TV

Kevin O'Leary Talks 'Shark Tank,' Canada vs. The United States And Leaving 'Dragons' Den'

10/23/2014 02:47 EDT | Updated 10/23/2014 03:59 EDT
CTV

Swimming with sharks has never been so entertaining -- or profitable -- like it is on "Shark Tank."

The reality series finds aspiring entrepreneurs pitching their business ideas to a quintet of wealthy moguls dubbed "sharks." The goal is to entice at least one of these investors into ponying up the cash needed to jump-start a venture or take it to the next level. Sometimes one or more sharks are interested. Other times, they team up on deals. But beware. Participants who are unprepared or too greedy typically get chewed up, spit out and left with nothing.

Arguably the Great White Shark of the panel is Kevin O'Leary, who you'll recall also previously served on the Canadian version of "Shark Tank," "Dragons' Den." The shrewd businessman, who earned the nickname Mr.Wonderful, recently spoke to HuffPost Canada TV about "Shark Tank" Season 6, the art of wheeling and dealing, and being labeled a villain.

HuffPost Canada TV: For people who don't know, where did the nickname Mr. Wonderful come from?

Kevin O'Leary: It came from Season 1, when I was having a disagreement with Barbara [Corcoran], who's also a shark on the show. She was bemoaning that I don't bring enough emotion into telling people that their ideas are bad. I argued with her that she's always trying to make them feel good about a bad idea, which in the long run is a bad thing to do with them. She said, "Aren't you wonderful?" I said, "Yeah, I am Mr. Wonderful." That's how it started. We actually found that tape recently.

What's your philosophy about making deals, and has it changed at all during the years?

It has, actually. What I learned about venture investing is it's relatively a liquid. Let's say I have 25 deals on my books right now. The ones that have made me the most money have mechanisms built into them, that return capital over the years through royalties or dividends or distributions that I've structured into the deals up front. I put myself at a preferred share position and those have actually worked out better for everybody. It puts more discipline in the business to generate cash to pay me back. It's actually been built into the show over time. I have some very innovative structures that I use now -- debt, equity, royalty structures -- all kinds of new things that I've introduced into "Shark Tank" that have ended up being much better for me as an investor, and have worked out quite well for the companies.

It's safe to say board games are not your thing. What other products get an automatic pass?

Very often, products that are in brutally competitive spaces. Let me give you an example in the food category: hot sauces. Every season we get somebody who says, "This is my granddaddy's hot sauce recipe. It's different than every other hot sauce in the world." The truth is that's almost impossible to get market share in. The shelf space is jammed with so many offerings that you have to buy your way in. I hate categories that have no growth, that have brutally competitive distribution challenges, and where the operator has never made any money in that business in the first place. I'm the first person to say, "You are wasting your time. Take that behind the barn and shoot it."

The sharks always hammer it home about presentation and knowing numbers. How would you sum up this season's entrepreneurs?

What's happened is the "Shark Tank" platform has become so big and such a phenomenon that for most presenters that come on now, it's like "American Idol." There's a quarter-million people trying to get on the show, of which only 300 will make it. Maybe 200 of those will actually air. What happens is when they find out they're going to appear, they go back online and look at every single episode. They can see which deals get funded and which ones didn't and why. They come onto the show very educated in the backgrounds of every shark, into the types of deals the sharks do and the structures. They almost know which shark they want as their investor. It's a much more sophisticated group of presenters now, because the platform has been proven over and over again to launch businesses. Real companies with real products and real distribution are coming on. The quality and the size of the deals are increasing each year. This year is no exception.

Nonetheless, there are moments when the sharks blow a fuse. They've even retracted offers. What really gets under your skin?

I don't mind arrogant assholes. I'm OK with that because that shows me some confidence. We have plenty of those. I'm not there to make friends. I'm there to make money. What I don't like is when an investor or an opportunity comes along, I make an offer, and clearly they're not willing to engage in the negotiations. They're trying to use me to get another offer at a higher price. That makes me mad. I've come up with some pretty sophisticated ways not to be used like that. I don't want to be a Trojan Horse. No shark does.

The other sharks frequently bust your chops. Is there a rivalry between everyone or is that banter for the camera?

What happens is we get up at 5 a.m. and we're not finished until 10 p.m., 27 days in a row. I don't care who you're with in a room for that period of time, they are going to get on your nerves. I think that's what happens on "Shark Tank." You see that. There are rivalries. These are all self-made millionaires. They all have huge egos. We compete. These are real businesses and we've made real money on these deals. When a good one comes walking in, I want it for myself. I'm not interested in sharing it and I'm happy to compete. I don't care if the other sharks don't like my style or how I present myself. It doesn't matter to me.

It must make your day when you steal a deal away from them.

I enjoy it, but it doesn't mean success. I must say, over the years of doing this, the deals I thought were going to be hugely successful ended up failing. And the ones I thought were marginal at best ended up being huge hits.

What can you tease about upcoming episodes?

You're going to see three different things. We have much more technology this year. There are all kinds of new sensing devices, applications for wireless and really interesting technology in the consumer goods and services area. Number two: deal size is up about 40 percent. We have our first $5 million deal. That's because the companies are getting so big that are coming on the show. Number three: this is the year you are going to be stunned by what happens with ratings. It just doesn't stop growing. It's very rare in reality television and in the sixth season to have any growth at all. It's a phenomenon that nobody understands. Our fastest growing segment is 9 to18-year-old girls. I get stopped by 9-year-old girls in airports now that ask me about evaluations on deals they saw. It's really amazing that young people are getting so engaged.

How much do the sharks rehash when the contestants leave the room?

A lot. Some of that gets captured on tape and is often aired, but just a few seconds of it, particularly when a deal fails. In other words, they had offers and they blew it. It's very interesting to listen to that dialogue afterwards. That's happened many times where somebody had a deal and didn't take it, or had it and was so ineffective at closing that they lost it. The one I like all the time is when somebody says, "Let me leave the tank. I want to call somebody." After all these seasons, you have to know with certainty you are an idiot to do that. It gives the sharks a chance to talk amongst themselves and we often collude. You get absolutely screwed.

When did you realize "You are dead to me" was fast becoming your catchphrase?

[Laughs] These things happen virally, in a way. I remember the episode where that happened. I remember the entrepreneur, and he was so frustrating. When he refused my offer and he turned around, it just came to me. I said, "You are dead to me." I just wanted to erase him from my memory. The next morning, it was obvious from social media that it had caught on. All kinds of kids were emailing me saying, "You are dead to me. You are dead to me." It's a high school catchphrase now. I think it's really cool.

What's the difference between being a dragon and being a shark?

I don't think there is a difference. The entrepreneurs in Canada, and I can speak with authority on this because I did the show [Dragons' Den] for eight years in Canada, are the same. There's the same aggressive nature and entrepreneurial spirit. The difference between the two shows is sectorial. In other words, in Canada we have three sectors. We have energy, commodities and banking. In the U.S., we have 10 sectors, including health care, technology and defense. The range and diversification of deals on "Shark Tank" over the years is dramatically different. We have more concentrated deals in Canada and more diversity in the U.S.

"Shark Tank" often paints you as the villain. What's the biggest misconception about Kevin O'Leary?

Here's what I think has happened over the years: I'm not a villain. I'm the only shark that tells the truth. A lot of people can't handle the truth. I say, "In money, there's no room for gray." I have this discussion with Barbara and Lori all the time, because I sit beside them on set. They are always saying to me, "Why are you so mean to that person? Why do you have to say their idea has no merit and that they are going to go bankrupt?" And I say, "Because it's the truth. And it's a crime for you both to sit there and encourage them to continue to spend their money and their family resources ... on an idea that has no merit and should be taken behind the barn and shot." I'm the hero here. I am the only shark that tells the truth. I am Mr. Wonderful by that definition. Everybody else ... they're the bad guys.

"Shark Tank" Season 6 airs on Fridays at 9 p.m. ET on CTV Two.

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