Investor Barbara Corcoran said that she has learned to spot the red flags of “well-intended misrepresentations” and fancy talk during her four seasons judging startups on Shark Tank.
Corcoran talked with Henry Blogett of Business Insider about how many companies she has invested in — about 25 — and how many have worked. Here is how she evaluated the four seasons:
- Season 1: Lost money
- Season 2: Broke even
- Season 3: Made money
- Season 4: Doing very well
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“The key is that I bought early; it takes four years for these companies to turn into moneymakers,” she said.
She said that up to a third of the deals do not close once due diligence starts.
“You find out that they are just making stuff up — the ex-husband owns the patent or sales numbers are just projections,” she said. “I call this well-intentioned misrepresentations.”