I sit in the lucky seat as an investor/Shark on ABC’s Shark Tank, and all the entrepreneurs I meet on set have enough pizzazz to get them on the show in the first place. But that’s just a good start … and it’s no guarantee that they’ll build a good business.
After listening to hundreds of entrepreneurs pitch their businesses over the last six years, I have developed a thorough system to help me pick the winners, the people most apt to make me a lot of money.
Just like all other angel investors who have a set criterion in choosing wise investments, here are the traits I’m looking for that win my confidence and charm my money out of my pocket.
Gumption comes across as a mixture of wild enthusiasm and street smarts. I’ve never met a successful entrepreneur without gumption. Every successful entrepreneur I’ve worked with is great at taking a hit and getting right back up. They're missing the gene that allows them to feel sorry for themselves. On Shark Tank, I can spot the winning entrepreneurs because they answer challenges and objections with rock-solid comebacks. Their quick and convincing answers prove they know their stuff and demonstrate that indispensable trait of bouncing back.
2. A Great Work Ethic
I work extremely hard in every business I invest in, and I need to be convinced that my new partner will work just as hard. I size this up by asking lots of questions about their past jobs and endeavors and how much time they really dedicate to their fledgling business. I find workers are workers and skaters are skaters, and I don’t want to get stuck with a skater.
3. A Team Player
My mother had 10 kids, and, as part of a large family, I always think of my businesses and investments as extensions of my work family. Even when I had my real estate business, nothing gave me more pleasure than playing mother hen to my hundreds of adoring employees, and it’s second nature for me to surround myself with the kinds of good people who make for a good family. I’m pretty good at trusting my gut when choosing whom to invest in. The business version of a good family member is called a team player, and I won't buy into someone who wouldn’t become a good teammate. When I have immediate chemistry with an entrepreneur, I can almost always be sure they’ll be a smart investment.
4. An Idea That Makes Sense
Lastly, the business concept has to be a “reasonable” idea. There are thousands of new ideas out there—good, bad and crazy—and I’ve certainly seen my fair share of them all. But the difference between a cool idea and one that can actually make you money is simple: The idea makes sense. The business can either be a totally new invention that lots of people are happy to pay for, or it can just be a better way of doing something that’s been done a hundred times before. My successful partners Jim and Sabin at Cousins Maine Lobster invented the lobster food truck, but Heath and Brett of Pork Barrel BBQ sauce made a new BBQ sauce that was tastier than the hundreds out there competing with them. Both businesses are hugely successful. What never works is the idea that doesn’t make common sense or the idea that can’t be sold to enough people to make real money.
Every smart investor wants to be charmed. Give me an entrepreneur with gumption, a great work ethic, the spirit of a team player and a product that enough people will pay for, and I’ve got a business worth investing in.
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