Tech mogul and Dallas Mavericks owner Mark Cuban is an investor featured on the hit TV show "Shark Tank."
The self-made billionaire has been displaying his business savvy since he made his fortune by starting Broadcom Inc. and building it into a company he sold for several billion dollars. He used a part of that fortune to purchase the Dallas Mavericks NBA franchise, where he became a household name because of his all-out love for the club.
Eventually, he parlayed that fame into a position on "Shark Tank," the ABC show where budding entrepreneurs pitch their opportunities to a panel of several successful business people in hopes of making a partnership that will help them strike it rich. Cuban's background in technology might lead you to believe he only invests in the tech sector, but he has invested in many different entities. How well is Cuban doing with his investments?
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The Tale Of The Tape
According to Sharkalytics, a data site that tracks the investments made on "Shark Tank," Cuban invested a total of $19.85 million on 85 deals in his 111 appearances on the show. His average investment amount is $235,000, and his largest single investment was $2 million for a 20% share in a live-action company that does productions for horror movies. His investments represent a buy rate of 19% of the 443 investor pitches he has listened to.
Of Cuban's 85 deals, 43 have been in partnership with other sharks, and fellow tech mogul Robert Herjavec is his most frequent co-investor. Another 31 deals have been nonstandard, which means they were not strictly cash for equity. These deals have varying terms, including letters of credit from Cuban, royalties on future sales and other contingencies.
The opaque nature of many of the deals, combined with the fact that they have not all reached maturity makes it somewhat difficult to assess how much total money Cuban has made. But in a recent talk show appearance, Cuban spilled the beans on which deal has netted him the most profit and biggest single return.
The Home Run
In episode 16 of season five, entrepreneur Bruno Francois pitched the sharks on Cycloramic. The company's product was an app that allowed cell phones and tablets to take high-quality 360-degree panoramic photos without using a tripod. The app used the phone's vibrate functions to generate the necessary movement. Cuban invested $250,000 in the company.
Although the investment eventually proved to be successful, it was not without a tremendous amount of work. Cycloramic would eventually repurpose the app from one designed to take great selfies, to one that was used to photograph cars. This required a nearly top-to-bottom restructuring of the company. By the time the restructuring was completed, Cuban and Francois sold it for $22 million.
The Agony And Ecstasy Of Startup Investing
Cuban's experience illustrates the ups and downs of startup investing. Although it's possible — if not probable — that he has made more money on other "Shark Tank" offerings, one $250,000 investment netted Cuban a profit on the $19.85 million that he has invested since joining the program. That is all part and parcel of why startup investing is such an incredible sector.
In years past, the only people who could get involved in startup investing were successful exit founders like Cuban, well-connected venture capitalists or fund managers. Now, regular investors like you can get in on the action. Equity crowdfunding platforms like StartEngine and Wefunder have offerings from hundreds of startups looking to trade future equity for investor capital.
You can choose from a variety of investment sectors and buy into many deals for contributions as low as $100. Every deal won't make money, and many of the startups you invest in may go belly-up. But as Cuban has shown, it only takes one home run to make all the strikeouts worth it.
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