Cookies help us deliver our Services. By using our Services, you agree to our use of cookies. Learn More.

One Bad Shark Tank Investment Cost Kevin O'Leary Over Half A Million Dollars

Its no surprise that when fans tune in to ABC's hit series "Shark Tank," all the focus is on whether or not the hopeful entrepreneurs who are presenting their innovative product or concept will score a significant investment. On top of that, any update the show provides (almost always being a positive one) revolves around how much profit these new business owners have pulled in. What seems to be never focused on is how the Sharks themselves end up financially making out on these deals. After all, they are the ones ponying up the money needed to bring these new businesses to the next level. And according to Shark Kevin O'Leary, one of these financial rolls of the dice resulted in a substantial loss.

When O'Leary spoke to CNBC, he explained how losses are just part of the new business startup landscape. And this is true for even the most seemingly no-brainer investments. "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," he said.

This is something O'Leary knows well as he went on to reveal details about a "Shark Tank" deal with a company that quickly lost him $250,000. The business owner then convinced O'Leary that the startup needed an additional $250,000 to set things right. Well, that turned into a double whammy instead, as the veteran Shark was out $500,000 when it was all over.

O'Leary should have followed his instincts

Investor Kevin O'Leary has proven on "Shark Tank" that for the most part, he knows how to find successful opportunities. According to Sharkalytic, the mogul has invested more than $8.5 million since the first episode aired back in 2009. Many of these investments have become profitable, especially ones like Plated, the online meal kit service that ended up selling for $300 million. But even the best and brightest of business minds are bound to be wrong, sometimes incurring a crushing loss. And in the misstep investment where O'Leary lost a cool half a million dollars, he explained that it could have been half of that if he had just followed his own intuition.

O'Leary wouldn't reveal which business the loss came from, but he says it was a start-up telecommunications company that got his initial investment. "You put $250,000 on a deal," he told CNBC. And then the guy calls you up four months later saying, 'Look, I burned through all the cash. But, I know what I did wrong. I need another [$250,000]." This was an expensive lesson for O'Leary, who is probably listening more to his intuitions nowadays. "In my stomach, I didn't feel right about it," he admitted. "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]." The Shark went on to explain that the number one reason for failed startups was that many owners refused to pivot, and that they don't want to listen to anyone else's opinion but their own.