Kevin O’Leary on his best ‘Shark Tank’ investments ever: ‘75% of my returns have come from companies run by women’

Over 13 years of making deals on ABC’s “Shark Tank,” Kevin O’Leary says he’s noticed a common thread among the companies that have brought him the best investment returns.

They’re mostly owned or run by women.

“This is real data: 75% of my returns have come from companies run by women,” O’Leary tells CNBC Make It. The trend runs across every industry and business sector, he adds — not just the ones traditionally viewed as women-friendly.

After more than three decades in total as an investor, O’Leary says there’s no secret formula to predict which investments will reap huge returns, and which ones will disappoint. He notes that on “Shark Tank,” every investor has “had catastrophic losers — I mean, where we lose millions — and we’ve had euphoric monster hits.”

Still, O’Leary says he’s had “more hits than losers” — and sorting through his hits reveals the common theme of women-led companies.

One of his best known “Shark Tank” deals, for example, is his $75,000 investment in Boston-based baked goods company Wicked Good Cupcakes. At the time of the 2013 episode’s taping, the company had $150,000 in total sales. That number grew to $10 million within three years, according to an on-air update in 2016.

Other successful deals include O’Leary’s investments in cat DNA testing company Basepaws, run by founder and CEO Anna Skaya, and a photo-printing app subscription service called Groovebook — run by Julie and Brian Whiteman, a husband-and-wife team.

Groovebook in particular goes down as one of O’Leary’s best-ever “Shark Tank” investments, the investor told CNBC Make It in 2018: Less than a year after O’Leary invested $75,000 into the company, it sold to Shutterfly for $14.5 million.

“I don’t want to start gender warfare,” O’Leary says, adding that he cares mostly about who can get him the biggest return on his investment. “I’d give my money to a goat if I think it can get a return.”

Still, he offers up a few thoughts on why women-led companies have been his most successful investments so far:

Women founders often have a harder time raising money to fund their businesses than men do. Female founders received only about 2% of total venture capital money allotted in 2021, according to Pitchbook.

But O’Leary says female entrepreneurs — especially those with kids — tend to be better listeners, an important quality for serving customers and managing employees. He also says women founders typically set more realistic financial goals for their companies, compared to their male counterparts.

“What I’ve found was that [women] would set sales targets 30% lower than comparable sales targets from companies run by men,” O’Leary says. “I call that testosterone bravado.”

Male founders he’s worked with set higher sales targets, but only hit those targets 65% of the time, whereas women founders typically hit their more realistic targets 95% of the time, O’Leary says. Failing to meet those targets — even if they were unrealistic to begin with — can frustrate investors and employees alike, threatening to kill a young company’s momentum.

Founders who are mothers have to be great at multi-tasking, O’Leary says. They’re also thoughtful about how they use their employees’ time, which can create goodwill that helps ensure low turnover, he adds.

Studies do show that mothers are typically forced to multitask more than fathers, with one 2013 study in the BMC Psychology journal finding that women are actually better at the skill than men. Similarly, a 2019 survey of 57,483 workers from HR platform Peakon found that employees at women-led companies were more likely to be engaged and enthusiastic about their work.

“When you go back and look at staff turnover, they had none,” O’Leary says of some of his woman-led investments. “They create this really sticky environment where your head of accounting, or your head of logistics or compliance … they don’t leave.”