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Daymond John is the founder of Fubu, a clothing brand he started in his mother's house in 1992 that has now sold over $6 billion worth of products. He has a net worth of around $350 million and has invested close to $9 million in emerging companies as an investor on Shark Tank.
But he wasn't always a millionaire and has admitted to not having financial intelligence in the early days of Fubu when 27 banks rejected him for a loan. That's why John says it's important to build strong financial intelligence early on.
"That's the most important part: the financial intelligence, creating a structure and a business so that when you do want an investment, I can actually invest in you," John told CNN Business. "[If] your receipts are in a shoebox, how am I going to get paid back? Where is my money going?"
Related: These Are the 3 Things That Make Daymond John Want to Give You Money
In 2022, John explained that, when he was starting as an entrepreneur, 27 banks rejected him because he didn't know what he was doing financially. He didn't know what forms to fill out and had no collateral.
"I look back at those times and say, 'How stupid was I?" John said. "Because I didn't have financial intelligence and I think that is something we should be teaching kids in the third grade, not when they get to college... We don't talk about money at all."
Daymond John. Photo by Paras Griffin/Getty Images
Use Other People's Money
John said the "power of broke" can help businesses too, or the idea that they don't have anything to lose, so they'll figure it out no matter what it takes. And he's a big fan of using "other people's money" or what he calls, OPM. The "M" can also stand for other resources, he says.
"It's usually about thinking outside the box and using OPM, which should be other people's money, manufacturing, mindpower, manpower, marketing, and mentorship," he stated.
John said that if he were starting a business today, he would tap into other people's resources first before using his own money.
John told Entrepreneur in an interview last month that he looks for founders to answer three questions before he invests in them: Why me? Why now? And why this?
Related: How Daymond John Went From Selling T-Shirts on the Street to Running a $350 Million Company
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