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The title of the article - "Mark Cuban and Shark Tank got Royally Screwed" - makes no sense after reading the body. The author is saying that 1 person, in whos

The title of the article - "Mark Cuban and Shark Tank got Royally Screwed" - makes no sense after reading the body. The author is saying that 1 person, in whose company he'd invested 4 years ago, closed her company down and registered another company just before pitching to Shark Tank and getting 500K investment from Mark Cuban. So? How did Mark Cuban or Shark Tank get "Royally Screwed"? I don't get it. The author didn't state that he was going to sue the Style Club or enforce his 2012 investment agreement with Hillary (the founder of Style Club). What am I missing? Or is this a half-baked poorly written angry op-ed?

jraines 10y ago
I read it as either: "because they invested in a dishonest person" or "because they invested in a house that was built on my bombing range and I'm gassing up the B-52"
- throwawwr88 10y ago
  Was thinking along the "invested in dishonest person" lines as well. At the end he makes a comment about thinking she was "honest", which wasn't "proven true." Maybe a VC should have a better pulse on the companies they're investing in? Maybe as an investor, he should go to them and ask what happened first? Seems rather unprofessional to air dirty laundry in a one-sided way. It appears this guy is just a crappy investor, IMO. The title should maybe read "I possibly got screwed by not keeping a better eye on my investments."
  - droithomme 10y ago
    Welcome to HN, hope you have a nice time here after signing up 7 minutes before making your post. Looking forward to your future contributions.
danielhooper 10y ago
I noticed the author didn't really expand on that either, but I really don't think Mr. Cuban would be happy finding out someone he has invested in has previous history of defrauding investors. Not to mention how little investigation was required to find that out. You're right this doesn't really affect the tv show, people who work for the show, and the cable network. Absolutely nobody cares if the companies are "fake."
- throwawwr88 10y ago
  The thing is I've read the "deals" made on the show are not binding. Afterwards, they perform diligence. On air, they say "I'll fund you for $500k...!" with "...after we vet everything you just pitched." being left for after the cameras are switched off. There have been lawsuits around this that came to that conclusion. Though I may be misremembering it and am not really feeling like looking it up.
dharmon 10y ago
Agreed that the title is wrong. Is there a word for not just playing down someone else's success, but denigrating it? E.g., "My rival at work just won the lottery. Sucks for him, doesn't he know that most lottery winners end up broke and unhappy?"
- mcphage 10y ago
  Sour Grapes
btown 10y ago
The author's perception is that Mark Cuban, in agreeing to do that deal, is bound by contract to invest in someone now alleged to be committing fraud, and is therefore "screwed." However, there are almost certainly clauses that any deal on Shark Tank is subject to diligence after the deal is made. Maybe, and I'm just hypothesizing here, there are even punitive terms that if due diligence falls apart, they need to pay the production company in exchange for the exposure... in which case, it is the entrepreneur here who would be royally screwed! From the production company's perspective, why bother doing due diligence beforehand if it still makes for good television, and they're protected in a downside case? The true sharks are the ones who build the tank.
- tnecniv 10y ago
  They've talked about this on the show. Lots of deals fall through after the episode is shot and they start doing diligence.
- logn 10y ago
  They own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward.
  - adrianm 10y ago
    I believe this requirement was retroactively removed for companies appearing on the show.
  - koolba 10y ago
    > They own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward. They got rid of that clause after people called them out on it being horrifically unfair to everyone that pitches on the show.
    - maxerickson 10y ago
      Notably, Mark Cuban says he called them out on it. http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tank-to-remove-equity-clause.html http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tan...
pbreit 10y ago
Headline should be "Howard Marks and StartEngine Got Royally Screwed".
- btilly 10y ago
  No, because Howard Marks and StartEngine's investment has prior legal protection here. Mark Cuban, on the other hand, does not.
ekampf1 10y ago
She did not close one company down and open a new one. The domain for the new global company was registered 4 years ago, same time as the LA one showing intention for a global expansion early on. Closing the LA company and moving the entire IP to a new global company is in breach of her original investment deal. So basically Mark Cuban invested in a company who's IP is in dispute (because legally that IP belong to the LA company) - basically he invested in nothing.
dang 10y ago
> The title of the article makes no sense after reading the body. And it also breaks the HN guidelines about linkbait. We've changed the title to a representative sentence from the first paragraph.
gshulegaard 10y ago
> The author is saying that 1 person, in whose company he'd invested 4 years ago, closed her company down and registered another company just before pitching to Shark Tank and getting 500K investment from Mark Cuban. This is more or less correct, but the big part to me was this quote from the article: > If he/she wants to sell assets to another company — this includes a domain name, a logo and emails lists — needs our permission. Basically, a CEO cannot harm the company in any way without a written agreement with the StartEngine accelerator. If I am interpreting this correctly she wasn't able to just "close" her company down and move on. Especially reusing assets from the first company because of legally binding contracts between the first company and the start-up accelerator it took investment from. A possible problem with the author's blog is that it may premature. As others have noted, deals made on Shark Tank are subject to diligence after the show is recorded and possibly even aired. So it may be likely that diligence is still in progress. Anyway this whole thing is a mess and The Style Club entrepreneur is at the center of it. At any rate I am interested in seeing how this plays out legally.

jraines 10y ago

I read it as either: "because they invested in a dishonest person" or "because they invested in a house that was built on my bombing range and I'm gassing up the B-52"

throwawwr88 10y ago
Was thinking along the "invested in dishonest person" lines as well. At the end he makes a comment about thinking she was "honest", which wasn't "proven true." Maybe a VC should have a better pulse on the companies they're investing in? Maybe as an investor, he should go to them and ask what happened first? Seems rather unprofessional to air dirty laundry in a one-sided way. It appears this guy is just a crappy investor, IMO. The title should maybe read "I possibly got screwed by not keeping a better eye on my investments."
- droithomme 10y ago
  Welcome to HN, hope you have a nice time here after signing up 7 minutes before making your post. Looking forward to your future contributions.

danielhooper 10y ago

I noticed the author didn't really expand on that either, but I really don't think Mr. Cuban would be happy finding out someone he has invested in has previous history of defrauding investors. Not to mention how little investigation was required to find that out. You're right this doesn't really affect the tv show, people who work for the show, and the cable network. Absolutely nobody cares if the companies are "fake."

throwawwr88 10y ago
The thing is I've read the "deals" made on the show are not binding. Afterwards, they perform diligence. On air, they say "I'll fund you for $500k...!" with "...after we vet everything you just pitched." being left for after the cameras are switched off. There have been lawsuits around this that came to that conclusion. Though I may be misremembering it and am not really feeling like looking it up.

dharmon 10y ago

Agreed that the title is wrong. Is there a word for not just playing down someone else's success, but denigrating it? E.g., "My rival at work just won the lottery. Sucks for him, doesn't he know that most lottery winners end up broke and unhappy?"

mcphage 10y ago
Sour Grapes

btown 10y ago

The author's perception is that Mark Cuban, in agreeing to do that deal, is bound by contract to invest in someone now alleged to be committing fraud, and is therefore "screwed." However, there are almost certainly clauses that any deal on Shark Tank is subject to diligence after the deal is made. Maybe, and I'm just hypothesizing here, there are even punitive terms that if due diligence falls apart, they need to pay the production company in exchange for the exposure... in which case, it is the entrepreneur here who would be royally screwed! From the production company's perspective, why bother doing due diligence beforehand if it still makes for good television, and they're protected in a downside case? The true sharks are the ones who build the tank.

tnecniv 10y ago
They've talked about this on the show. Lots of deals fall through after the episode is shot and they start doing diligence.
logn 10y ago
They own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward.
- adrianm 10y ago
  I believe this requirement was retroactively removed for companies appearing on the show.
- koolba 10y ago
  > They own a small percent of every company that appears on the show whether they make a deal or not. After agreeing to a deal, it is subject to due diligence afterward. They got rid of that clause after people called them out on it being horrifically unfair to everyone that pitches on the show.
  - maxerickson 10y ago
    Notably, Mark Cuban says he called them out on it. http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tank-to-remove-equity-clause.html http://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tan...

pbreit 10y ago

Headline should be "Howard Marks and StartEngine Got Royally Screwed".

btilly 10y ago
No, because Howard Marks and StartEngine's investment has prior legal protection here. Mark Cuban, on the other hand, does not.

ekampf1 10y ago

She did not close one company down and open a new one. The domain for the new global company was registered 4 years ago, same time as the LA one showing intention for a global expansion early on. Closing the LA company and moving the entire IP to a new global company is in breach of her original investment deal. So basically Mark Cuban invested in a company who's IP is in dispute (because legally that IP belong to the LA company) - basically he invested in nothing.

dang 10y ago

> The title of the article makes no sense after reading the body. And it also breaks the HN guidelines about linkbait. We've changed the title to a representative sentence from the first paragraph.

gshulegaard 10y ago

> The author is saying that 1 person, in whose company he'd invested 4 years ago, closed her company down and registered another company just before pitching to Shark Tank and getting 500K investment from Mark Cuban. This is more or less correct, but the big part to me was this quote from the article: > If he/she wants to sell assets to another company — this includes a domain name, a logo and emails lists — needs our permission. Basically, a CEO cannot harm the company in any way without a written agreement with the StartEngine accelerator. If I am interpreting this correctly she wasn't able to just "close" her company down and move on. Especially reusing assets from the first company because of legally binding contracts between the first company and the start-up accelerator it took investment from. A possible problem with the author's blog is that it may premature. As others have noted, deals made on Shark Tank are subject to diligence after the show is recorded and possibly even aired. So it may be likely that diligence is still in progress. Anyway this whole thing is a mess and The Style Club entrepreneur is at the center of it. At any rate I am interested in seeing how this plays out legally.