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Daymond John of 'Shark Tank' on the No. 1 Thing Entrepreneurs Need

The 'Shark Tank' star explains what Martin Luther King Jr.'s legacy can teach entrepreneurs and stresses the importance of financial mentorship.
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Daymond John thinks the entrepreneurship community has a knowledge deficit.

While good business ideas are plentiful, many entrepreneurs struggle to understand payroll taxes, health care and other thorny issues, says John, the founder of apparel brand FUBU and one of the star investors on ABC's startup pitch show Shark Tank. In other words, they don't have the financial literacy to scale their businesses and attract investors.

What they need, says John, are mentors -- trusted advisors who have been there and done that, and can guide the new entrepreneurs through their next phase of growth. "Mentors, by far, are the most important aspects of businesses," he says.

That was part of his message at the Kingonomics Innovation, Entrepreneurship and Investment Conference in Washington, D.C. last Friday. Organized by Rodney Sampson, Shark Tank's head of diversity and inclusion, the conference marked the 50th anniversary this month of a historic civil-rights march led by Martin Luther King Jr. Sampson's book, Kingonomics (BenBella Books, 2012), attempts to show business owners how they can benefit from Martin Luther King's economic vision.

Related: Shark Tank's Daymond John on Lessons From His Worst Mistakes

One of King's primary messages -- that of "access to capital for all" -- has gotten lost in the decades since he delivered his "I Have a Dream" speech in front of the Lincoln Memorial, John says. "Rodney [Sampson] is tapping back into that main message."

While the need for mentorship is universal, John says minority communities are especially hungry for the sort of financial education that will help them steer clear of bad financial decisions, such as giving up too much equity too early and at too low a price. To help new and aspiring entrepreneurs get access to capital, John founded the Daymond John Academy, a three-day course taught by a team of coaches who travel around the United States.

John admits that as a young entrepreneur he was fortunate to find strategic partners who believed in him and taught him what he needed to know, he says. When he started his clothing brand, FUBU, he didn't have the first idea about how to prepare his business to accept institutional funding.

"I was so busy just trying to sell stuff that I didn't have a structure to even take in capital or be able to report quarterly to people," John says. "You will be [passed] over if you don't have that, no matter how good your company is."

To find a good advisor, entrepreneurs should look close to home, says John. "Mentors don't have to be the Daymond Johns or the Mark Cubans," he says. "A person running a successful bodega or a tax firm in your community for the last 20 years, that person is working just as much as the individual who's running General Mills."

Related: How to Successfully Turn (Almost) Anyone Into Your Mentor