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The Shark Tank investors once talked about 11 investment tips before the premiere of season 10. Mark Cuban, Barbara Corcoran, Lori Greiner, Daymond John, and Kevin O'Leary sat down for a discussion with Vanity Fair and their YouTube interview was released on October 9, 2018.
They discussed how they make their decisions like investing in "smart people" or in areas of one's expertise. Shark Tank stars shared business secrets and taught lessons for investors who are either new or veteran.
The Shark Tank cast's top investment strategies for every investor
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1) Focus on cash flow, not the principal
Kevin O'Leary mentioned how his mother taught him to invest in assets that generate regular income streams, such as dividend-paying stocks or rental properties, without touching the principal. The Shark Tank investor emphasized this, stating:
"Never spend the principal, only the interest."
O'Leary highlighted that the above strategy ensures financial stability by keeping the principal intact and relying on the ongoing cash flow.
2) Constant learning and adaptation
Mark Cuban advised investors to "always be learning." He shared how understanding emerging technologies has opened doors throughout his career, such as pioneering streaming services and launching an all-HD TV network.
Cuban suggested that staying informed and adapting to new trends can provide a competitive edge. In this way, investors can spot opportunities better and innovate in their industries.
3) Invest in real estate you control
Barbara Corcoran shared a key strategy for any business owner: investing in the real estate where one operates. She added this approach allows entrepreneurs to avoid high leasing costs and gain the long-term benefits of property value appreciation. The Shark Tank investor explained:
"You need to try your best to buy the real estate you're doing business in as quick as you can."
4) Invest in people you want to work with
Lori Greiner highlighted the need to invest in individuals who are both capable and trustworthy. She said that the entrepreneurs she invests in must be those she is conviced to work with. Greiner emphasized that a positive, ethical relationship with business owners is crucial for success.
She added that mutual respect creates a collaborative environment, thus increasing the chances of long-term success for both investors and entrepreneurs.
5) Invest in what you understand
Daymond John stated that investing in the area of one's expertise is a critical component of success. The Shark Tank investor said:
"It's best to invest in businesses that you understand."
For the unversed, John’s expertise lies in fashion, particularly retail such as FUBU brand, and he focuses his investments on areas where he can apply his knowledge. By understanding the ins and outs of a business, investors can make informed decisions and avoid unnecessary risks.
6) Be open to new ideas
Mark Cuban also touched on the matter of "being open to new ideas and new perspectives." He shared in the Vanity Fair interview that being aware of the necessity for diversity in his company's leadership enhanced the Dallas Mavericks' connection with new markets. Cuban's approach is based on broadening one's thinking to encompass diverse perspectives.
7) Follow your passion
Daymond John encouraged aspiring entrepreneurs to invest in ventures that align with their passions. The Shark Tank investor noted:
"Just do something you absolutely love."
John explained that when people are passionate about work, it fuels their dedication and drives them to succeed. He added that this connection between passion and success is vital, as it enables entrepreneurs to persist through challenges and build something meaningful.
8) Excitement can drive success
Lori Greiner also discussed how enthusiasm can influence business success.
"Excitement is infectious," the Shark Tank investor noted.
Greiner explained that when an entrepreneur is excited about their product, that energy can convince others, including investors, of its potential. She mentioned this zeal not only enhances a pitch but also motivates a team, leading to better outcomes and stronger business growth.
9) Invest in smart people
Barbara Corcoran emphasized the value of investing in individuals who are not just educated but also "street smart." These individuals, she explained, are quick thinkers who can adapt to changing circumstances and overcome obstacles.
10) Kindness can be a business asset
Mark Cuban shared how his approach to business has evolved, particularly when it comes to the value of kindness. He reflected on his early career, admitting that in his 20s, his impatience and temper often got in the way of effective business relationships. Cuban explained:
"I wouldn't want to do business with me when I was in my 20s."
Over time, the Shark Tank investor realized that being kind and approachable creates stronger, more productive partnerships.
11) Know when to cut your losses
Both Daymond John and Kevin O’Leary spoke about the importance of recognizing when an investment isn’t working out. O’Leary advised:
"If a company you invested in three years ago still isn't profitable, the best thing to do is take it behind the barn and shoot it."
He reiterated that one should not hold onto failing investments for too long. Instead, assess the portfolio regularly and focus on businesses with better growth prospects.
Tune in to Shark Tank on ABC every Friday at 8 PM ET, or watch on Hulu.
