Over greater than a decade on ABC’s “Shark Tank,” billionaire Mark Cuban has seen his share of excellent investments — and dangerous ones.
Final week, Cuban instructed the “Full Ship” podcast that after investing practically $20 million in 85 startups on “Shark Tank,” he is taken a web loss throughout all of these offers mixed. “I’ve gotten beat,” Cuban admitted with fun, earlier than happening to share the worst funding deal he is ever made on the TV present: the Breathometer.
In 2013, an entrepreneur named Charles Michael Yim went on “Shark Tank” to pitch his product, the Breathometer, as “the world’s first smartphone breathalyzer.” Yim wowed Cuban and the opposite Sharks by displaying off a smartphone attachment that he claimed might precisely measure blood alcohol content material (BAC).
Yim’s gave the Sharks glasses of champagne, after which had them blow right into a small, plastic gadget that would connect to a smartphone. Yim claimed the gadget might ship BAC degree readings to your telephone, and gave you the choice of calling a cab with the contact of a button in case your BAC degree was too excessive.
The pitch was compelling, and Yim grew to become the primary “Shark Tank” entrepreneur to tug in all 5 Sharks right into a joint funding. Cuban, Kevin O’Leary, Daymond John, Lori Greiner and Robert Herjavec pooled collectively a $1 million funding for a 30% stake, which valued Yim’s firm at $3.3 million.
“It was a terrific product,” Cuban mentioned final week. “However, the man – Charles – I might take a look at his Instagram and he’d be in Bora Bora … Two weeks later, he’d been in [Las] Vegas partying, after which he’d be on Necker Island with Richard Branson.”
“I might textual content him, like ‘What the f— are you doing? You are speculated to be working,'” Cuban mentioned. In keeping with Cuban’s recollection, Yim would reply that he was “networking” on behalf of the enterprise.
Cuban mentioned the excuse did not fairly maintain up: “Subsequent factor you recognize, the entire cash’s gone.”
By 2016, Yim was transitioning away from the Breathometer, partnering with well being care large Philips on a product known as Mint that measured ranges of sulfur compounds in your mouth to find out whether or not or not you had dangerous breath.
In January 2017, the Federal Commerce Fee filed a criticism towards Yim and Breathometer, alleging that the corporate misled its clients in regards to the product’s means to precisely measure BAC. In keeping with the FTC, Breathometer “lacked scientific proof to again up their promoting claims.”
That very same month, Breathometer reached a settlement with the FTC over that criticism, forcing the corporate to inform and totally refund each buyer who’d purchased a tool. In keeping with the FTC, the corporate by no means carried out enough testing regardless of claiming that its merchandise have been backed by “government-lab grade testing.”
“That was my largest beating,” Cuban mentioned.
In the meantime, Cuban additionally reached out to CNBC Make It to make clear his feedback about his total investing observe file on “Shark Tank,” noting that his web loss thus far is just “on a money foundation” and doesn’t account for the truth that he isn’t but exited a lot of these investments.
“I have never gotten out greater than I’ve put in,” he mentioned in an e-mail. “However that does not account for all the continued, working companies and their valuations.”
In response to Cuban’s allegations, Yim tells CNBC Make It that the “feedback have been fully off [base],” and that he did not blow his firm’s cash on private journey. He additionally says it is “not honest” that Cuban would base his evaluation of Yim’s CEO talents on a collection of social media posts, and notes that his journey to Necker Island was to pitch the Breathometer to Richard Branson. The pitch was profitable, and Yim grew to become a 2015 finalist in Branson’s Excessive Tech Problem pitch competitors.
“You’ll be able to’t take a look at somebody’s social media and take it for face worth,” Yim says. “That is not how social media works.”
Yim acknowledges not committing to correct testing for a few of his merchandise, and says that lack of rigor contributed extra to derailing his firm’s progress than his journey schedule. At present, neither the Breathometer or Mint merchandise can be found for buy on the corporate’s web site.
The founder notes that Cuban took the lion’s share of the funding, accounting for $500,000 of the full $1 million. He says the Sharks would possibly lastly recoup some worth from their funding, as a result of the corporate lately agreed to be acquired. Particulars for such a deal don’t but look like public.
UPDATE: This text has been up to date with an extra remark from Mark Cuban on his “Shark Tank” investments.
Disclosure: CNBC owns the unique off-network cable rights to “Shark Tank.”
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