One Bad Shark Tank Investment Cost Kevin O'Leary a Whopping $500K
The hit series Shark Tank has captivated audiences since 2009. Promoting dramatic presentations by hopeful entrepreneurs seeking to attract investment for their innovative businesses.
The show's focus is often on whether or not these entrepreneurs will receive the investment they have come for. However, little attention is ever paid to the financial successes of the Sharks who invest in these new ventures.
And as one of the main Sharks, Kevin O'Leary once proved, even the brightest of business minds are bound to make mistakes sometimes.
Speaking in his former CNBC show Money Court, O'Leary revealed that one of his Shark Tank investments once cost him a considerable $500K instead of making him that money in return.
Although he refused to share which investment it was in particular that went sour, he discussed how it taught him a valuable lesson in trusting his instincts.
"What I've learned after doing this a long time [is] no matter how you feel, and how optimistic you are, in the moment of making an investment, pulling the trigger, you have no idea of the outcome".
O'Leary went on to clarify it was a telecommunications company he had initially invested $250K in. But then felt pressured to invest more money because he was friends with the owner.
Explaining his mistake at the time, he said, "In my stomach, I didn't feel right about it… My gut said 'No.' But because I knew the guy and I liked him, and he was a friend, and yada, yada, yada ... I gave him another [$250,000]."
Unfortunately, this was a costly mistake for O'Leary. The company ultimately failed with an investment he would never get back. However, because of that incident, O'Leary now understands the importance of following his instincts when considering an investment.
He explained that many failed startups are due to owners' refusal to pivot and listen to others' opinions. Therefore, he advised it is essential to always consider each investment opportunity carefully and stay true to one's intuition. Even if it means passing on an opportunity that appears to be a sure thing.
Despite the loss, on the whole, O'Leary has generally been rather profitable from his business investments over the years. Proving himself a savvy investor on the show, he has invested $8.5 million of his own money since the start. Such experiences serve as a reminder that investing always carries some risk. Still, this mistake will undoubtedly be one he won't forget soon.