Want to Get Money From Mark Cuban? Here's How.
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He can be bold and brash, but Mark Cuban is one of those rare entrepreneurs-turned-investors who can steer a new startup toward success. He juggles an ever-growing portfolio of businesses that now tops 80 ventures and sits as a judge on TV’s Shark Tank, a reality show where aspiring entrepreneurs pitch experts for investment.
So, how do you convince the Dallas Mavericks owner, worth an estimated $2.5 billion, to invest to your next big idea? “I look for unique products and companies that can be game changers in some cases or strategic to a theme I like or to another portfolio company,” Cuban wrote in an email to Entrepreneur.
Cuban’s business partners had additional insights. We reached out them to share the successful strategies that give you an edge.
Let him know he’s needed—but not necessary. There are breaks. Then there are big breaks. When the four Harvard Business School MBA students who created HourlyNerd were invited to appear on Shark Tank, it seemed like a sure-fire way to raise the profile of their low-cost financial advisory firm that now links more than 900 business school grads to over 300 businesses.
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But one of HourlyNerd’s first funders wanted to close out of his investment last summer, and the venture wasn’t scheduled to appear on Shark Tank until the fall. So the company’s co-founders backed out of the TV opportunity, cashed out the investor and decided to connect with Cuban another way: by cold emailing him instead.
They had already secured more than $1 million in commitments from family, friends and Harvard alumni—and emphasized as much in their email—then asked Cuban if he’d be open to providing his guidance. Cuban responded within about 15 minutes, says co-founder Rob Biederman. And not only did he offer unique advice, such as rolling out a service where business owners could pay a fee to chat with grads on-demand, but Cuban also ended up committing $450,000.
The key to HourlyNerd’s success? “We went out in the market trying to raise [money] before we spoke to Mark,” says Biederman.
Get to the point. What’s important when pitching investors is to understand how they think. So says Adam Lyons. And he should know. The 26-year-old chief executive officer of the cost-comparison site Zebra Insurance had seen Cuban on TV and read one of his books before he reached out to the famed entrepreneur.
“He’s pretty succinct and likes to be to-the-point,” says Lyons of Cuban. “That was the strategy for reaching out to Mark.”
Lyons’ first email was just one paragraph long, while others have said their most successful notes were written almost entirely in bullet points. Subsequent email exchanges between Lyons and Cuban, which lasted just a few weeks, included questions about how Zebra would grow its business and what it had already accomplished in the marketplace.
“Mark, in particular, is not big on talking,” says Lyons, who won’t disclose how much Cuban has invested but, so far, has garnered about $4.5 million for Zebra Insurance. “He likes to see execution: We shared our progress, we showed him what he had done.”
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Do what you do best…Sometimes some good ol’ fashioned hustling can bring Cuban to you. Darin Alpert, 28, joined FindMeGlutenFree.com as its chief operating officer a couple of years ago when the site was attracting up to 500 downloads a day for its app, which links consumers to restaurants with gluten-free menus. Cuban, who had invested in a chain of pizzerias known for its gluten-free crust, stumbled upon Find Me Gluten Free and sent an email stating that he was interested in advertising with the startup.
The two sides were soon trying to strike a couple of deals. Cuban agreed to advertise his pizzeria for three years, though before he would agree to make his own investment in Find Me Gluten Free he wanted additional details on how Alpert and his team were valuating their company.
“We didn’t have any revenue coming in, so it was tough to value,” acknowledges Alpert, who factored in the company’s user base, number of daily app downloads, success with search engine optimization and how much it would have cost to have someone else build everything instead of the company’s founder, Jason Elmore.
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“It was pretty straight forward: He proposed. We responded. He agreed,” says Alpert, who wouldn’t disclose the investment details and ultimately left Find Me Gluten Free after a larger company acquired it last year. “Everything was done over email and one, 20-minute phone call.”
…And be ready to respond. It was a similar story for Jared Tangney, who co-founded Electrozyme, which develops wearable bio sensors that analyze sweat to provide feedback about a person’s hydration and exertion levels when they exercise. Alpert (who is friends with Tangney) flagged the startup a couple of years ago to Cuban, who then signed up to Electrozyme’s email blast to learn more about the venture.
According to Tangney, Cuban then followed up with an email to discuss details about the company’s approach, such as whether it had conducted a market analysis about target customers or validated the technology in published papers.
“We went back and forth on email, and then he asked, ‘Are you looking for an investment?’” recalls Tangney. “That’s how we got started.”
Neil Parmar's work has been published in The Wall Street Journal, SmartMoney Magazine, The Huffington Post and Psychology Today, and he's been interviewed on CNN, ABC News, Fox News and radio shows in the U.S. and U.A.E. In 2012, former President Bill Clinton announced that Neil was among one of three winning teams, out of 4,000 applicants, who won the Hult Global Case Challenge and $1 million to help SolarAid, Habitat for Humanity and One Laptop per Child. Most recently, Neil was an assistant business editor and writer for The National, a newspaper based in the Middle East.
This post originally appeared at Entrepreneur. Copyright 2014.