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Kevin O'Leary

April 10, 2014 by Speakers' Spotlight

Kevin O’Leary on Leaving Dragons’ Den, Done Deals and Defending the Wealthy 1%

Kevin O’Leary has been the resident tough guy on CBC’s Dragons’ Den since Day 1, always ready with a stinging reason why a business idea would never work. Don’t get him started on board games. Pitchers and viewers will be spared/miss those barbs — Mr. O’Leary (along with Bruce Croxon) are not returning for Season 9. Mr. O’Leary has been doing double duty as a Dragon and Shark on the U.S. show Shark Tank for the past five years. In that time, he set up a company, O’Leary Ventures, to manage his portfolio of 26 Dragons’ Den, Shark Tank and private equity investments. In this wide ranging discussion, he tells The Financial Post about the early days of the show, his favourite investments and why it’s a mistake to vilify the 1%:

On leaving Dragons’ Den and remaining on Shark Tank As Dragons’ Den did in Canada, Shark Tank has grown and each year more shows are contemplated. It became impossible to shoot 46 shows and keep my other commitments. At some point, you run out of runway and that’s what happened. I’ve also been on CBC’s Lang & O’Leary Exchange for more than a decade and that’s been an important platform for me. So it wasn’t so much a Shark Tank/Dragons’ Den conflict as it was how do I make it possible to keep my daily commitment to Lang & O’Leary.

On his decision to join the Den The premise of the show intrigued me. I sat down with Stuart Cox who was the first show-runner of Dragons’ Den and I said, ‘This is interesting because if it works, it will become a platform for launching businesses in Canada.’ Of course, our first season was nothing less than a disaster, but there was something there. I have to credit the CBC for sticking with something that wasn’t making them any money. Still, I think we were all encouraged by what was happening in Britain [the Canadian show is a spinoff from Dragons’ Den BBC] because by their third season, they were starting to get geometric traction. We were hopeful we could find the same path and that’s exactly what happened.

On his favourite Den deals The crowd that are still around and that I’m active in: MacKenzie and Marr Guitars (www.macmarr.com); Easy Daysies magnetic schedules for children (www.easydaysies.com); Dig It gloves (www.digithandwear.com); IQzone (www.iqzone.com), Holiday Rejects (holidayrejects.ca); Last Call (www.lastcalldrink.com); Vineland Estate Wines and O’Leary Wines. To me, all of these deals are still alive. Some doing better than others.

Easy Daysies is now selling in the U.S. It was an educational product the entrepreneur created at her kitchen table. That was a bet on her [Elaine Tan Comeau]. She really had a vision and the support of her husband and her family and you could tell, one way or another she was going to make it work. It’s a growing business.

MacKenzie and Marr is an established guitar brand now out of the East Coast.

With Dig It gloves, I made my money back right away. The entrepreneurs are very smart and have built a brand and added more product lines. Their challenge now is to continue to reduce the cost of manufacturing.

What I’m most interested in now is the Future Dragons’ Den Fund, where we’ve now seeded 10 entrepreneurs in grades 11 and 12 across Canada. I look forward to what they are going to do in the next 12 months. Just because I’m not on the show doesn’t mean I won’t follow up with those people. I was very involved and proud of that philanthropic effort.

On his most successful deal It was a deal I made in the second season that never aired, IQzone. In the early days, so much ended up on the editing room floor because we didn’t know what was going to work. IQzone was an Internet play that has morphed into a mobile advertising technology. I put US$250,000 into it and it was just at the Mobile World Congress in Barcelona. The company looks like it has a tremendous future.

On when and how Dragons’ Den captured its audience The real stars of the show are the entrepreneurs who have the guts to come in there and try and extract an investment. I think the reason the audience grew is that the producers became very savvy in choosing who would present. I started to notice in Season 3 that the quality of the deals and the teams making the pitches really got better. It was after Season 3 that people started to stop me on the street and say ‘aren’t you that guy on Dragons’ Den.’ That’s when the tide turned.

On what pitchers need to score a deal There are three key attributes successful pitchers share: they are able to articulate the business in 90 seconds or less; they are able to convince the dragons they have the right team to execute their business plan; they know their numbers.

On the evolution of Canada’s entrepreneurial culture Having gone through the financial crisis, people have come to the conclusion there is not a lot of risk differential between working for a large company where you can be fired at any moment and starting your own business. There is a new generation of people who would like to make entrepreneurialism work for them to achieve freedom. It’s not about greed. It’s about finding a way to provide for yourself and your family.

On the 1% and wealth disparity As a result of the financial crisis, particularly in Canada and the U.S., we are vilifying success and the wealthy. What people forget is these business leaders created thousands of jobs and pay billions in taxes. They are the ones that make the economy grow. It’s a huge mistake to get the government more involved in business. This is why I want to continue to participate in Lang & O’Leary. My experience on Dragons’ Den has shown me that government has to get out of small businesses’ way and I want to share that message. I look at Quebec and it’s a disaster. The government has brought that province to its knees. Hopefully, through this election process they’ll focus on what matters: jobs. I’m a very proud Canadian entrepreneur and I would like to get the dialogue going.

The Financial Post/April, 2014