In more than a decade on ABC’s “Shark Tank,” billionaire Mark Cuban has seen his share of good investments and bad.
Last week, Cuban told the “Full Send” podcast that after investing nearly $20 million in 85 startups on “Shark Tank,” he has taken a net loss on all of those deals combined. He tells CNBC Make It that the loss is only “in cash” so far, ignoring the fact that he hasn’t gotten out of many of these investments yet: “I haven’t gotten out more than I But that doesn’t account for all the businesses in operation and their valuations”.
On the podcast, Cuban shared the worst investment deal he’s ever made on the TV show: 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 surprised Cuban and the other Sharks by showing off a smartphone attachment that he said could accurately measure blood alcohol content (BAC).
Yim’s gave the Sharks glasses of champagne and then had them blow into a small plastic device that could be connected to a smartphone. Yim claimed the device could send BAC level readings to your phone and gave you the option to call a cab at the touch of a button if your BAC level was too high.
The pitch was convincing, and Yim became the first “Shark Tank” entrepreneur to bring all five sharks into a joint investment. Cuban, Kevin O’Leary, Daymond John, Lori Greiner and Robert Herjavec put together a $1 million investment for a 30% stake, valuing Yim’s company at $3.3 million.
“It was a great product,” Cuban said last week. “But the guy, Charles, would look at his Instagram and he’d be in Bora Bora… Two weeks later, he’d been in [Las] Party in Las Vegas, and then I’d be on Necker Island with Richard Branson.”
“I would text him, like ‘What the hell are you doing? You’re supposed to be working,'” Cuban said. According to Cuban’s recollection, Yim would reply that he was “plugging in” on behalf of the company.
Cuban said the excuse didn’t quite hold up: “The next thing you know, all the money is gone.”
In 2016, Yim moved away from the Breathometer, partnering with healthcare giant Philips on a product called Mint that measured levels of sulfur compounds in the mouth to determine whether or not you had bad breath.
In January 2017, the Federal Trade Commission filed a complaint against Yim and Breathometer, alleging that the company misled its customers about the product’s ability to accurately measure BAC. According to the FTC, Breathometer “had no scientific evidence to support its advertising claims.”
That same month, Breathometer reached a settlement with the FTC on that complaint, requiring the company to notify and fully refund all customers who had purchased a device. According to the FTC, the company never conducted adequate testing despite claiming its products were backed by “government lab-grade testing.”
“That was my biggest beating,” Cuban said.
In response to Cuban’s accusations, Yim told CNBC Make It that the “comments were completely off [base],” and that he didn’t spend his company’s money on personal travel. He also says it’s “not fair” for Cuban to base his assessment of Yim’s CEO skills on a series of social media posts, noting that his trip to Necker Island was to launch the Breathometer to Richard Branson.The launch was successful and Yim became a 2015 finalist in Branson’s Extreme Tech Challenge pitch competition.
“You can’t look at someone’s social media and take it at face value,” says Yim. “That’s not how social media works.”
Yim acknowledges that he hasn’t committed to adequate testing for some of his products, and says that lack of rigor contributed more to derailing his company’s progress than his travel schedule. Today, neither the Breathometer nor Mint products are available for purchase on the company’s website.
The founder notes that Cuban took the lion’s share of the investment, which was $500,000 of the $1 million total. He says the Sharks could finally recoup some value from their investment, because the company recently agreed to be acquired. The details of this deal do not yet appear to be public.
Update: This article has been updated to include a comment from Mark Cuban about his investments on “Shark Tank.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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