"I’ve gotten beat": Shark Tank’s Mark Cuban on realities of startup investing and failures

Mark Cuban, a billionaire entrepreneur and prominent Shark Tank investor, recently admitted that despite his wealth and business acumen, he has faced significant setbacks in his role on the hit reality show.

In an interview on the Full Send Podcast in July 2022, Cuban revealed the harsh realities of startup investing, acknowledging that even the most experienced investors, like himself, can face financial losses.

"Am I up financially? Oh no, I've gotten beat...My biggest loss was probably a million dollars." Cuban said.

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Shark Tank’s Mark Cuban's success and setbacks on investment startups

Mark Cuban is popularly known as an entrepreneurial success and a portfolio investor in several sectors: technology, sports, and entertainment. He was brought into the public limelight when he sold his company, Broadcast.com, to Yahoo for $5.7 billion in 1999. This deal established him as one of the most influential and financially successful businesspeople. For years, Cuban continued diversifying his portfolio with various investments across sectors.

Since joining Shark Tank in 2011, Cuban has been one of the most active investors on the show. According to data from the fan-run website Sharkalytics, he has committed to over $20 million in investments across 85 companies over 111 episodes.

Mark Cuban answers questions as part of the Harris-Walz campaign in Georgia (Image via Getty)

However, his website Mark Cuban Companies (MCC) lists only 54 of these investments, reflecting the attrition rate among startups, with many no longer in operation. Cuban’s experience illustrates a stark reality: even with significant resources and expertise, success in startup investing is far from guaranteed.

However, Cuban's recent comments about the financial outcome of his Shark Tank investments show that success in the public eye does not always translate into profitability. Although Cuban has become an iconic figure for aspiring entrepreneurs, the reality of venture investing often involves high risk and many failures.

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One of Cuban's failed investment startups

One of the most notable examples of Cuban’s investment setbacks on Shark Tank is his involvement in Breathometer, a company that aimed to create a portable breathalyzer connected to a smartphone. The product appeared to be an innovative solution for individuals wanting to test their blood alcohol levels before making decisions about driving.

Cuban, along with other Shark Tank investors, backed the company after the pitch, convinced by the product’s potential in a growing market.

However, despite the initial enthusiasm, Breathometer ultimately failed to live up to expectations. Cuban later explained that the company's founder, Charles Michael Yim, was more focused on socializing and partying than on building the business.

Cuban noted that he had tried to reach out to Yim, urging him to concentrate on product development, but the response was not as productive as hoped. In the podcast he shared,

"It was a great idea...actually a decent product, but the guy, he'd be in bora bora...two weeks later and he'd be in vegas partying...next thing you know all the money's gone and the company..."

Breathometer CEO Charles Michael Yim (Image via Facebook/@charlesmyim)

In addition to internal mismanagement, Breathometer faced regulatory issues. In 2017, the Federal Trade Commission (FTC) issued a settlement with the company after finding that the product’s blood alcohol level readings were often inaccurate. This was a significant blow to the company, as the product had been marketed as a reliable tool for determining whether someone was sober enough to drive.

The FTC settlement resulted in refunds to customers who had purchased the product between 2013 and 2015. This failure in both business management and product reliability ultimately led to the company's collapse, and the founder later pivoted to a new venture focused on oral health and hydration.

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