Mark Cuban Invests $400K In Company He Doesn't Understand — Because His Daughters Do

This story is part of a new series of features on the subject of success, Benzinga Inspire.

Mark Cuban invested more than $20 million in companies during his time on “Shark Tank,” a show he will be leaving after the upcoming 16th season.

Cuban was known for his quick bids and exits, sometimes offering to buy companies outright for products he believed in. During a 2023 episode in season 14, Cuban broke one of his investing rules for the show.

What Happened: Cuban typically invests in companies offering products he can envision himself using or that might benefit the Dallas Mavericks, the NBA team he partly owns.

However, in a 2023 episode of "Shark Tank," Cuban made an offer for a company whose products he likely won't ever personally use.

In Season 14, Episode 15 of "Shark Tank," which aired in early March, makeup brand Youthforia presented its pitch.

Youthforia, founded in April 2021, had already achieved $2 million in sales before appearing on the show, as reported by CNBC. The brand gained significant traction on TikTok, particularly for its color-changing oil blush that adjusts to match and blend with customers’ skin tones. On TikTok, Youthforia boasts over 130,000 followers and more than three million likes.

The Sharks liked the TikTok success and were also impressed with the company's founder and CEO Fiona Co Chan. 

Kevin O'Leary offered Co Chan $100,000 for 20% of the company along with a $300,000 loan and a cut of distribution pay.

"It's a bet on the jockey on this deal," O'Leary said of Co Chan. "You're really impressive."

Co Chan wanted to hear from the other Sharks, with Cuban and Barbara Corcoran not putting out bids yet. Co Chan tried to lure them in by saying there was a launch of more shades of blush coming, which neither was thrilled about.

"When you have something that's completely differentiated, you ride that, and you don't do anything else, because that just dilutes your efforts," Cuban said. "Sometimes, you shouldn't listen to your customers."

Co Chan turned to O'Leary and offered 5% equity for $400,000 and a 50 cent royalty for each unit sold by the company up to $500,000.

O'Leary countered with an $800,000 offer for 10% equity and a $1 royalty on each unit.

This is when Cuban decided to step in, offering $400,000 for 10% without a royalty and said the reason he was interested in the makeup brand was because his daughters and wife would "understand" the product, which he didn't.

Cuban offered to wear the color-changing blush himself as part of demos.

O'Leary countered with a $400,000 offer for 7.5% and a 75 cent royalty on sales up to $1 million.

Ultimately, Cuban got Co Chan to accept with his final offer of $400,000 for 8% and no royalties, which he offered "just to prove a point" and ended up beating O'Leary.

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Why It's Important: The company and Co Chan drew praise from the Sharks during portions of the pitch and after Cuban's offer was accepted.

Herjavec and Corcoran, who sat out on the offers, said they were impressed with Co Chan's negotiating skills.

"Kevin, you have to get up and leave the ‘Shark Tank,'" Herjavec said. "Fiona's taking your chair."

The offer for Youthforia that was accepted makes the first deal Cuban has ever done with a makeup brand, which could provide several lessons. Cuban has often stuck to his principles in investing in products that he would use himself or the Mavericks would use.

Hearing how much the other Sharks loved the company’s CEO and the product going viral on TikTok, Cuban trusted in his family and made the investment because he could see his daughters and wife using the product. 

Youthforia is available on Amazon.com and also at Ulta Beauty ULTA stores. While we won't likely see the makeup products at Mavericks games in the future, they could end up becoming a staple in the Cuban household.

This article was previously published by Benzinga and has been updated.

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