Kevin O'Leary Reveals His $500,000 Mistake on 'Shark Tank.

Investors on "Shark Tank" take a close look at every business pitch, but that doesn't mean they'll definitely see a return.

Kevin O’Leary is a standout among the "Shark Tank" investors, known for his sharp insights and tough critiques, along with some of the most heartfelt moments on the show. Many entrepreneurs think that landing his investment could really elevate their chances of making it big. Still, not every venture he backs turns out to be a winner, and he's lost hundreds of thousands on some poor choices. In a chat with CNBC, the 70-year-old opened up about one of his biggest blunders.

One entrepreneur really wowed O'Leary on "Shark Tank" and secured a $250,000 investment. But just four months later, O'Leary got a surprising call asking for more cash. “You put $250,000 into a deal, 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),’” he recounted.

This definitely wasn’t what the seasoned investor wanted to hear after putting his faith in the company. Deep down, he had a nagging feeling that lending money for a second time was a bad idea. Still, he chose to believe the entrepreneur and went ahead with another $250,000 investment. Just a few months later, that whole amount was gone. Unsurprisingly, O’Leary was really kicking himself over it.

“In my stomach, I didn’t feel right about it. 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],” he said. “The lesson is: Listen to your gut, because that is your experience. You gain that over time. You can’t forecast it. You have to learn it." He had no money two months later. "So I lost half a million dollars,” O’Leary said.

O’Leary has been in the investment game for decades and knows that not every deal is going to be a winner. In fact, he kind of expects that most of his investments won’t turn out to be huge successes. “You make 10 investments, you get two to three big wins. And that covers the losses from the other seven,” he said.

Sure, some deals might flop, but the big wins are what really matter. One notable investment he made was in Plated, a meal kit service. Originally, Mark Cuban put in $500,000 but had to bow out, according to Money Digest. This opened the door for O’Leary, even though he had some doubts about their business model on “Shark Tank.”

There were some strings attached to his investment, though. In an episode of Barb “UNCORC’D,” he mentioned that he wanted to keep his share intact when Plated brought in more investors in 2014. So, the seasoned investor worked out a “ratchet” deal with the company to protect his stake from being reduced.

Three years down the line, Albertson’s swooped in and acquired Plated for a whopping $300 million. It turned out to be a sweet deal for the company’s founders and O’Leary, who walked away with $3.5 million thanks to his 2.5% ownership.

Despite the occasional setback, Kevin O'Leary’s approach to investing continues to be a testament to the power of learning from failure. His openness about his $500,000 loss on "Shark Tank" shows that even the most seasoned investors make mistakes, but it's how they bounce back that truly matters.

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O'Leary's success in the investment world comes from a combination of experience, intuition, and perseverance. His ability to acknowledge his missteps while also celebrating his big wins, like his investment in Plated, proves that the key to success is not avoiding failure, but using it as a stepping stone toward greater achievements.