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Rugged Maniac Update: Shark Tank Season 5, Episode 22

Andrew is a self-educated business owner and entrepreneur with plenty of free advice (which is worth exactly what you pay for it!).


Did the Deal Go Through?


Mark Cuban ultimately agreed to offer $1.75 million for 25% of a parent company that owns both Rugged Maniac and an ill-conceived Running-of-the-Bulls style business (it seems that the parent company is called Rugged Races). We know for sure that this deal went through because Cuban eventually exited the company, and the original founders got a solid payout (more on that below).

How Did the Business Do After the Show?

Within a few short years of airing on Shark Tank, Rugged Maniac went from a little over $4 million in sales, all the way up above $10 million in total sales. Further, the business was incredibly profitable even back then, with around a 20-25% margin (very healthy) after all expenses. By 2017, they were in 30 different cities, established a much more well-known brand nationally, and added an all-day festival at events, no doubt driving food and alcohol sales even further up. It is for all of these reasons that New Media Investment Group, a publicly traded newspaper company, bought an 80% stake in Rugged Races for some $10.4 million in early 2018.

What Do I Think?

I think Mark Cuban made a solid investment here. Although he apparently did mentor the duo (Rob Dickens and Brad Scudder) throughout their 3-4 year expansion period, Cuban's work paid off with roughly doubling his investment. Now, if I'm in Cuban's shoes, I realize that I can probably roughly double my own investments in the stock market, on average, once every 7 or 8 years. Having a business return double your investment after 3 1/2 years is considerably more appealing. However, we need to remember that Cuban's time is his most valuable asset, as he is fond of saying on the show, and considering that his net worth is some $4 billion today, a 1.75 million dollar profit represents about a 0.04% gain in his net worth. If you had a net worth of a million dollars, that would be roughly equivalent to a gain of $437. How much time would you put in to earn $437 (before taxes are taken out)? These are important questions to consider when investing.

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