Shark Tank’s Barbara Corcoran invests in all kinds of startups, but there’s a certain kind of founder she won’t back.
The real estate mogul turned venture capitalist has built her reputation on spotting diamond-in-the-rough entrepreneurs, and her investment philosophy reveals a striking preference for founders who’ve clawed their way up from the bottom. In an interview, Corcoran explained why she actively avoids investing in entrepreneurs from privileged backgrounds, offering a candid assessment that challenges conventional wisdom about what makes a successful founder.
“I don’t invest in rich kids,” Corcoran stated bluntly. “Rich kids come in with a couple of disadvantages. I feel they’ve had the right jobs because they had the right contacts, so they had the right apprenticeships in different companies in their summer months when they’re teenagers. They get the right introductions.”
According to Corcoran, this privileged pathway creates a fundamental disconnect from the scrappy reality of building a business. “Poor kids are usually waiting tables and scrapping, dealing with customers, spilling coffee and getting shouted at,” she explained. The contrast, she argues, shapes entirely different skill sets and mindsets.
The Shark Tank investor particularly takes issue with the educational advantages that wealthy founders often possess. “Rich kids, when starting businesses on Shark Tank, the ones I see typically have gone to the finest schools, and what comes with going to the finest schools, especially business schools, what comes is a certain attitude that they know it. That’s a dangerous attribute to have in anything when you’re starting out.”
Corcoran draws a sharp distinction between theoretical knowledge and practical experience: “What they do know is they know all about business as an observer, but they don’t know business as a player. Whereas poor kids tend to have had hardship. They’ve had to be a player earlier, they’ve had to contribute to the family. They’ve seen their parents struggle. They know the power of a buck. They’ve never gone on a fancy vacation, so they aspire to the vacation.”
Her most revealing insight comes when discussing what she calls the “injured poor kid” – entrepreneurs driven by a chip on their shoulder. “An injured poor kid is, for me, a guarantee that I’m gonna make money if he’s got the ego to prove somebody else wrong,” she said.
Corcoran’s investment philosophy reflects a broader debate in the venture capital world about privilege, hunger, and entrepreneurial success. Her preference for scrappy underdogs aligns with research showing that founders from working-class backgrounds often demonstrate greater resilience and resourcefulness – qualities essential for navigating the inevitable challenges of building a company. However, her approach also highlights the complex dynamics of access and opportunity in entrepreneurship, where family wealth can provide crucial early-stage funding and networks, even if it might dull the edge that comes from necessity-driven innovation.
In an industry where pedigree and connections often open doors, Corcoran’s contrarian approach suggests that the most valuable entrepreneurial trait might not be privilege, but the burning desire to escape its absence.