How To Make A Good Investment

As an entrepreneur or business owner, you’re always looking for ways to invest your money wisely.

As an investor, board member, and mentor, I get this question a lot……

But how do you know if an investment is a good one?

There are a few key things to look for when considering an investment.

How do you choose what companies to invest in?

During my time with Kevin Harrington, the original shark from Shark Tank, we would look at investment opportunities sometimes every day.

Often we’re vetting a company to choose whether or not to invest in it on a weekly basis, and we would go through many companies.

We developed a little bit of a system or even a formula for how to choose what companies to invest in.

After looking at thousands of different investments, what we found is, the concept that Kevin used to say, “I invest in the jockey, not the horse”.

In other words, he’s looking for a good horse, a business he would buy from, a product he would purchase, and a company that would be his best customer.

Investing with a formula works!

I have continued using Kevin’s formula.

Finally, I decide whether to invest in a company based on who is in charge—who is the CEO, and who is the founder.

At the end of the day, I decide based on who’s leading the company.

I look at companies that I would use, that my family would use and that I would become a loyal customer for.

The importance of an outstanding leader or founder when investing

Our experience is that great leaders, great CEOs, and great founders will pivot a hundred times until they get the business concept dialed in and scalable.

In contrast, if you have a great business with an ineffective leader or a founder who’s not open to criticism or coaching, they will run it into the ground and ultimately bankrupt the company.

Great ideas are just that, but they really need a great leader, and a great CEO behind them to make them scalable and to turn them into a good investment.

So when you’re thinking about the next investment you’re gonna make, ask yourself these two questions.

1- Are you making the decision based on the jockey or the horse based on the leader or the business?

2- Are you in a position with this business to become its best customer?

If the answer is yes to both of those questions, then you have found a company that’s worthy of your investment.

Are you interested in achieving professional success without sacrificing personal fulfillment?

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  1. Mor Maty Seck on January 18, 2023 at 3:26 pm

    Things like revenue growth, market share are things to look at before investing in a company. But the credit of a good good CEO and founder its fundamentals.

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