Over greater than a decade on ABC’s “Shark Tank,” billionaire Mark Cuban has noticed his percentage of fine investments — and dangerous ones.
Remaining week, Cuban instructed the “Complete Ship” podcast that when making an investment just about $20 million in 85 startups on “Shark Tank,” he is taken a web loss throughout all of the ones offers blended. “I have gotten beat,” Cuban admitted with amusing, sooner than occurring to percentage the worst funding deal he is ever made at the TV display: the Breathometer.
In 2013, an entrepreneur named Charles Michael Yim went on “Shark Tank” to pitch his product, the Breathometer, as “the arena’s first smartphone breathalyzer.” Yim wowed Cuban and the opposite Sharks via appearing off a smartphone attachment that he claimed may just as it should be measure blood alcohol content material (BAC).
Yim’s gave the Sharks glasses of champagne, after which had them blow right into a small, plastic software that might connect to a smartphone. Yim claimed the software may just ship BAC stage readings on your telephone, and gave you the choice of calling a cab with the contact of a button in case your BAC stage was once too prime.
Charles Michael Yim pitches the Breathometer on ABC’s “Shark Tank” in 2013.
Kelsey Mcneal | Disney Normal Leisure Content material | Getty Photographs
The pitch was once compelling, and Yim 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 in combination a $1 million funding for a 30% stake, which valued Yim’s corporate at $3.3 million.
“It was once a perfect product,” Cuban stated remaining week. “However, the fellow – 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 meant to be operating,’” Cuban stated. In line with Cuban’s recollection, Yim would answer that he was once “networking” on behalf of the industry.
Cuban stated the excuse did not slightly hang up: “Subsequent factor you already know, all the cash’s long gone.”
By way of 2016, Yim was once transitioning clear of the Breathometer, partnering with well being care massive Philips on a product known as Mint that measured ranges of sulfur compounds to your mouth to decide whether or not or now not you had dangerous breath.
In January 2017, the Federal Industry Fee filed a criticism in opposition to Yim and Breathometer, alleging that the corporate misled its shoppers in regards to the product’s talent to as it should be measure BAC. In line with the FTC, Breathometer “lacked medical proof to again up their promoting claims.”
That very same month, Breathometer reached a agreement with the FTC over that criticism, forcing the corporate to inform and entirely refund each and every buyer who’d purchased a tool. In line with the FTC, the corporate by no means carried out ok checking out in spite of claiming that its merchandise have been subsidized via “government-lab grade checking out.”
“That was once my largest beating,” Cuban stated.
According to Cuban’s allegations, Yim tells CNBC Make It that the “feedback have been totally off [base],” and that he did not blow his corporate’s cash on private shuttle. He additionally says it is “now not honest” that Cuban would base his evaluate of Yim’s CEO skills on a sequence of social media posts, and notes that his shuttle to Necker Island was once to pitch the Breathometer to Richard Branson. The pitch was once a hit, and Yim become a 2015 finalist in Branson’s Excessive Tech Problem pitch pageant.
“You’ll’t take a look at anyone’s social media and take it for face worth,” Yim says. “That isn’t how social media works.”
Yim recognizes now not committing to right kind checking out for a few of his merchandise, and says that loss of rigor contributed extra to derailing his corporate’s development than his shuttle time table. Nowadays, neither the Breathometer or Mint merchandise are that can be purchased at the corporate’s web page.
The founder notes that Cuban took the lion’s percentage of the funding, accounting for $500,000 of the overall $1 million. He says the Sharks may after all recoup some worth from their funding, since the corporate lately agreed to be obtained. Main points for one of these deal don’t but seem to be public.
Disclosure: CNBC owns the unique off-network cable rights to “Shark Tank.”
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