Having trouble selling stock
in your company?

If you’re having trouble selling stock (or a deal that promises stock like convertible note or SAFE) in your company…

Your problem may not be you or the investors; it may be that your chances of a profitable exit (sale of the company) in the next few years is low. Investors who buy stock have many options for huge returns in the future from high-flyers. If your company is basically a steady generator of cash from sales, but not a high-flyer, there is another option.

Are you aware there is a class of investors who prefer steady reliable cash rather than a big (but risky) return years from now. These investors have a lower risk tolerance than stock-buyers. But they’re out there; they’re waiting for you. Let me prove it to you.

Shark tank asks for a business plan Kevin O’Leary, known as “Mr. Wonderful” on ABC’s The Shark Tank, is a Canadian businessman, investor, and television personality with a net worth of approximately $400 million. His nickname, coined sarcastically by co-star Barbara Corcoran in Season 1, reflects his blunt, often harsh demeanor, which he uses to test entrepreneurs’ resilience.

O’Leary’s investment strategy on Shark Tank prioritizes low-risk, cash-flowing deals with predictable returns, shaped by his experience selling his educational software company, SoftKey, for $4.2 billion in 1999. Below are the key aspects of his investment preferences:

Royalty Deals Over Equity

O’Leary is renowned for favoring royalty deals, where he loans money in exchange for a percentage of future revenue rather than taking equity in the company. This approach minimizes his risk by ensuring returns regardless of the company’s long-term success or exit potential. He often seeks royalties on consumer packaged goods (CPG) or single-product companies with limited exit prospects, as these deals provide immediate cash flow.
For example, he might offer $300,000 for $5 per unit sold until he recoups $1 million, plus a small equity stake. Entrepreneurs often resist these deals due to margin pressure, but O’Leary sees them as low-risk and high-reward for himself.
He justifies royalties by noting that Shark Tank exposure drives a surge in orders, allowing him to recoup investments quickly.
This strategy aligns with his dividend-focused investing philosophy, where he prioritizes steady income over speculative growth.

Low-Risk, High-Dividend-Yielding Investments

O’Leary avoids investing based solely on liking a product, focusing instead on financial metrics like low volatility,
high margins, and consistent cash flow.

Preference for Women-Led Businesses

O’Leary has stated that 85% of his Shark Tank returns come from companies led by women,
citing their risk mitigation, realistic goal-setting, and multitasking abilities.
This bias has led him to invest heavily in female entrepreneurs across various industries.

Examples of Investment Outcomes

O’Leary has invested over $8.5 million across 40 companies in 131 episodes, with deal sizes ranging from $35,000 (PaperBox Pilots) to $2.5 million (Zipz Wine).

Conclusion

Kevin O’Leary, as Mr. Wonderful, is a disciplined, cash-flow-focused investor who prioritizes royalty deals, women-led businesses, and recession-proof sectors. For entrepreneurs, securing his investment means gaining not just capital but also a rigorous mentor who demands financial discipline.

With Mr. Wonderful leading the way, there are many such investors just waiting for you and your company.

How to Make Revenue Royalties Work for You

If you have a good profit margin, what if you were to offer people
a small percentage of your top line sales as a “revenue royalty?”

You’re not selling shares in your company.
You’re not offering any management control or board participation.

There doesn’t even have to be a board or even a corporation.
Profitability and valuation have no effect on their return.

It’s simple, for whatever your sales are for the month, they get a small percentage.

It could be a 10th of a percent.
It could be 10%. Or anything in between.

Either way, no matter what you do otherwise, there’s just ONE number that matters.
Sales. And they get a piece of just that.

What You Get

Of course you get their cash…

I’m sure they’ll get behind all the marketing you can do because
that increases the top line that they get paid a percentage on – the top line.

They may also do whatever they can to promote your business.
Win win?!? Yes.

Revenue Royalty Terms

You can even adjust the amount of time that the revenue royalty lasts.

In fact you might offer, “I’ll pay you with revenue royalties at a rate of 5% of monthly sales until 100% of
your investment is paid back, then from there until double your money, you get 3% of sales,
and from then on you get 1% of all of top line sales for say 10 more years.”

We can help.

Rob Kramarz is a managing partner of Shepherd Ventures III, a venture capital fund whose claim to fame is investing in the founders primarily.
See https://sv3.vc .

He is also founder of Intelliversity – an accelerator that shows entrepreneurs how to create trust with investors. See https://intelliversity.org .

Through these services, he discovered that the majority of businesses that seek funding can’t get it because investors don’t trust that there will be an exit, a liquidity event such as an acquisition.

So he studied under Wall Street veteran Arthur Lipper to master the art of selling revenue royalties to investors, so that no liquidity event is necessary.

Burke Franklin is the originator of the first business planning software called BizPlanBuilder® the Creator and CEO of Business Power Tools, a secure, collaborative online platform loaded with self-guided, customizable software-driven document & spreadsheet templates.

It’s deal for growth-minded entrepreneurs, business owners, and advisors who need proven, ready-to-use documents and financial models to raise capital, systematize operations, implement policies & procedures, or stage their business for sale, especially to present a professional, believable business plan to investors, lenders, or buyers.

It’s more practical today than ever. You’ll become addicted to the clarity and congruency throughout your entire business. More about Burke here.

Burke Franklin inventor of business plan software template BizPlanBuilder

You Can Do This, We Can Help

Between us, we can work together to design, engineer and finalize a revenue royalty plan that you can use quickly and put the fun back in funding.

What you need is to calculate the exact percentages, a standardized legally-approved contract for investors, and an executive summary describing the terms.

Let’s set up your Revenue Royalty investment program
with our Revenue Royalty Toolbox & Training.
You’ll get everything you need to get started including: