product
A great idea is just as valuable as the paper it’s printed on.
That’s why Kevin looks deep into the experience and background of the founder.
Afterall, the entrepreneur is the company’s first salesperson. And either the entrepreneur has the sales and hussle gene, or they don’t.
The tenacity that Kevin likes in an entrepreneur isn’t something that he believes that cannot be taught in schools.
Kevin doesn’t want to have to teach an entrepreneur on the fly. He wants to be able to provide guidance, give them greater exposure, and go out and win their market.
He also wants them to understand how to drive better margins and greater sales.
For more on the business models he likes to target, you can watch Kevin right here.
Nailing the Pitch
Finally, Kevin notes that the Pitch must be perfect.
When entrepreneurs walk onto the set of Shark Tank, there is not music playing overhead. There is no introduction. The doors open to silence, the founder steps forward, and they must nail every element of their presentation (all of the sounds, music, and narrative are added during the production of the show).
For Kevin, the first 90 seconds are critical for every pitch.
The entrepreneur has that long to explain the product and the problem it solves.
“You have to create great television, tell your story, be compelling, explain the product…” Kevin says. “People think they can rehearse 100 times in front of a mirror and experience what it’s like to go under those lights with the 26 cameras and the Sharks in front of them. No, you can’t…You either nail it or totally screw it up.”
But it’s not over if the 90-second pitch goes great.
From there, the numbers matter. Kevin is notorious for quizzing founders about their financial figures. He wants to understand their margin, their cash flow, their burn rate, and their valuation.
It isn’t easy. So, when a founder like this one impressed Kevin on the problem, product, and pitch, he secured a massive deal with the shark.
The Other Secrets of Kevin O’Leary
Of course, the product, the founder, and the pitch are just the beginning of an Angel Investor’s journey. In our conversation, Kevin also discussed the importance of execution skills, the importance of pivoting as a startup, and the value of honesty and integrity.
It was a long conversation with Kevin, and perhaps the most valuable one that we’ve had.
To save our readers time and to highlight the MOST IMPORTANT insights, we’ve condensed the interview into a 10-minute segment. This is a rare opportunity to hear Kevin share his secrets to Angel investing and offer access to a company that he recently funded.
There’s still time for you to invest. But this might be one of the last opportunities for our readers to hear from Kevin on this investment. So, don’t let this opportunity slip away.