Daymond John, Shark tank

It’s been a while since Daymond John lost his shirt on a business deal, even though he started his first company by giving shirts away. Back when the Fubu founder was just getting his fashion line off the ground, John built brand awareness by having rappers wear Fubu clothing in music videos. Now, as a big-fish investor on ABC’s Shark Tank, John uses everything he’s learned from more than two decades of business building to size up other companies as potential investment opportunities. The fashion mogul from Queens explains how he spotted three of his favorite deals.

–As told to Graham Winfrey

On Shark Tank, we don’t invest in companies. We invest in people. And there are two types: those who have digital literacy and those who don’t. And the ones who have it are the people we tend to invest in. If a person doesn’t have that area of literacy, they have to have a superb product.

I spot winners by looking for somebody who went out and tried a business by him- or herself and maybe failed several times, but still has that determination, that love and that passion for the company. It’s very important to me that somebody has failed. When I started Fubu, I kept running out of money because I was bootstrapping it myself. I didn’t have an idea of where I wanted to go with it. So I look for people who are driven to succeed but are open to several paths.

I also look for people who are problem solvers, so they’re not going to call me nine times with a problem. I invest in people when I believe we have the same common goal; that no matter what, if the company doesn’t work out, we’re going to create something bigger and better in another space. It’s a combination of all those things. You just understand that the person is going to do it with or without you.

A lot of times on Shark Tank when I invest in people, I’m probably learning more from them than they’re learning from me. They’re digital natives and I’m a digital immigrant.

I think of myself as an entrepreneur, but I love investing. People allow me to invest in their dreams, and I don’t have to come up with everything myself. They’re doing business in a whole new way and I’m fortunate enough to be partnering with them. None of these three entrepreneurs are going be stopped. So I want to come along for the ride.