A first-time founder with no product yet landed a $500,000 investment from Mark Cuban by sending him a cold email.
Dhruv Ghulati, a Techstars and Entrepreneur First alum, is founder of Factmata, whose A.I. analyzes content for bias, hate speech, and clickbait. Its mission is to fight misinformation online. Four years ago, Ghulati started his London-based company by taking out a loan for the equivalent of about $33,000. He knew he would need more than that, so he and his team set about raising money from some Silicon Valley giants. They got about $75,000 in investment from Google, and Ghulati began cold-emailing high-profile potential investors who'd been vocal about the problem of misinformation online, particularly in the wake of the 2016 presidential election. Cuban had spoken out on the issue, and he's famous for reading cold emails, so Ghulati decided to try emailing him.
It worked. Cuban invested $250,000 right away and a further $250,000 nine months later. Recently, Ghulati shared the message that first got Cuban's attention with entrepreneur Martin Delaney for his blog Founders' Hustle. With Ghulati's permission, Delaney shared it with Inc. Here's the full text:
Reaching out -- Factmata
Dear Mr. Cuban,
Apologies for my cold message. I am the founder of a Google-backed startup called Factmata that uses artificial intelligence to perform automated fact checking and referencing. We are a team of three NLP researchers and scientists with 30-plus published and cited papers within natural language processing, question answering, and information extraction. I am currently fundraising from people who care about the problem of online misinformation, want to reduce mistrust in the media, and change the way we consume online content. I would love to tell you more about us if of interest, especially given your recent public discussions about this topic.
Look forward to hearing from you soon,
Fortunately for anyone who wants investment from Cuban, the billionaire Mavericks owner has explained pretty clearly what he looks for in a cold email and how to grab his attention in the two seconds or so before he goes on to the next email (he gets more than 1,000 email pitches a day). Ghulati did pretty much exactly what Cuban says he wants.
1. He used email.
If you're contacting someone to pitch something or ask for something, begin by figuring out how that person prefers to interact. In Cuban's case, he's said many times that he prefers email (and possibly text messages) to other forms of communication.
Cold emailing can be a surprisingly effective way to reach people--Delaney says he's often used cold email to reach potential investors or customers when building successful companies himself. Ghulati says it's worked with other investors as well.
2. He got straight to the point.
This is something Cuban insists on because of the quantity of email he receives and reads. If he doesn't know exactly what your email is about within two seconds, he'll move on to the next one. The second sentence quickly and clearly told Cuban exactly what he needed to know and why Ghulati was contacting him.
3. He stuck to the facts.
Given the ambitious nature of Factmata, I think the next sentence is brilliant. A lesser mind would have inserted a comment or two about the destructive nature of fake news. That was unnecessary because Cuban had already made his feelings on the subject clear. Ghulati might also have been tempted to write about his product's huge potential to make the internet and the world a better place. That could have turned Cuban off--he dislikes over-the-top claims.
Keep in mind that at the time, Factmata didn't have a product yet. So Ghulati smartly used his next sentence to give evidence for the idea that he and his teammates really could create A.I. that would identify fake news. The phrase "Google-backed startup" in the previous sentence did that too.
4. He merely asked to provide more info.
This is the best way to close most cold emails or calls. Ghulati specified that he was looking for investors who cared about the issue. But his actual ask was very modest--he just wanted to provide Cuban with a little more information. Along the way, he let Cuban know he'd been paying attention to what Cuban had to say.
Ghulati got a quick response to say, yes, he could send more info, so he did. Once again, he didn't overload Cuban. His return email was short and explained in a few paragraphs how the product would work and which publishers and tech companies were interested in it. He also provided a teaser deck for Cuban to review. (You can find the second email in Delaney's blog post.)
That second email led to Cuban doing what he says he does when he's initially interested in a pitch--"I will just start peppering them with questions," he said in a podcast last year. If Cuban likes the answers, the next step may be due diligence from members of his team and, depending on what they find, he may wind up investing, as he did with Factmata.
If you've been skeptical about sending cold emails, stories like Ghulati's should help change your mind. Delaney reports that it took only six emails, including the initial cold one, before Cuban decided to invest, meaning that those emails brought in more than $82,000 each. If you've been thinking about cold-emailing investors, especially Cuban, you should give it a try. It's a small effort that can bring outsize returns.