The worst “Shark Tank” investment ever was the Breathometer

The worst “Shark Tank” investment ever was the Breathometer

In more than a decade on ABC’s “Shark Tank,” billionaire Mark Cuban has seen his share of good and bad investments.

Last week, Cuban told the “Full Send” podcast that after investing nearly $ 20 million in 85 startups on “Shark Tank,” he suffered a net loss on all of these deals combined. He tells CNBC Make It that the loss is only “cash” up to this point, and ignores the fact that he hasn’t closed many of those investments yet: “I haven’t got out of it any more than I have entered. takes into account all ongoing operational activities and their assessments “.

In the podcast, Cuban shared the worst investment he ever made on the TV show: the Breathometer.

In 2013, an entrepreneur named Charles Michael Yim went to “Shark Tank” to introduce his product, the Breathometer, as “the world’s first smartphone breathalyser”. Yim wowed Cuban and the other sharks by sporting a smartphone attachment that he said could accurately measure blood alcohol content (BAC).

Yim’s gave the Sharks glasses of champagne and then blown them into a small plastic device that could be connected to a smartphone. Yim said the device could send BAC level readings to your phone and gave you the ability to call a cab at the touch of a button if your BAC level was too high.

Charles Michael Yim launched the Breathometer on ABC’s “Shark Tank” in 2013.

Kelsey Mcneal | Disney General Entertainment Content | Getty Images

The course was thrilling and Yim became the first “Shark Tank” entrepreneur to involve all five Sharks in a joint investment. Cuban, Kevin O’Leary, Daymond John, Lori Greiner and Robert Herjavec put together a $ 1 million investment for a 30% stake, which valued Yim’s company at $ 3.3 million.

“It was a great product,” Cuban said last week. “But the boy – Charles – I looked at his Instagram and he would be in Bora Bora … Two weeks later, he was in [Las] He was celebrating in Las Vegas and then he was going to be on Necker Island with Richard Branson. “

“I was texting him, like ‘What the fuck are you doing? You should work,'” Cuban said. According to Cuban’s recollection, Yim replied that he was “networking” on behalf of the company.

Cuban said the excuse didn’t quite hold up: “Next thing you know, all the money is gone.”

By 2016, Yim was ditching the Breathometer, collaborating with healthcare giant Philips on a product called Mint that measured the levels of sulfur compounds in your mouth to determine whether or not you had bad breath.

In January 2017, the Federal Trade Commission filed a lawsuit against Yim and Breathometer, claiming that the company misled its customers about the product’s ability to accurately measure BAC. According to the FTC, Breathometer “lacked scientific evidence to support their advertising claims.”

Later that month, Breathometer reached an agreement with the FTC on that complaint, forcing the company to notify and fully refund every customer who had purchased a device. According to the FTC, the company never performed adequate tests despite claiming that its products were backed by “government laboratory level testing.”

“That was my biggest defeat,” Cuban said.

In response to Cuban’s allegations, Yim tells CNBC Make It that the “comments were completely out of place [base]”and that he hasn’t wasted his company’s money on personal travel. He also says it’s” not fair “for Cuban to base his assessment of Yim’s CEO abilities on a series of social media posts, and notes that his trip to Necker Island was to introduce the Breathometer to Richard Branson. The field was successful and Yim became a finalist in 2015 in Branson’s Extreme Tech Challenge field 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 made a commitment to properly test some of his products and says the lack of rigor has helped derail his company’s progress more than his travel schedule. Today, neither 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, representing $ 500,000 of the total of $ 1 million. He says the Sharks could finally recover some value from their investment, because the company recently agreed to be acquired. The details for such a deal do not appear to be public yet.

Update: This article has been updated to include a comment from Mark Cuban on his investments in “Shark Tank”.

Disclosure: CNBC owns the exclusive rights to “Shark Tank” offline cables.

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