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THE MERCHANT OF TRUTHIN CONVERSATION WITH KEVIN O'LEARYWhether you hate him, despise him or loathe him, one thingis for certain... business tycoon Kevin O'Leary knows how tomake a memorable impression. Known as the cruel one onthe hit CBC shows Dragons' Denand Lang O'Leary Exchange,and on ABC's Shark Tank, the self-styled Merchant ofTruth pulls no punches, more often than not delivering theknockout blow that keeps viewers coming back for more. 44

COLLECTIONS: What makes a great entrepreneur? Kevin O'Leary: A great entrepreneur is someone who realizes that thereis no balance in life when you're on the journey of building yourbusiness. You basically sacrifice everything to get that business upand running. And I don't mean you shouldn't have balance in your lifefor your lifetime. I mean during the period that you're an entrepreneurand you're focusing your energies into making that business work, youneed to dedicate 110 percent of your effort. The entrepreneurs thatare successful, the ones that I invest in, get that. If you look historicallyat terrific businesses, they're founded by people like that. Myopicfocus on success during that initial period is required. C: You're outspoken about your refusal to work for anyone. What'swrong with being the employee? KO: Nothing, it's just not for me. and it's not for many entrepreneurs.In my book, I talk about what makes a great employee and what makesa great entrepreneur. There are differences, and sometimes you haveto ask yourself what matters most to you in your life, and that willdetermine which path you take. I like to control my destiny. I have avery simple mantra: Every day, I want to go to bed richer than when Iwoke up. That requires being an investor, and that??is the freedom I'veearned for myself. C: What makes a great pitch? KO: Well, I've done a little work on this. I've been on Dragons' Denfor six years and on Shark Tankfor three, and I've seen thousands ofpitches. I find there are three attributes every single successful pitchhas. First, the entrepreneur was able to articulate their vision and theopportunity in 90 seconds or less. In every case, in the space of aminute and a half, they're able to say "Here??is my idea and here??ishow it's going to make you rich if you invest in it." When an idea isso pure and so ingenious and so easy to understand, half the battleis done. The second attribute is that they are able to articulate whythey should be the person or the team to execute the business plan.That takes a little longer, about five minutes. So now we're at aboutsix minutes, when all of a sudden something happens. When thosetwo fall into place, the individuals or the team start to sizzle like anisotope and they emerge as leaders. You start to believe, even thoughthere??is risk inherent, that they can actually pull it off and you wantto write them a cheque. C: You??are always asking for the numbers to determine value, yet evenfrom your own experience selling your Learning Company to Mattel,it??is not uncommon for an acquisition to underperform. In that light,how do you find the truth in the numbers, and what indicators shouldinvestors be looking for? KO: I invest in businesses that have shown some level of success; inother words they have sales. But the most important decision inmaking an investment is to not overpay. If you want to make a return,you have to pay a fair price for it. I??am not trying to steal businessesfrom people, but I don't want to overpay because I will have no chanceof getting a return on my capital. I also often go for control because ifthese people can't execute their business plan, I want to be able tofire them and hire someone who can. It doesn't mean they'll lose theirmoney. they??are still an owner, they??are just not good managers. Ithink valuation is absolutely crucial. I've got pretty good experience atdetermining value, and I don't worry about a deal that doesn't happen.If we can't get there, I'll forget about that deal in two seconds. Thereare a thousand more coming. C: How many have you invested in through your shows? KO: It's not just those, I have many other venture investments. At any time,I've got about 20 positions open. On Dragons' Den, when you see adeal with a handshake, one in three of those close. So two thirds don'tsurvive due diligence. Of the ones that we invest in, one in 17 makes money.C: Do you find that the opportunities are different on the Americanshow versus the Canadian show? ntagonistic personalities in the media are often more interestingthan those that tow more progressive lines, and O'Leary, nostranger to marketing, is thriving in the role. It should come thenas no surprise that he's emerged as one of the leading lights of the CBCshowcase, standing out in stark contrast from others within the nation's mostliberal broadcaster.Between his new book, The Cold Hard Truth, at the top of the best seller'slist, his business O'Leary Funds managing over a billion and a half dollars inassets, and a variety of TV projects well-ensconced in the popular culture,there is seemingly little O'Leary can't succeed at. He's even a pretty decentbluesman with a collection of vintage guitars. COLLECTIONS'JeremyFinkelstein sat down with the multi-millionaire at a recent press junket for acandid conversation on entrepreneurship, investing and family. A45