Mark Cuban invests $400,000 in a company he doesn’t understand — because his daughters do

Mark Cuban invested more than $20 million in companies during his time on “Shark Tank,” a show he will leave after its upcoming 16th season.

Cuban was known for his quick deals and exits, sometimes offering to buy companies for products he believed in. During a 2023 episode of season 14, Cuban broke one of his investment rules for the show.

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What happened: Cuban typically invests in companies that offer products that he can envision himself using or that could benefit the Dallas Mavericks, the NBA team he partially owns.

However, in a 2023 episode of “Shark Tank,” Cuban made an offer for a company whose products he would likely never personally use.

In Season 14, Episode 15 of “Shark Tank,” which aired in early March, makeup brand Youthforia made its debut.

Youthforia, founded in April 2021, had already reached $2 million in sales before appearing on the show, CNBC reported. The brand has gained significant traction on TikTok, particularly for its color-changing oil blush that adjusts to match and blend with customers’ skin tones. On TikTok, Youthforia has over 130,000 followers and over three million likes.

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The sharks liked TikTok’s success and were also impressed by the company’s founder and CEO Fiona Ko Chan.

Kevin O’Leary offered Co Chan $100,000 for 20% of the company, along with a $300,000 loan and a cut of the distribution payout.

“It’s a jockey’s bet on this business,” O’Leary said of Co Chan. “You’re really impressive.”

Co Chan wanted to hear from the other Sharks, with Cuban and Barbara Corcoran I’m not making offers yet. Co Chan tried to lure them in by saying that there was a launch of more eyeshadow shades coming up, which none of them were excited about.

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“When you have something that’s completely differentiated, you go for it and you don’t do anything else, because that just dilutes your efforts,” Cuban said. “Sometimes you shouldn’t listen to your customers.”

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Co Chan approached O’Leary and offered 5% equity for $400,000 and a royalty of 50 cents for each unit sold by the company up to $500,000.

O’Leary countered with an offer of $800,000 for 10% equity and a royalty of $1 per unit.

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That’s when Cuban decided to step in, offering $400,000 for 10 percent royalty-free, and said the reason he was interested in the makeup brand was because his daughters and wife would “get” the product, which he didn’t. meaning.

Cuban offered to wear the color-changing eyeshadow himself as part of the demonstrations.

O’Leary countered with an offer of $400,000 for 7.5 percent and a 75-cent royalty on sales of up to $1 million.

Cuban eventually got Co Chan to agree with his final offer of $400,000 for 8% and no royalties, which he offered “just to prove a point” and ended up defeat O’Leary.

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Why it’s important: The company and Co Chan drew praise from the Sharks in portions of the court after Cuban’s offer was accepted.

Herjavec and Corcoran, who accepted the offers, said they were impressed by Co Chan’s negotiating skills.

“Kevin, you need to get up and leave the Shark Tank,” Herjavec said. “Fiona takes your seat.”

The deal for Youthforia that was accepted makes Cuban the first deal he’s ever done with a makeup brand, which could offer some lessons. Cuban has often stuck to his principles in investing in products that he would use himself or that the Mavericks would use.

Hearing how much the other Sharks loved the company’s CEO and that the product went viral on TikTok, Cuban trusted his family and made the investment because he saw his daughters and wife using the product.

Youthforia is available on Amazon.com and also at The ultimate beauty (NASDAQ:ULTA) stores. While we probably won’t see the makeup products at Mavericks games in the future, they could end up becoming a staple in the Cuban household.

This article was previously published by Benzinga on Inspire gasoline and has been updated.

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This article Mark Cuban invests $400,000 in a company he doesn’t understand – because his daughters do originally appeared on Benzinga.com