"You're a moron" — When Shark Tank's Mark Cuban admitted taking business loans is a mistake 

Shark Tank investor and entrepreneur Mark Cuban, a prominent entrepreneur and investor, has consistently emphasized self-reliance in business. During a Bloomberg interview on June 14, 2013, he made his stance clear regarding business loans. Cuban stated:

"First of all, if you're starting a business and you take out a loan, you're a moron."

Cuban's stance on business loans remains clear- taking on debt at the beginning of an entrepreneurial journey is unnecessary and adds financial risk. The Shark Tank investor emphasized that businesses should be built on effort, strategic planning, and industry expertise rather than borrowed capital.

His statements reflect his broader belief that success in business depends on preparation and execution rather than external funding sources.

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Shark Tank investor Mark Cuban's take on business loans: A risky move for entrepreneurs

The risk of business loans

Mark Cuban explained why borrowing money to start a business is problematic. He noted that while entrepreneurs focus on building their companies, lenders are only concerned with loan repayment. The Shark Tank investor stated:

"There's so many uncertainties involved with starting a business, yet the one certainty that you'll have to have is paying back your loan."

This, he argued, creates a conflict since financial commitments remain irrespective of whether a business succeeds or fails. Moreover, he added that lenders, such as banks and private investors, are not interested in the business itself. He noted:

"The bank doesn't care about your business or whoever you borrow from, unless it's family, doesn't care about your business."

According to Cuban, taking out a loan does not align with the realities of entrepreneurship, where adaptability and financial flexibility are essential.

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Why capital is not the biggest factor

Cuban rejected the idea that lack of capital is the main reason small businesses fail. The Shark Tank investor argued that most businesses can start with little to no funding. He emphasized:

"99% of small businesses you can start with next to no capital. It's more about effort."

Rather than spending valuable time looking for loans, Cuban emphasized that entrepreneurs should spend time studying their industries and making their strategies finer. He further explained that ventures most commonly crash due to the inadequacy of running and executing strategies rather than funding problems. He opined:

"Small businesses don't fail for lack of capital. They fail for lack of brains, they fail for lack of effort."

Cuban reinforced that persistence, knowledge, and efficient decision-making contribute more to success than initial capital.

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The importance of hard work and industry knowledge

Cuban also addressed the level of effort required to succeed as an entrepreneur. He explained that many people underestimate the demands of running a business. The Shark Tank investor stated:

"Most people just aren't willing to put in the time to work smart."

This, he noted, leads to business failures not because of financial limitations but because of insufficient preparation and execution. He also stressed the importance of thorough industry research. According to him, entrepreneurs must have a deeper understanding of their field than their competitors. He remarked:

"If you start a business, you better know your industry and your company better than anyone in the whole wide world because you're competing."

The Shark Tank investor underscored that competition in business is intense, and only those who put in the necessary work can succeed.

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Watch Shark Tank on ABC every Friday at 8 PM ET, with episodes available for streaming on Hulu.