Mark Cuban is one of the most famous and influential billionaire entrepreneurs.
On the hit 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 financial circles. 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 the tweets calling him to run for president in 2024 are numerous and recurrent.
'I'm Down on My Shark Tank Investments'
But like many investors, the past few months have been tough for Cuban. Uncertainties over growth following the Federal Reserve's policy of aggressively raising rates and inflation at the highest level in 40 years cloud the horizon, causing jitters 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 featuring an article from CNBC.
"Mark Cuban has invested nearly $20 million in 85 startups on 'Shark Tank,' and he’s taken a net loss across all of those deals combined," the tweet says, quoting CNBC. "I’ve gotten 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?"
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 the situation is not the same if we take into account the new fundraisings of the companies of his wallet. 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 raise, I'm doing great. But that's not money in my pocket. Its potential. Raising money hopefully creates more upside," Cuban argued.
But, he acknowledges that, "however. IMHO [in my humble opinion], if you can't spend it, its not a 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 send a message or to help someone, not necessarily by the lure of gain.
"And I'm good with 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'll 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 biggest individual investment was in the company Ten Thirty One Production in which he invested $2 million against a 20% equity stake.
In general, Cuban has invested an average of $233,529 in exchange of an average participation of 23% in the capital of the companies in question.
You can find the complete list of companies in which Cuban, through MCC (Mark Cuban Companies), has invested here. In view of this list, his investments are very varied: there is for example a tattoo firm, a robotics company, non-fungible tokens (NFTs) companies, etc.
Cuban recently found himself caught 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 promote cryptocurrencies.