Mark Cuban is one of the most famous and influential billionaire entrepreneurs.
On ABC’s hit TV show “Shark Tank”, many entrepreneurs and startups hope and dream that he will be attracted to their idea and invest in their project.
His success and his flair for high-potential companies go beyond the simple sphere of financial circles. He is one of the faces of the NBA, almost like the star players. Cuban is the owner of the Dallas Mavericks, an NBA franchise that he completely transformed.
He is a model businessman that many young people want to emulate. His ambition to disrupt the pharmaceutical industry by lowering prices has further increased his notoriety, so much so that the tweets calling him to run for president in 2024 are numerous and recurring.
“I’m down on my investments in the shark tank”
But like many investors, the past few months have been difficult for Cubans. Growth uncertainties following the Federal Reserve’s aggressive rate hike policy and inflation at the highest level in 40 years cloud the horizon, causing worries in the markets.
It is in this context that Cuban has just admitted that he has suffered losses in his portfolio of companies in which he has invested since his participation in Shark Tank. It all started with a tweet containing an article from CNBC.
“Mark Cuban has invested nearly $20 million in 85 startups on ‘Shark Tank,’ and he suffered a net loss on all of those deals combined,” the tweet read, citing CNBC. “I got beat up,” Cuban admitted with a laugh.
Cuban responded to the tweet without trying to hijack the conversation.
“It brings up an interesting discussion,” the 63-year-old entrepreneur tweeted on July 23.
Then he added that: “But that doesn’t include private valuations of operating companies. Which is the majority. I’m not a fan of the ‘mark to market’ games that private equity/equity companies play -risk Should illiquid valuations matter?
Scroll to continue
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 cash metric or what liquidates, the investor explains that the situation is not the same if we take into account the new fundraisings of the portfolio companies. Because the ability of a startup to raise funds from investors on its terms without difficulty increases its valuation.
“If I add the valuations based on the last increase, I’m doing great. But it’s not money in my pocket. Its potential. Raising money hopefully creates more upside “, explained Cuban.
But, he acknowledges that, “however. IMHO [in my humble opinion]if you can’t spend it, it’s not financial gain.”
He concludes by giving the philosophy behind his investments in the Shark Tank show. He explains, for example, that sometimes his investments are motivated by the desire to convey a message or to help someone, not necessarily by the lure of profit.
“And I’m okay with that with my Shark Tank companies. I don’t put on a show to get the best investments,” Cuban said. “And I don’t always invest because I think I’m going to make money. Sometimes my offers are just to help someone or send a message.”
Cuban appeared on 111 episodes of Shark Tank and closed 85 deals for a total investment of $19.85 million, according to sharkalytics. His biggest individual investment was in the company Ten Thirty One Production in which he invested $2 million against a 20% stake.
In general, Cubans have invested an average of $233,529 in exchange for an average participation of 23% in the capital of the companies in question.
You can find the full list of companies in which Cuban, through MCC (Mark Cuban Companies), has invested here. Looking at this list, his investments are very varied: there is for example a tattoo company, a robotics company, non-fungible token (NFT) companies, etc.
Cuban recently found itself caught in the bankruptcy of crypto lender Voyager Digital, with which the Dallas Mavericks had signed a partnership whose mission is to promote cryptocurrencies.