Mark Cuban is one of the most famous and influential billionaire entrepreneurs.
On the popular TV show “Shark Tank” on ABC, many entrepreneurs and startups hope and dream that he will be attracted to their idea and invest in their project.
His success and his nose for businesses with great potential transcend the simple sphere of the financial circle. He is one of the faces of the NBA, almost in the same way as the star players. Cuban is the owner of the Dallas Mavericks, an NBA franchise he completely transformed.
He is a model businessman that many young people want to emulate. His ambition to disrupt the pharmaceutical industry by cutting prices has further increased his notoriety, so that tweets calling for him to run for president in 2024 are numerous and recurring.
“I̵[ads1]7;m down on my Shark Tank investments”
But like many investors, the past few months have been tough for Cuban. Uncertainty about growth resulting from the Federal Reserve’s policy of aggressively raising interest rates and inflation at its highest level in 40 years is clouding the horizon, causing unease in the markets.
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 participating in Shark Tank. It all started with a tweet with an article from CNBC.
“Mark Cuban has invested nearly $20 million in 85 startups on ‘Shark Tank,’ and he has taken a net loss across all of those deals combined,” the tweet said, citing CNBC. “I’ve been beat,” Cuban admitted with a laugh.
Cuban responded to the tweet without trying to hijack the conversation.
“Brings up an interesting discussion,” the entrepreneur, 63, commented on Twitter on July 23. “On a cash basis, I’m down on my shark tank investments,” he admitted, without saying how much his losses amount to.
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 PE/VC firms play. Should illiquid valuations count?”
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 calculation or what liquidates, the investor explains that the situation is not the same if we take into account the new collections of the companies in his wallet. Because a startup’s ability to raise funds from investors on its terms without difficulty increases its valuation.
“If I add the valuations based on the last raise, I’m doing well. But it’s not money in the pocket. It’s potential. Raising money hopefully creates more upside,” Cuban argued.
But he acknowledges that “but. IMHO [in my humble opinion]if you can’t use it, it’s not a financial gain.”
He concludes by giving the philosophy behind his investments on the Shark Tank show. For example, he explains that sometimes his investments are motivated by the desire to send a message or help someone, not necessarily by profit.
“And I’m good about that with my Shark Tank companies. I don’t do the 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 deals are purely to help someone or send a message.”
Cuban has been on 111 episodes of Shark Tank and closed 85 deals for a total investment of $19.85 million, according to sharkalytics. His largest individual investment was in the company Ten Thirty One Production, where he invested $2 million for a 20% stake.
In general, Cuban has 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 complete list of companies that Cuban through MCC (Mark Cuban Companies) has invested in here. Considering this list, his investments are very varied: there is, for example, a tattoo company, a robotics company, non-fungible tokens (NFTs) companies, etc.
Cuban recently found himself caught up in the bankruptcy of the crypto lender Voyager Digital with which the Dallas Mavericks had signed a partnership, one of the missions of which is to market cryptocurrencies.