Over 13 years of creating deals on ABC’s “Shark Tank,” Kevin O’Leary says he’s noticed a typical thread amongst the businesses which have brought him the perfect investment returns.
They’re mostly owned or run by women.
“That is real data: 75% of my returns have come from firms run by women,” O’Leary tells CNBC Make It. The trend runs across every industry and business sector, he adds — not only those traditionally viewed as women-friendly.
After greater than three many years in total as an investor, O’Leary says there isn’t any secret formula to predict which investments will reap huge returns, and which of them will disappoint. He notes that on “Shark Tank,” every investor has “had catastrophic losers — I mean, where we lose tens of millions — and we have had euphoric monster hits.”
Still, O’Leary says he’s had “more hits than losers” — and sorting through his hits reveals the common theme of women-led firms.
Certainly one of his best known “Shark Tank” deals, for instance, is his $75,000 investment in Boston-based baked goods company Wicked Good Cupcakes. On the time of the 2013 episode’s taping, the corporate had $150,000 in total sales. That number grew to $10 million inside three years, in accordance with an on-air update in 2016.
Other successful deals include O’Leary’s investments in cat DNA testing company Basepaws, run by founder and CEO Anna Skaya, and a photo-printing app subscription service called Groovebook — run by Julie and Brian Whiteman, a husband-and-wife team.
Groovebook specifically goes down as one among O’Leary’s best-ever “Shark Tank” investments, the investor told CNBC Make It in 2018: Lower than a yr after O’Leary invested $75,000 into the corporate, it sold to Shutterfly for $14.5 million.
“I don’t need to begin gender warfare,” O’Leary says, adding that he cares mostly about who can get him the largest return on his investment. “I’d give my money to a goat if I believe it could possibly get a return.”
Still, he offers up a couple of thoughts on why women-led firms have been his most successful investments thus far:
Why women may be higher startup founders: Less ‘testosterone bravado’
Women founders often have a harder time raising money to fund their businesses than men do. Female founders received only about 2% of total enterprise capital money allotted in 2021, in accordance with Pitchbook.
But O’Leary says female entrepreneurs — especially those with kids — are inclined to be higher listeners, a crucial quality for serving customers and managing employees. He also says women founders typically set more realistic financial goals for his or her firms, in comparison with their male counterparts.
“What I’ve found was that [women] would set sales targets 30% lower than comparable sales targets from firms run by men,” O’Leary says. “I call that testosterone bravado.”
Male founders he’s worked with set higher sales targets, but only hit those targets 65% of the time, whereas women founders typically hit their more realistic targets 95% of the time, O’Leary says. Failing to satisfy those targets — even in the event that they were unrealistic to start with — can frustrate investors and employees alike, threatening to kill a young company’s momentum.
Founders who’re moms should be great at multi-tasking, O’Leary says. They’re also thoughtful about how they use their employees’ time, which may create goodwill that helps ensure low turnover, he adds.
Studies do show that moms are typically forced to multitask more than fathers, with one 2013 study within the BMC Psychology journal finding that ladies are literally higher on the skill than men. Similarly, a 2019 survey of 57,483 staff from HR platform Peakon found that employees at women-led firms were more more likely to be engaged and passionate about their work.
“Once you return and have a look at staff turnover, that they had none,” O’Leary says of a few of his woman-led investments. “They create this really sticky environment where your head of accounting, or your head of logistics or compliance … they do not leave.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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