Kevin O’Leary’s Top ‘Shark Tank’ Investments Are in Women-Led Startups

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Over 13 years of making deals on ABC’s “Shark Tank,” Kevin O’Leary says he’s noticed a common thread among the companies that have brought him the best returns.

They are mostly owned or run by women.

“This is real data: 75% of my returns come from women-led businesses,” O’Leary told CNBC Make It. The trend is seen in all industrial and commercial sectors, he adds, and not just those traditionally seen as favorable to women.

After more than three decades in total as an investor, O’Leary says there’s no secret formula for predicting which investments will yield huge returns and which will disappoint. He notes that on “Shark Tank”, every investor has “had catastrophic losers – I mean, where we lose millions – and we had euphoric monster hits”.

Still, O’Leary says he’s had “more successes than losers” — and sorting through his successes reveals the common theme of women-led businesses.

One of his best-known “Shark Tank” deals, for example, is his $75,000 investment in Boston-based baked goods company Wicked Good Cupcakes. At the time of taping the 2013 episode, the company had total sales of $150,000. This number increased to $10 million within three years, according to an on-air update in 2016.

Other successful deals include O’Leary’s investments in a cat DNA testing company Basic legsled by founder and CEO Anna Skaya, and a photo-printing app subscription service called Groovebook — run by husband-and-wife team Julie and Brian Whiteman.

Groovebook in particular is considered one of O’Leary’s best “Shark Tank” investments, the investor told CNBC Make It in 2018: less than a year after O’Leary invested $75,000. in the business, she was sold to Shutterfly for $14.5 million. .

“I don’t want to start a war of the sexes,” O’Leary says, adding that he mostly cares about who can get him the biggest payback. “I would give my money to a goat if I think it can yield.”

Still, he offers some thoughts on why women-led businesses have been his most successful investments so far:

Why women can be better startup founders: Less ‘testosterone bravado’

Women founders often find it more difficult to raise funds to finance their business than men. The founders received only about 2% of total venture capital funds allocated in 2021, according to Pitchbook.

But O’Leary says female entrepreneurs — especially those with children — tend to be better listeners, an important quality for serving customers and managing employees. He also says female founders generally set more realistic financial goals for their businesses, compared to their male counterparts.

“What I found was that [women] would set sales targets 30% lower than comparable sales targets of male-led businesses,” O’Leary says. “I call it testosterone bravado.”

Male founders he’s worked with set higher sales goals but only hit those goals 65% of the time, while female founders typically hit their more realistic goals 95% of the time, O’Leary says. Failure to achieve these goals – even if they were initially unrealistic – can frustrate investors and employees, threatening to kill the momentum of a young company.

Founders who are moms need to be good at multitasking, O’Leary says. They’re also mindful of how they use their employees’ time, which can create goodwill that helps ensure low turnover, he adds.

Studies show that mothers are generally forced to multitasking more than fathers, with a 2013 study in the BMC Journal of Psychology finding that women are actually better than men in this skill. Similarly, a 2019 survey of 57,483 workers at HR platform Peakon found that employees of female-led companies were more likely to be engaged and enthusiastic about their work.

“When you go back and look at the turnover, they didn’t have any,” O’Leary says of some of his female-led investments. “They create this really sticky environment where your head of accounting, or your head of logistics or compliance…they don’t leave.”

Disclosure: CNBC has exclusive off-network cable rights to “Shark Tank.”

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