There’s nothing wrong with Canadian entrepreneurs, says a man who has had countless business ideas pitched his way.
Rather, insists Kevin O’Leary, the celebrity venture capitalist from CBC’s Dragons’ Den and its American counterpart Shark Tank, the aspirations of businessmen and businesswomen in this country are being stifled by an onerous tax system and conservative banks.
“I believe that every province, every federal government agency, wastes about a third of the money that they get. So why not drop taxes down and make it very competitive here; leave the money in the entrepreneurs’ and the Canadians’ pockets and let them invest it themselves? Then you’d see productivity and innovation.”
O’Leary was in Red Deer on Monday to speak with investment advisers about O’Leary Funds, a mutual fund company that he co-founded in 2008.
He later shared some of his views on entrepreneurship with the Advocate, including his belief that the growth of many businesses is constrained by tight capital.
“Canadian banks, although they talk a good story, don’t lend anybody any money that has sales under $10 million,” he said. “That’s just the conservative nature of the Canadian banking system.”
O’Leary and his counterparts on Dragons’ Den and Shark Tank have provided a financial boost to many businesses, but they’re not motivated by generosity.
“I’m not trying to make friends on Dragons’ Den or Shark Tank, I’m trying to make money,” said O’Leary. “I don’t care if people like me or don’t like me — I want to be a good investor.”
The two programs, in which entrepreneurs pitch their ideas to a panel of investment moguls in hopes of gaining well-healed and business-savvy partners, have proven to be fertile ground for venture deals, he said.
“I used to have to go and find them, but now with Shark Tank and Dragons’ Den, I just wait for them to come to me.”
O’Leary said that generally speaking, only about one in 25 venture investments make money.
“But on Dragons’ Den in England and Canada, and Shark Tank in the U.S., it’s one in 15.”
He credits this in large part to the huge marketing benefit that an appearance on those programs can bring to a business.
“Last Friday, I invested in a company called Wicked Good Cupcakes in Boston. We sold $100,000 in cupcakes because of their appearance on the Shark Tank show in one day.”
The entrepreneurs who do best under the television lights typically have a few things in common, said O’Leary. They can succinctly describe their vision and how it will generate money, and they can justify why they’re the best person to execute the plan.
“And thirdly,” said O’Leary, “they know their numbers.”
Red Deer-based GoTire Mobile Tire Service, which was featured on a Dragon’s Den episode in January, met these criteria, he said.
“That’s an example of a good pitch,” said O’Leary of the mobile tire-changing and replacement service, which was founded by Craig Howes and Heather Murphy and is now being franchised. “Everybody who saw that understood what they did, how they made money and how they were going to grow the business.”
Among O’Leary’s other pursuits are a line of wines (O’Leary Fine Wines) and O’Leary Mortgages, which he expects to launch in September.
He’s also written two books: Cold Hard Truth On Men, Women & Money and Cold Hard Truth: On Business, Money, and Life. In the first, O’Leary stressed the importance of learning how to manage money throughout your life — including as a child.
“I’m a huge advocate for educating kids about money,” said O’Leary.
“I want my child at the age of five to understand what debt is, because it’s a very bad thing if you don’t understand how to deal with it in life.”
He described the consequences of failing to learn how to handle debt.
“If you think alcoholics have problems, you should go to a debtors anonymous meeting and see the devastation that debt can create and bankruptcy creates; how it breaks up families and wipes out lives and kills careers.”