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> It's morally wrong and I just don't understand how people can defend this in the comments over at Linkedin. Why the fuck is the free market being used as a blanket argument against morals and ethics?

I bet it's because a lot of people over there would do the same given the chance

> This is downright deception and he got screwed. Period.

No one is disputing that. But the author's post title was (and still is) "Mark Cuban and Shark Tank got Royally Screwed". => https://www.linkedin.com/pulse/mark-cuban-shark-tank-got-roy...

Mark Cuban and Shark Tank didn't get screwed. It's the author and his investment company that got screwed by a greedy founder.

Mark Cuban and Shark Tank did get screwed because somebody at the show production thought viewer rating is more important than filtering out entrepreneurs with bad intentions before being asked to put their reputation on line by announcing investments on national television which would expose the Sharks to real risks with implications.

If I was Mark Cuban, I'd be fucking livid at the production for not seeing the risks of doing due diligence at his own expense, both intangible and tangible costs.

Because, for a television production company, ratings fundamentally are more important. Cuban knows it's an entertainment show first-and-foremost and he bought into that (and frankly, from what I can tell, loves that aspect of it).

I've never looked into the details, but I imagine the paperwork Shark Tank entrepreneurs sign includes something along the lines of "all deals agreed are non-binding and subject to completion of satisfactory post-show diligence blah blah". I'd be shocked if a decent percentage of the deals featured don't ultimately fall through for one reason or another at the diligence stage with zero impact on the investor's reputation, so I don't think Cuban will lose too much sleep over it.

Can't remember where I saw it, but recall reading that a significant number of deals do fall through. Mark Cuban actually had one of the higher success rates with about 80% of deals actually succeeding, and I think both Lori and Robert were at around 45%.

Edit: From this AMA on reddit with Mark Cuban 3 years ago, he says that about 25% of deals have something wrong (and therefore presumably don't work out).

https://www.reddit.com/r/IAmA/comments/15doqt/mark_cuban_thi...

"did get screwed because somebody at the show production thought viewer rating is more important than filtering out entrepreneurs with bad intentions before being asked to put their reputation on line by announcing investments on national television"

Listen - you have to take 'Shark Tank' with a little bit of 'Trumpiness'.

It's entertainment man.

The companies are chosen at least as much for their entertainment value as anything else.

Mark Cuban is not concerned about his 'reputation as a serious investor'. In fact, he's probably a joke in serious investment circles.

Mark is a 'pop culture' investor, he cultivates an image of what 'joe street' thinks a 'business investor' ought to be. Obviously - he is that to a great extent, he's putting real money on the line, but he's not a VC in the the more orthodox sense.

He'll have his team do due diligence after the fact, and do a no/go later on.

All of the ridiculous fights, 'isms' and 'sayings' etc. - they are like 'Trump tweets' - you think it will damage him, it won't. It's pop culture ... where having the eye-balls matter. He has legions of 'at home followers' who look up to him. That's his audience.

He might lose an inch of cred with people like you and I, but gain at least as much back from of the kinds of people that watch this show.

Presumably Mark Cuban got screwed because if The Style Club ever scaled up and became a massive success, there is an obvious and near-indefensible (if Howard's evidence is accurate) shareholder lawsuit from the previous investors patiently waiting on the sidelines.

> Style Club LA vs Style Club Global

It's pretty much a done deal here. What's so special about Style Club? Why not something completely different like 21 Forever, Nasty Gal to keep in trend?

It seems like she made a critical error.

The title seems correct to me.

The unscrupulous founder tried to screw the author, but the author is legally protected. As a result of the potential resulting lawsuit, Mark Cuban will lose any investment that he made in the new company. Therefore Mark Cuban is the one who gets screwed here.

Presumably the next step is for Mark Cuban to either not put his money in that doomed corporate shell, or to open up a negotiation with the original investors and produce a mutually beneficial arrangement. Actually litigating this is in nobody's interest because that will just pay lawyers to verify the obvious result.

Did they not get screwed, though?

As far as I could tell from the article, StartEngine's contract was solid. The Style Club LA had no legal right to transfer assets and IP to a new company without permission from StartEngine, which they did not receive.

So Cuban and Shark Tank invested in a company which came to them under false pretenses, with a significant undisclosed liability. If that's the case, they absolutely got screwed - they probably aren't culpable for Style Club's lack of disclosure, but they did get tricked into a bad investment.

But is there evidence beyond the episode that the deal actually went through? I mean, it's just reality TV, surely a real negotiation happens afterwards where this stuff is checked, no?

A commenter below posted a link to prweb touting the Cuban investment in the company. So it seems like Cuban did the deal...

Edit: typo

I wouldn't take a press release from the company as evidence that the deal actually closed, especially if you suspect some slightly shady dealings.

Your reading of Tony is good. Still, I'd say that at the time that Tony says:

  I never fucked anybody over in my life didn't have it coming to them. You got that? All I have in this world is my balls and my word and I don't break them for no one.

he's still poor and he has his principles. Later, he gets rich and then, violating the cardinal rule, gets high on his own supply. That's what corrupts Tony.

Hahn doesn't even have a gangster's ethos. So Tony isn't a fair comparison (to Tony). Trump is a fair comparison.

> Hahn doesn't even have a gangster's ethos.

This would be a good time to remember that we haven't heard Hahn's side of the story.

We have heard her side of the story. There may be more to her story but we have heard some of her side. We haven't heard her rebuttal.

Because those same people bashing the author want to be able to do the exact same thing to other people.

That's most likely true but there really are people who genuinely believe that free market is a panacea and that corporations and public as well as private interests are aligned to the point where even the suffering of people and individuals (getting wined and dined) is justified.

Kevin O'rly comes to mind when he claimed 3.5 billion people living in poverty is good because free market lol

I read it as "I feel like I got screwed, but I don't want to sound whiny, so I'll frame it as 'Mark Cuban got screwed' instead because it affects him too".

He did get screwed. It's not the author's fault for not knowing the behind the scenes due process that isn't televised.

I'm just shocked by why the background checks come after the the pitch and not before. It's not the author or audiences job to know and protect Mark Cuban or any of the shark's reputation or financial well being.

I'm also wondering why there are so many Koreans circle jerking Mark Cuban in the linkedin comments. As a Korean myself, wtf? Did he pull the Incheon Landing or something?

My guess is that it's because running the check costs money.

Doing checks after going through the show means paying for fewer checks because you don't need to check people who don't get picked. Also, you get to air people who have a pitch that would rate well on TV but who end up failing the check.

1) open browser and go to https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch...

2) do a fact check.

I don't see how this is can get expensive. Don't they have interns delivering coffee and running errands and other bullshit in the media/entertainment industry? Why not have them do more valuable and relevant tasks such as quick sanity check before the pitch?

Visiting the link you post would indeed have uncovered this particular problem in just a few moments, but doing due diligence means a whole load of other checks as well. It is very cheap to verify that a problem exists if you already know what the problem is.

I'm not suggesting that a quick sanity check before the pitch is a bad idea. For all I know they may do quick sanity checks before the pitch, but a quick sanity check is by definition incomplete. It isn't fair to say after-the-fact that a particular sanity check should have been included because that's where a failure was eventually found.

To be clear, they are a well-funded TV show and personally I think they should bother with due diligence on pitches before the show. But I don't run it, and I guess they don't seem to agree.

Simple fact checking whatever the entrepreneur is pitching doesn't take a lot of resources for the most part.

I think we have a different picture of "background check". I'm saying assume whatever numbers are thrown as bullshit until proven otherwise. That's just due diligence and common sense, it's hard to fathom it being an expensive and time consuming task unless you involve accountants and lawyers provided there's a audit trail available. That costs money and every year thousands of eager accounting/finance graduates are willing to work 60 hours a week at a depressed market rate due to the abundance of supply.

Using Mark's name gives the headline virality. That's about all I read into it.