Barbara Corcoran doesn't want to hear your startup pitches outside of ABC's "Shark Tank."
It's not because her friends and strangers on the street have unrealistic business ideas, Corcoran recently told Barstool's "Chicks in the Office" podcast. Rather, it's because only one in every 10 of her "Shark Tank" investments actually earns a profit, she said.
"I've invested in 150 businesses, and I've made money on about 10%," Corcoran said, adding with a laugh: "The minute someone's opening their mouth, I feel like I've got a 90% chance of losing another $100,000 here. Do I really want to listen?"
Because of the high-risk nature of investing, the 74-year-old said she only pulls out her wallet for a select few "Shark Tank" pitches. She's seldom impressed by products and services, but can be wooed by the business owners themselves, she added.
"The No. 1 trait I'm looking for [is] ambition," Corcoran said. "Someone who envisions where they're going, and I fall for it when they tell me they're going there."
She's not the only "Shark Tank" investor who feels that way. Some of Mark Cuban's investment offers on the show are more about helping promising entrepreneurs than making money off the deals, he wrote on Twitter last year.
"I'm good with that with my 'Shark Tank' companies," Cuban wrote. "I don't do the show to get the best investments. And I don't always invest because I think I'll make money. Sometimes my deals are purely to help someone or send a message."
Corcoran has a lower self-estimated success rate than Cuban: One in four of Cuban's deals "have done really well or crushed it," he told hetold a Denver ABC affiliate last year.
Still, Corcoran said her "buy the entrepreneur" strategy works well for startups, which often need to redo their entire business model in their early days.
If her instincts are accurate about the people running the business, the deal will eventually succeed financially, she said. If her instincts are off, and she misses out on investing in someone who goes on to be successful, she doesn't have regrets, she added.
"I'm not the type of person that cries about that kind of stuff," she said. "It's such a waste of time. I'd rather look forward and find somebody else."
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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As an enthusiast and expert in the realm of entrepreneurial ventures and investment strategies, I have closely followed the experiences and insights of seasoned investors such as Barbara Corcoran from ABC's "Shark Tank." The depth of my knowledge extends beyond the surface level, incorporating a nuanced understanding of the dynamics involved in startup pitches and the inherent risks and rewards associated with such investments.
Barbara Corcoran's apprehension towards entertaining startup pitches outside of the "Shark Tank" setting is not merely a personal preference but stems from a statistical reality. With a track record of investing in 150 businesses, she openly acknowledges that only about 10% of these ventures have proven profitable. This admission serves as a testament to the challenging and high-risk nature of the investment landscape, reinforcing the need for a discerning approach.
Corcoran's investment philosophy is intriguing, as she emphasizes the significance of the entrepreneur's character over the inherent value of the product or service being pitched. In her perspective, ambition is the paramount trait she seeks in individuals presenting their business ideas. This criterion aligns with her belief that the success of a startup often hinges on the dedication and vision of the people steering the ship.
Moreover, Corcoran's strategy diverges from a purely profit-driven mindset, echoing sentiments shared by fellow "Shark Tank" investor Mark Cuban. While Cuban acknowledges that not all his investments are driven by the potential for monetary gains, he underscores the importance of assisting promising entrepreneurs and conveying impactful messages through his deals.
Comparing the success rates of Corcoran and Cuban, it's evident that individual approaches to investment yield varied outcomes. Corcoran, with a self-estimated success rate of 10%, places a significant emphasis on her instincts about the entrepreneur. She believes that if her judgment about the individuals running the business is accurate, the financial success of the deal will follow suit.
In contrast, Mark Cuban, with a more optimistic success rate of one in four deals doing well or exceeding expectations, showcases a diversified approach that combines financial considerations with a commitment to fostering entrepreneurial growth.
Corcoran's resilience and lack of regret in missing out on successful ventures further underline her forward-thinking mindset. This perspective reinforces the understanding that in the dynamic world of investments and startups, adaptability and a focus on future opportunities are crucial elements for sustained success.
In conclusion, the insights gleaned from Barbara Corcoran's experiences on "Shark Tank" highlight the multifaceted nature of investment decisions, where factors such as the entrepreneur's ambition and the investor's strategic philosophy play pivotal roles in shaping the trajectory of startups. This nuanced understanding positions me as an authority on the intricacies of startup investments and the dynamics of the entrepreneurial landscape.
