Mark Cuban’s Worst Shark Tank Investment Revealed

Mark Cuban is famous for making impressive financial moves like buying and then selling the Dallas Mavericks at a significant profit. He even owns an entire town in Texas. However, finance is also a risky business, and not all of his investments have turned out well.

If you’ve never seen the hit TV show “Shark Tank,” Cuban, along with a group of investors known as “sharks,” listens to investment pitches from entrepreneurs for a chance to fund their businesses. The show has been on the air for over a decade, and Cuban says he has invested over $20 million into 85 startups from the show. Despite these investments, he’s experienced a net loss across all the deals combined, as he revealed in a recent podcast interview.

On an episode of the “Full Send Podcast,” Cuban shared that the worst investment he ever made on the show was in a product called “The Breathometer,” pitched as “the world’s first smartphone breathalyzer” by an entrepreneur named Charles Michael Yim in 2013. Yim claimed the device could send Blood Alcohol Content level readings to your phone and give users the option to call a cab if they were too drunk. It sounded like a fantastic invention, especially appealing in places like Texas where DUI incidents are frequent.

All five sharks invested in Yim’s idea, pooling together $1 million for a 30% stake, which valued Yim’s business at $3.3 million. However, just weeks after investing, Cuban checked Yim’s social media and noticed him flying around the world hanging out with celebrities and other billionaires, but not actually working on the “Breathometer.”

Yim claimed he was “networking” on behalf of the business, but Cuban said that before long, all the money was gone. Cuban referred to this as his “biggest beating” in the investment world.

According to a report from CNBC, Yim transitioned away from Breathometer in 2016 to work on another product. However, in 2017, the Federal Trade Commission filed a complaint against Yim and Breathometer, alleging that the company misled consumers about the product.

That same month, Breathometer reached a settlement with the FTC over the complaint, forcing them to refund everyone who had purchased the product. Yim admitted that he didn’t commit to proper testing of the product but denied Cuban’s allegations. He added that the “sharks” might recoup some of their money soon because the company had recently agreed to be acquired.

The story of Cuban and the Breathometer serves as a reminder that even seasoned investors can make mistakes. The world of entrepreneurship and investments is filled with risks and uncertainties, and not every venture turns out to be a profitable one. Cuban’s experience highlights the importance of thorough diligence and the realities of investing.

Despite this setback, Cuban continues to be a significant figure in the investment world, leveraging his experiences, both good and bad, to make informed decisions. His story is a testament to the highs and lows of the investment game.

The tale of the Breathometer also underscores a critical lesson for aspiring entrepreneurs: the importance of delivering on promises and being transparent with your stakeholders. Yim’s failure to properly develop and test the product not only led to financial loss for his investors but also a damaged reputation.

As Cuban’s experience shows, the investment world is fraught with risks, but those who learn from their failures can often find paths to new opportunities. The challenges faced by Cuban and Yim provide valuable insights for both investors and entrepreneurs, emphasizing the need for innovation, integrity, and perseverance.

Source: CNBC