How do Shark Tank’s Daymond John and Eric Hippeau, former CEO of the Huffington Post and creator of NowThisNews, balance their hundreds of investments in entrepreneurs? Both hold certain standards before investing in companies, which they talked about at the Nasdaq MarketSite stage Monday morning.
Hippeau, originally from France, formerly was the CEO of Ziff-Davis and published PC magazine. At the time, Hippeau knew that the personal computer was going to be the disruptive technology. Of course, the PC took over the world and Hippeau began investing in many tech companies, including Yahoo.
When choosing companies to invest in, Hippeau said he invests in entrepreneurs that are incredibly resilient Last year, Hippeau talked to over 1,700 companies and invested in only 40 of them. In total, Hippeau invests in around 320 in his portfolio. 70 percent of his companies are based in New York, thus he chooses local companies. With that, around half of Hippeau’s companies are software-based, as he believes the biggest disruptive force in business today is software.
Before John invested in companies, he started his company Fubu (For Us By Us) in the early ’90s because of his connection to the flourishing hip-hop community. Hip-hop was a “disruptive technology because kids could hear the communication of other kids, basically our version of Twitter,” John said. Although he never tried to be a hip-hop artist himself, John realized that entrepreneurs were starting to make money on the hip-hop community through clothing and lifestyle brands. He understood during the early ’90s, designers and brands didn’t want African Americans or inner-city kids wearing their clothes, so he decided to create his own brand. Fubu created a hip-hop community for consumers, not just artists.
Today, John focuses on his time on Shark Tank and his investments outside of Shark Tank. Although you may think shooting takes place over months, John says Shark Tank only films ten days in June and ten days in September. And just how many companies apply to get on Shark Tank? About 50,000 are online waiting for the producers to weed through. John says about 200 companies or entrepreneurs go on air each year, while about 140 companies end up making a deal with one of the Sharks. John makes about 15 deals on-camera, but only about 10-12 deals actually go through after months of negotiations.
But does John regret passing on any companies in the Shark Tank world? No, because he says there are just too many companies out there, and he’d really need to get to know the entrepreneur and their company goals.
John brings his passion for building communities full-circle as he focuses on searching for brands with a social cause, such as Bambas, a sock brand, which donates a pair of socks to a homeless center for every pair a consumer buys.
“If a business has a social cause to it, it shows that the passion they have there is extremely strong, says John. “Millennials have an option to buy whatever they want, [and] they generally want an experience and have a way to help others. It’s more attractive when I see a company that is helping others.”