Kevin O’Leary, aka Mr. Wonderful, has made a lot of bets over the years. He is best known for his appearance on Shark Tank where he invests in many startups. While his Shark Tank deals are well known because they take place in front of millions on live TV, his other startup investments are typically more private and not as easy to follow.
O’Leary has invested roughly $8.5 million in startup enterprises since Shark Tank debuted in 2009. However, one of his largest startup bets right now might be worth over five times that amount.
While O’Leary has undoubtedly been a controversial figure as of late, he has also chosen some big winners. For example, in 2018, O’Leary sold one of his Shark Tank investments, Groovebook, to Shutterfly for $14.5 million. O’Leary also saw a big payday with his 2013 investment in Wicked Good Cupcakes. Wicked Good Cupcakes was recently sold to Hickory Farms in 2021.
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Some of O’Leary’s other notable Shark Tank exits include Basepaws, which was acquired by Zoetis, and Talbott Teas, which was acquired by Jamba Juice.
So, what is this $50 million bet? The startup is StartEngine, and Kevin O’Leary owns 1,997,374 shares in the company, collectively valued at over $49.9 million.
The investment is fitting for O’Leary because StartEngine helps everyday people invest in startups. StartEngine is currently the leading equity crowdfunding platform in the U.S., but it's likely most people haven’t heard of it because equity crowdfunding has only been legal since 2016.
Equity crowdfunding was created by the Jumpstart Our Business Startups (“JOBS”) Act of 2015, signed into law by President Barack Obama, that allowed anyone the opportunity to invest in startups. O’Leary came on as a paid spokesperson and advisor to StartEngine, accumulating a large position over the years.
While the equity crowdfunding market is still relatively small compared to the overall stock market and venture capital markets, it’s been growing fast. In 2020, the U.S. equity crowdfunding market raised $214 million. In 2021, that number doubled to $502 million.
While the equity crowdfunding market has slowed in 2022, it’s not as dire as you might think. StartEngine recently acquired rival equity crowdfunding platform, SeedInvest, and they aren’t stopping there.
Potentially even more exciting is that anyone can invest alongside Mr. Wonderful in StartEngine through StartEngine’s equity crowdfunding campaign.
StartEngine is not listed on the stock market yet. Your investments within it are illiquid, meaning that you typically can’t sell until a startup is acquired or listed on the stock market. This factor could mean you will have to hold for years before you can sell. Startup investing is high risk but potentially high reward, so you shouldn’t invest more than you can afford to lose.
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