Kevin O’Leary is famous for always asking tough questions and making big business deals. But even the best investors can make bad decisions—sometimes very expensive ones. One of his worst mistakes wasn’t just a small loss; it was part of a huge $8 billion disaster. At first, everything looked perfect and it was a deal that seemed too good to pass up.
O’Leary was even paid $16 million to be part of it. But then, almost overnight, the whole thing collapsed, and he lost everything. Let’s take a closer look at how Kevin O’Leary got caught in one of the biggest financial scandals in recent history.
Kevin O’Leary’s worst investment mistake ever
Kevin O’Leary has made a fortune by spotting promising businesses and investing in them. But even experienced investors make mistakes, and one of his biggest failures was his involvement with FTX, the cryptocurrency exchange that collapsed in 2022. FTX was once considered a major success in the crypto world. Many people believed it was a safe and reliable platform for trading digital currencies and O’Leary was one of those people.
He was paid $16 million to promote the exchange, believing in its potential. However, when the company collapsed, his investment was completely lost. Speaking about the situation via Harvard, he admitted:
He [Sam Bankman-Fried] paid me $16 million on the FTX exchange, and I was wiped out … But what I said [to CNBC] was I’m a venture investor. Eight out of 10 deals I do go to zero for various reasons: market changes, execution excellence not there, sometimes fraud, which is being alleged here and … being tried this week as we sit here.
On the same subject, Investigators later discovered that the company had lost $8 billion of customers’ money due to fraud, poor management, and reckless financial decisions. In the same Harvard event, he told the audience that failure is common and should not stop people from trying. He encouraged young business owners to take risks and learn from their mistakes, saying that these experiences help them make better decisions in the future.
Many investors, including O’Leary, were left with nothing. (via Tech Target) Despite the collapse, FTX has managed to recover nearly $16 billion to pay back its customers. As part of its bankruptcy plan, 98% of creditors will receive 119% of their original claims. However, the company will not be making a comeback—it will be shutting down permanently.
The FTX scandal has made many people more skeptical about cryptocurrency. The industry is already seen as risky, and the failure of such a big exchange has raised concerns about security and trust. For O’Leary, the FTX disaster was a painful but valuable lesson. While Shark Tank often focuses on big wins and success stories, this multimillion-dollar failure will likely never be featured on the show.
Why does Kevin O’Leary believe investing in companies that solve big problems is a smart choice?
Kevin O’Leary often emphasizes that the key to building a profitable business is solving big problems. He believes that when a company focuses on addressing significant issues, and it finds an effective solution, it has the potential to generate substantial returns.
His investment strategy is rooted in this mindset: by targeting companies that tackle major challenges, investors can tap into opportunities for both growth and profitability.
O’Leary’s perspective on problem-solving companies is particularly relevant in today’s world, where global issues are becoming more complex. From cybersecurity threats to climate change, there are vast challenges that need innovative solutions. According to O’Leary (via Yahoo!), investing in companies that provide these solutions is not just smart—it’s a way to support businesses with the potential for long-term success.
He also points to the growing need for renewable energy as another important problem to solve. With climate change causing increasingly severe weather events, there is a significant demand for clean energy solutions.
By investing in companies that provide essential solutions, investors help create positive change. At the same time, they position themselves to benefit from the growth of businesses tackling some of the world’s most pressing challenges.
You can watch all the seasons of Shark Tank on Hulu.
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