Barbara Corcoran is invested in helping female entrepreneurs get their businesses funded.
The 70-year-old self-made businesswoman quit her job as a waitress in her twenties to start her New York City real estate brokerage businesses with just a $1,000 loan. She later sold The Corcoran Group for $66 million in 2001.
With 72% of female business owners saying lack of capital is a top challenge, the millionaire investor on ABC’s “Shark Tank” wants to help young female entrepreneurs get the funding they need to grow. She teamed up with iFundWomen, a crowdfunding platform for female entrepreneurs and Systane, an eye drops brand, for its Real Relief for Visionary Women campaign to provide 10 women business owners $5,000 grants and mentorship to help build their companies.
She tells MarketWatch what it takes to run a business from scratch, and the product she invested $50,000 of her money on “Shark Tank” in that made her $30 million in a year and a half.
MarketWatch: Based on your experience on ‘Shark Tank,’ what’s the key to a successful product pitch?
Barbara Corcoran: If they can’t persuade me, I’m not going to be on that deal. What I want to know is, do they have the energy to carry the ball to the finish line? I’ve never seen someone with low energy become successful in life. I’m looking for someone who is very good when things go wrong. When s---t hits the fan, someone who could really get around it without feeling sorry for themselves. I can tell you what separates the men from the boys and the women from the girls -- some people take too much time feeling sorry for themselves, and when that happens the competitors take the ball. I’m looking for that kind of high energy personality.
MW: What are three things about money and investing people should know before starting their own business?
Corcoran: One, you should know it’s going to cost you a lot more than you think it’s going to cost you. People are always optimistic enough to jump off the cliff of entrepreneurship, but the money they think it’s going to cost is only going to sustain the business. It’s going to take a lot longer to get there. Double the amount of money you think you’re going to need to live on and get the product or service up and running. Two, pick up a partner with opposite skill sets than you. If you have the right partner, you have five times the chance of succeeding. I love partnerships. Three, you should have a clear understanding, if you do have a partnership, of what your skill set is and let each person take charge.
MW: How much of your own money should you invest in a business idea to get it off the ground?
Corcoran: Whatever you have to. The best businesses in America are started by people who bootstrap the business. They don’t get investments; they borrow a few thousand from family and friends; they max out their credit lines, particularly women. Women have a much harder time getting money than men do.
MW: What’s the best financial advice you’ve ever been given?
Corcoran: The best financial advice was actually the worst advice from my own mother. She told me when I was starting my business at 21, she said, ‘Why don’t you stick with a job for a change and get a resume in order?’ I felt guilty because she was really spot on, but if I listened, I would have never started my own real estate company. The time to start a business is the minute you think of it and you’re all excited. You’ve got to put your foot in the ground and get it going. If I had listened to my mother or naysayers I wouldn’t have had the opportunity to build a business.
MW: What was your last great investment?
Corcoran: Last season [on ‘Shark Tank’] two crazy guys, brothers, who had nothing more than a homemade sweatshirt blanket you drape over your head with a big hood. They called it the Comfy. They didn’t have any idea who would buy it –– none of the Sharks were interested. I invested $50,000. My $50,000 is worth $30 million, that was in just one and a half years. Not bad on a $50,000 investment. I could honestly say I saw it coming. That’s my best ‘Shark Tank’ investment.
MW: What do you hate spending money on?
Corcoran: I like spending my money, but I would say clothing. I’m forced to spend a lot of money on clothing –– the dress, dress shoes, the bag –– I have to look the part. I’m much more comfortable in my khaki shorts and an old T-shirt that’s too big for me. That’s who I want to be with my sneakers on.