Kevin O'Leary, better known as Mr. Wonderful from Shark Tank, knows a thing or two about making bets that pay off — especially the crazy ones. In a discussion with Chris Wallace, O'Leary opened up about the unpredictable world of venture investing.
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He explained how some of his most bizarre investments, like a company offering genetic testing for cats, turned into massive wins that covered a bunch of other losses. The truth? Venture investing is random, and a lot of it comes down to luck.
Back in 2019, O’Leary made a seemingly wild bet on Basepaws, a startup that provides DNA tests for cats. At first glance, it seemed like a quirky, maybe even questionable idea. But Mr. Wonderful went for it anyway. He invested alongside fellow shark Robert Herjavec, each putting in $125,000 for a 5% stake.
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Fast forward a few years, and Zoetis ZTS, a giant in the animal health industry, scooped up Basepaws for well over $50 million. That acquisition meant O'Leary’s initial investment potentially turned into a 90x return — not bad for something that sounded like a pet gimmick at the start.
"Venture investing is random," O'Leary admitted. "There's a lot of luck in it." For him, diversification is key. O’Leary explained that, out of the 10-15 deals he makes each year, only a few will end up being big wins, but they're the ones that make all the difference. And often, the winners are the ideas that seem the most unpredictable, like cat DNA tests or a meal-kit service like Plated, which was sold to Albertsons for about $300 million.
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A notable deal that got away from O’Leary was Ring, the smart doorbell company. He famously passed on Ring when it was pitched on Shark Tank, and it was later sold to Amazon AMZN for $1 billion. As he told Wallace, “Thank you for bringing it up Chris. You’ve ruined my day. I get this one shoved in my face all the time.”
In a recent podcast, O’Leary revealed a fascinating stat — 70% of his returns come from companies led by women. He's found that women entrepreneurs tend to be strong at managing risk, making deliberate choices that help their businesses stay steady even when things get tough. "If you want something done, give it to a busy mother," O’Leary said, highlighting how balancing multiple responsibilities can make someone a great leader.
To O’Leary, venture investing is more about taking risks, spreading bets, and understanding that the most unusual concepts can occasionally lead to the greatest returns.
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