Shark Tank star and the founder of FUBU Daymond John shares what he looks for when investing in companies.
“We invest in people,
not in businesses”
Daymond John’s 5 Traits Of Good Business Leaders
1. You’ve failed before
If you haven’t failed in business before, you will. And it’s your ability to pick yourself up and keep going in spite of setbacks, rejection and disappointment, is what’s going to determine whether you succeed or not.
No doubt when go fail and go through hardships in business, and you still get back up, it shows you’ve got persistence and perseverance. Without which it’s just impossible to succeed.
Most people talk a good game. Very few have the mental toughness it takes to make it. From my experience, the vast majority will tuck their tail between their legs with the first sign of adversity and run the other way. So it makes sense that investors like Daymond John want to know, whether you’ve got that mental toughness before investing in you.
2. A twinkle in their eye
Daymond says you have to be excited, and love what you’re doing for him to buy into you. Yeah, it’s kind of hard to succeed when you don’t have the passion in your eyes.
This was also one of Steve Jobs’ rules for success.
Jobs says that having passion and doing what you love gives you the edge you need to be persistent, because, in his words “You have to be insane to do this. No sane person would put themselves through what it takes to be a successful entrepreneur. When you love what you do, it fuels your ability to keep going.” Definitely something to chew on.
3. Are you easy to understand?
Can you explain what you do and share all the information about your business quickly and in a way others will understand?
Because if you can’t, that means you’re confused about it, and how can you expect others to understand.
When I heard that, it reminded me of something I read years ago by Peter Lynch, the fund manager of Fidelity Magellan, which was a powerhouse mutual fund back in the day.
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.”
4. Do you have mentors?
Are there people who are your mentors, someone you look up to? Successful entrepreneurs are always eager to learn and grow. People who “know it all” rarely succeed at anything.
5. Driven and will never ever stop
Successful people are relentless about pursuing their goals. They know what they want and they go after it. And there’s nothing that can stop them.
Daymond John says when people have this quality, even if this business fails, we’ll do another business together.
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