Mark Cuban Says He Ran A ‘Ponzi Scheme’ In The 80s To Pay For College. ‘It Was Basically A Scam’

Before he was a billionaire, NBA team owner and TV personality, Mark Cuban was just another college student trying to figure out how to pay tuition. He opened up about a controversial money-making scheme he ran while at Indiana University on last year’s episode of the “Life in Seven Songs” podcast.

“It was basically a scam,” Cuban said, describing the chain letter setup he used to fund his junior year. “You can give me 100 bucks and I’m going to take 50 of that,” he said. The idea was that as more people joined in, each participant would eventually make more than they contributed.

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He acknowledged the scheme was questionable. “It was a Ponzi scheme,” Cuban said. But for him, it worked. Coming from a working-class family, he didn’t have much financial support aside from the occasional $20 from his dad. “That’s how I paid for my junior year of college,” he said on the podcast.

Cuban said he made sure his friends didn’t lose money. “I made sure my friends all got their money back,” he added. The money that remained went to pay his tuition.

He recalled the surreal experience of opening his dorm mailbox and finding it full of cash. “There’d be envelopes with $50 from here, $50 from there,” Cuban said. “It was amazing.”

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After college, Cuban moved to Dallas with almost nothing. He crashed on a friend’s floor in what he called a “s**thole” apartment. “If somebody was out of town, I got a bed,” he said on the podcast. He worked at a PC software store before being fired for closing a sale instead of opening the shop.

That firing pushed him to start his own company, MicroSolutions, which he later sold for millions. Years later, he co-founded AudioNet, which became Broadcast.com and was sold to Yahoo in 1999 for $5.7 billion.

“That gave me confidence,” Cuban said about his early years. Once he realized he could sell and make money, he got “excited about business.”

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These days, Cuban is focused on disrupting the health care industry through his company, Cost Plus Drugs. The startup aims to lower prescription drug prices by selling medications at a transparent, low markup.

He says the impact has been personal and meaningful. “We get letters and emails weekly, if not more often, saying ‘You saved my life,’” Cuban said on the podcast. “You saved my husband’s life, you saved my grandmother or grandfather’s life because they weren’t sure they were going to be able to afford their medications.”

Instead of slowing down, Cuban says this phase of his career is some of the most fulfilling. “This is fun,” he said. “I enjoy being disruptive.”

From chain letters in college to billion-dollar business deals, Cuban’s story is one of constant hustle and a willingness to take risks to make things work.

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