Mark Cuban Hints That This One Mistake Has Killed Too Many Shark Tank Deals: 'Thought They Were Profitable And They Weren't'

Billionaire entrepreneur Mark Cuban has sounded the alarm on a financial blind spot that he says has quietly derailed more "Shark Tank" deals than most entrepreneurs realize.

What Happened: Speaking at SXSW on Tuesday, Cuban shared a hard-earned lesson from years of vetting companies on the hit show: many small business owners think they're profitable — but when the numbers are scrutinized, they're not.

"I can’t tell you how many times we’ve looked under the hood of a business that thought they were profitable, and they weren't," Cuban said. 

"They thought their margins were enough to cover their costs, and they didn't," Cuban said, hinting at several deals that unraveled in due diligence.

He stated that many entrepreneurs get caught up in the excitement of selling or building a brand and ignore the financial foundations.

See Also: Mark Cuban Predicts The World’s First Trillionaire Won’t Be Elon Musk – It’ll Be Whoever Can Master Ai ‘In Ways We Never Thought Of’

"You're all fired up about what it is you have to do," he added, but knowing about the accounting and everything else is more important because if entrepreneurs don't know that that's calling for trouble.

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Why It's Important: According to the U.S. Bureau of Labor Statistics, about 50% of small businesses fail within the first five years — and poor financial management is often a leading cause.

Cuban's warning highlights a common but critical misstep: failing to track unit economics, profit margins, and cash flow in real time. It's not just a Shark Tank issue — it's a small business epidemic.

Cuban himself started earning money at a young age by selling garbage bags door-to-door when he was 12. A few years later, he made money by selling stamps and coins. During his university years, Mark took on multiple ventures, including working as a bartender, teaching disco lessons, and participating in chain letter schemes.

Today, he has a net worth of $7.69 billion, according to the Bloomberg Billionaires Index.

In 2022, Cuban discussed the financial setbacks he’s faced on Shark Tank," despite pouring nearly $20 million into various startups. During his appearance on the Full Send Podcast, the billionaire said that his investments haven’t turned a profit.

One of his biggest losses was Breathometer, a smartphone Breathalyzer startup he called his worst investment. The company secured backing from all five sharks, including Cuban, Lori Greiner, and Kevin O'Leary, making it one of the show's most notable deals.

Image via Shutterstock

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.