Mark Cuban Says Most Entrepreneurs Make The Same Critical Mistake When Starting A Business

Billionaire entrepreneur Mark Cuban is well known for investing in cash-hungry startups on the popular television show “Shark Tank.” Interestingly enough, if you really want to make the “big bucks,” Cuban says you shouldn’t be raising capital for your business. 

Instead, you should be trying to launch a business “with as little money as possible,” Cuban said at the 2023 SXSW Conference, per CNBC.

Cuban’s Advice: Although Cuban spends a lot of time investing in startups, he doesn’t recommend that entrepreneurs take on investors if they really want to make the “big bucks.”

“The more of your equity that you can retain and control, the more the upside,” Cuban said.

The thing that people forget is that when you raise money from someone, that person expects a return, he said, adding you are actually better off using your own personal savings and letting that money take you as far as you can.

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There are plenty of examples of people who have sold companies for billions of dollars, but didn’t end up with nearly as much profit as you would think, Cuban said: “They own 2% of the company, when it was all said and done.”

Fresh out of college, Cuban founded software consulting business MicroSolutions. He sold the company for $6 million by the time he turned 32, pocketing around $2 million in profit.

A few years later, he bought a small audio network startup and turned it into Broadcast.com, which he went on to sell to Yahoo! for $5.7 billion.

“If you look at people with a B next to their name, it's because they own all that equity in their company,” Cuban said.

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Some elements of this story were previously reported by Benzinga and it has been updated.

Photo: courtesy of ABC.