Mark Cuban is one of the most successful angel investors in the world. Naturally, founders are vying for his attention as his funding is seen as something of a golden ticket.
But when he reportedly gets over a thousand pitches a day and notoriously invests in a variety of industries from employment platforms (Cluster) to sandwich shops (Fat Shack), there's no red thread in what he invests in.
Founders who seek funding from Cuban, or any other angel investor, are a needle in the haystack. And when looking to get found--and get funding--it's not just about standing out. To avoid getting overlooked, startups need to be what investors are actively looking for. Knowing what investors are seeking isn't always straightforward, but Cuban is very transparent in terms of what he's looking for.
In fact, it's written clearly and concisely on his public AngelList profile, under the "What I Do" section: "I invest in companies that I think are compelling, differentiated and run by motivated entrepreneurs."
One startup with all three is Eterneva, which is redefining the future of wearables and immortalizing those from the past with memorial diamonds. You can create diamonds made out of the remains of man's best friend or any loved one using either cremation ashes or hair.
The startup made its debut on Shark Tank in the fall of 2019, landing $600,000 from Cuban for a 9 percent stake. However, unlike most startups pitching on the hit TV show, Eterneva had already raised a $1.2 million round at a $10 million valuation. Less than two years after its appearance on Shark Tank, Eterneva has announced the close of an "oversubscribed" $10 million Series A funding led by Tiger Management.
The startup has been met with a great deal of interest with triple-digit growth in sales and it's easy to see why. It's because it has what Mark Cuban looks for in a startup:
1. It's Compelling
Translation: Connect on a deeper level.
The practice of memorializing the deceased is ancient, dating as far back as prehistoric times, and as our culture begins to shift away from large, sullen gatherings of black-clad patrons to memorialize the departed with lavish burial ceremonies and begins to move toward celebrations of life, Eterneva provides a shiny solution in line with the concept of celebrating life and immortalizing a loved one. In return, it's effectively speaking to our deep-rooted human desire to memorialize the life of the deceased.
Eterneva's man-made diamonds using cremated remains do a great job of speaking to people in a way that resonates with human nature and mankind in general. While other startups focus on what they offer, or in the case of tech startups the how of what they offer, Eterneva focuses on the why. And it's what's in its why that makes the startup compelling to both investors and consumers alike.
2. It's Differentiated
Translation: Change the game, don't reinvent the game.
When building a startup and seeking funding, it's not just about having a revolutionary idea. Odds are, your startup isn't doing something no one has ever done. Rather, you're likely doing something other companies do, but in a different way. And in many ways, this is ideal. After all, startups that enter an existing market typically find more success than those looking to create a whole new market (e.g., Myspace versus Facebook).
In fact, the idea for Eterneva was born when founders Adelle Archer and Garrett Ozar went in search of a company to do exactly what Eterneva does as a way to eternalize a loved one. And while a number of options exist, all were "lackluster, somber and overwhelming," according to Archer--the opposite of what you want when diamond shopping.
Eterneva didn't invent a new product, but it did reinvent how memorial diamonds are perceived, taking the macabre out of what was traditionally a grim industry. In its repositioning, it has managed to successfully differentiate itself from its direct competitors--and the memorial industry as a whole.
3. Its Founders Are Motivated
Translation: Be passionate about what you are doing, not motivated simply by the prospect of an exit.
It's a common sentiment that founders need to be passionate about their startup and what it does. And yet, there are still a lot of entrepreneurs who are most motivated by money. So while prospective investors will be interested in your proposed exit strategy, many are keen to find out where your allegiance lies, and whether or not you're motivated by what you're pursuing with your startup or the concept of a high-yield exit.
By communicating your genuine motivation for your startup, you're more likely to ignite a genuine interest from both consumers and investors. Investors choose to invest in companies and the people behind said companies--both of which need to resonate with them. Those that achieve this, like Eterneva, often have a personal stake or reason for building the startup. In other words, they are their own customers and they want what they offer.
The Three Elements of Successful Startups
Startups that have a compelling and differentiated company built by a strong team of motivated entrepreneurs are those that attract the attention of investors, including Mark Cuban and some of the other most sought-after angels in the world. With these three things, startups can both be the needle in the haystack that gets found and ignite a fire within an investor. And in getting an investor excited by your startup, you'll not only increase your odds of acquiring funding, but you'll also get a champion for your business. In the case of Eterneva, Cuban was so inspired by the startup, he shared that he "would have loved to take a hair from my kids when they were born and put it in a diamond to give to my wife as a gift."
What Eterneva is doing differently and what's setting it apart in the memorial diamond market is its repositioning the idea of celebrating life with an eternal keepsake, which takes what could be considered a macabre concept and gives it a positive and uplifting spin--something anyone could use, whether celebrating the life of a loved one or the birth of a new one. Its success isn't solely due to having the three things Cuban looks for in a startup, but the fact that these are also the same three things that the most successful startups have.