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Mark Cuban is one of the most famous and influential billionaire entrepreneurs.
In the popular ABC TV show Shark Tank, many entrepreneurs and startups hope and dream that he will be interested in their idea and invest in their project.
His success and sense of business with great potential goes beyond the simple realm of financial circles. He is one of the faces of the NBA, much like the star players. Cuban is the owner of the Dallas Mavericks, an NBA franchise that he completely transformed.
He is an exemplary businessman who many young people want to emulate. His drive to destroy the pharmaceutical industry by lowering prices has further increased his notoriety such that tweets urging him to run for president in 2024 are numerous and repetitive.
“I’m disappointed in my investment in a shark tank”
But like many investors, the past few months have been tough for Cuban. Growth uncertainty following the Fed’s policy of aggressively raising rates and inflation to its highest level in 40 years is clouding the horizon, making markets nervous.
It is in this context that Cuban has just admitted that he has suffered losses in his portfolio of companies he has invested in since his involvement with Shark Tank. It all started with a tweet with a CNBC article.
“Mark Cuban has invested almost $20 million in 85 start-ups on Shark Tank, and he made a net loss on all of those deals combined,” the CNBC tweet read. “I got beat up,” Cuban admitted with a laugh.
Cuban replied to the tweet without trying to intercept the conversation.
“Creates an interesting discussion,” the 63-year-old entrepreneur tweeted on July 23. “In terms of money, I lose my investment in shark tanks,” he admitted, without specifying how much his losses are.
He then added, “But this does not include private valuations of operating companies. And most of them are. I’m not a fan of games played by PE/VC firms with “market value”. Should illiquid valuations be taken into account?”
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Cuban was referring to private equity, or PE, and venture capital, or VC.
“To help someone or send a message”
If he admits that he is at a loss, if we stick to the monetary metric or what is being liquidated, the investor explains that the situation is not the same when new fundraisings of his wallet companies are taken into account. Because the ability of a startup to easily raise funds from investors on its own terms increases its value.
“If I add grades based on my last promotion, I’m fine. But it’s not money in my pocket. This is potential. I hope that raising money will create more upside potential,” Cuban said.
But, he admits it, “however. IMHO [in my humble opinion]if you can’t spend it, it’s not a financial gain.”
He concludes by laying out the philosophy behind his investment in the Shark Tank show. He explains, for example, that sometimes his investments are motivated by the desire to send a message or help someone, and not necessarily the lure of profit.
“And I feel good about my Shark Tank companies. I’m not doing the show to get the best investment,” Cuban said. “And I don’t always invest because I think I’ll make money. Sometimes my deals are purely to help someone or send a message.”
According to Sharkalytics, Cuban has appeared in 111 episodes of Shark Tank and closed 85 deals for a total of $19.85 million. His largest individual investment was in Ten Thirty One Production, in which he invested $2 million against a 20% stake.
Overall, Kubin invested an average of $233,529 in exchange for an average equity stake of 23% in the companies in question.
You can find the full list of companies Cuban has invested in through MCC (Mark Cuban Companies) here. Given this list, his investments are very diverse: there are, for example, a tattoo firm, a robotics company, companies using non-fungible tokens (NFT), etc.
Cuban recently found itself in bankruptcy of crypto lender Voyager Digital, with whom the Dallas Mavericks signed a partnership agreement to promote cryptocurrencies.
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