"A smart idea"—When Shark Tank's Kevin O'Leary shared insights on investing in women and minority founders

In an interview on December 21, 2021, Shark Tank investor Kevin O’Leary was asked about his commitment to investing in women and minority-founded businesses. Discussing with Kelsey Warner, he was asked why he did not take a general approach by targeting American startups in broad sectors but instead focused on this specific demographic.

In response, O’Leary emphasized that his investment decisions are based on returns rather than any social agenda. The Shark Tank investor stated,

“It’s a smart idea from a government policy perspective in this place to have over half the country run by women—why not?”

His insights were driven by financial data showing that women-led companies in his portfolio consistently delivered strong returns.

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The investment strategy behind Shark Tank star Kevin O’Leary’s focus on women-led businesses

Investment decisions based on performance

O’Leary highlighted that his investment strategy is shaped by past portfolio performance. He explained that over the last 16 years, a significant portion of returns in his private investments came from companies led by women. He stated,

“Seventy percent of our returns have come from them, so we’re now very biased when we deploy new capital.”

O’Leary further emphasized that investing in private companies involves a return of capital before a return on capital. The Shark Tank investor underscored,

“You’re deploying capital, you’re betting on a team, and until you get your capital returned, there is no return on capital.”

According to his analysis, women-led companies have consistently demonstrated stronger financial performance, making them a strategic choice for investment. The composition of his portfolio also reflects this trend, spanning various sectors such as consumer goods, fintech, commercial kitchens, and even DNA testing for pets. He illustrated this with an example, stating,

“Wicked Good Cupcakes, just bought—was acquired by Hickory Farms last week—that’s one of my companies run by a mother-daughter team.”

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The role of goal-setting in business success

O’Leary identified goal-setting as a critical factor in determining business performance. He noted a key difference between male-led and female-led companies: men tend to set aggressive growth targets, while women set more measured, achievable goals. He explained,

“Men tend to set targets that are only achieved about 60% of the time, which means they put growth goals like 50% on an annualized basis.”

In contrast, O’Leary observed that companies led by women set conservative but attainable targets. The Shark Tank investor stated,

“You look at the women’s targets—significantly less—they may be only 15% growth they’re targeting, but they hit those goals 95% of the time.”

This consistency in meeting goals has a direct impact on business operations, particularly in areas such as compliance, logistics, and financial management. O’Leary underscored that stable and predictable performance fosters employee retention. He remarked,

“Where it manifests itself in outcomes is they have very sticky teams—nobody wants to leave something that’s constantly hitting its targets.”

High employee retention in key roles reduces disruptions, which is particularly important for small- to mid-sized businesses.

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A practical investment approach

The Shark Tank investor reiterated that his investment strategy is rooted in financial returns rather than personal bias. He stated,

“I’m not trying to start gender warfare—it has nothing to do with it—it’s returns.”

His approach is aligned with the fiduciary responsibility of maximizing investment outcomes. He also emphasized that this pattern of success is not limited to a specific industry, as women-led businesses across various sectors have demonstrated strong financial performance. He noted,

“We tried to study quarterly outcomes for seven years in our own portfolio to figure out what they’re doing because they don’t know each other, and these are different sectors.”

O’Leary concluded by stating that his investment decisions are purely based on profitability. The Shark Tank investor remarked,

“I’ve often said this—maybe whimsically—I’d give money to a goat if I could get a return.”

His focus remains on capital deployment that yields measurable outcomes, and the data from his portfolio continues to support investment in women and minority founders.

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