Access Menu

Log in via Social

Log in with LinkedIn
Sparkle Cut Diamonds

Sparkle Cut Diamonds

We are a diamond tech company using nanotechnology to increase the Sparkle of diamonds by 50%-100%. Sell D2C and thru showrooms.

Verify Investor Status to make a reservation

Deal Type

Convertible Note

Funding Goal

$1,000,000

Current Reservations

$45,000

Minimum Reservation

$10,000

Deal Stage

Bridge to Series A

Interest (% per year)

6.00%

Term Length (Months)

24 months

Valuation Cap

$15,000,000

Conversion Discount (%)

20%

Warrant Coverage (%)

N/A

Open Date

06/18/2019

Maximum Reservation

$250,000

Closing Date

09/18/2019

Elevator Pitch

Sparklecut.com is a revolutionary diamond-tech brand, selling proprietary diamonds D2C + developing a network of national showrooms consisting of existing jewelers. Sales goal $100M+ within 4 years.

Company Overview

Sparkle Cut Diamonds is a revolutionary diamond-tech brand positioned to disrupt a $22B industry ripe for innovation. We use nanotechnology to place patent-pending, invisible finishing cuts on a diamond and create 50%-100% more Sparkle than typical diamonds that cost thousands more - with no carat weight loss. Sparkle Cut's pièce de résistance: we make good diamonds great and great diamonds exceptional. We focus on, and deliver, what matters most to customers (size and sparkle) at surprising price points. Sparkle Cut is setting Sparkle records including an all-time high Sparkle rating out of 4.5 million diamonds evaluated.

Led by a seasoned team from other disruptive brands with a track record of focusing on customer experience and delivering better products and strong financial results.

CEO: Jo Lawson, 9 years at Apple and 3 years at Movado Group - understands luxury/tech intersection with undeniable customer focus and proven product launches.

Co-Founders: Pat Hopf & Mark de Naray, formerly Sleep Number Bed Chairman + CEO, disrupted the sleep industry by building a brand from zero to hundreds of millions of dollars in several years.

Sparkle Cut has raised $2.5M to date, has started booking revenue with D2C and B2B strategies, and is currently raising $1M in funding to fuel exponential growth in 2019 and beyond.

This link to a video shows a sample diamond (much higher grade diamond, Not Sparkle Cut) which costs roughly $10k, next to a sample Sparkle Cut diamond (on right set in yellow gold) that only costs $5k.

Traction

  • Filed a second patent in July.

    June, 2019
  • In discussions with wholesalers and retailer interested in carrying our branded proprietary diamonds in their showrooms.

    June, 2019
  • Launched Sparklecut website displaying diamonds direct to the consumer.

    November, 2018
  • Hired Jo Lawson, a senior marketing executive from Apple and Movado, who became the CEO shortly thereafter.

    June, 2018
  • Filed initial patent for the Sparkle Cut process.

    May, 2018
  • Closed on a $1.3 million financing with angel investors.

    May, 2018
  • Completed an extensive round of R&D testing proving that the Company could increase the Sparkle of diamonds by 50-100%.

    April, 2018
  • Completed marketing research and developed the trademarked phrase "The 3S's of Diamonds --- Size, Shape and Sparkle.

    May, 2017

Pitch Deck

Press Mentions

Testimonials

Kate from Santa Cruz
Kate from Santa Cruz
Customer
"These are the first diamonds I've ever owned. I love them. They sparkle like crazy and make me feel gorgeous.""
Cathy from Minneapolis
Cathy from Minneapolis
Customer
"I am in love with my spiral ring from Sparkle Cut. The half carat diamonds look spectacular, and the ring is a true conversation starter."
Candise from San Diego
Candise from San Diego
Customer
"I have a few high-quality diamond pieces. And I can't tell the difference between my Sparkle Cut "J" grade diamond and my "D" grade diamonds."
Kalpesh Jhaveri
Kalpesh Jhaveri
GIA Graduate Gemologist & VP Diamond Club Wes
"Sparkle Cut is the great equalizer, making even J and K color diamonds sparkle like much higher grade (and more expensive) diamonds."

Previous Funding

  • $675,000 Convertible Note
  • Raise Source: Investors
  • March 2019
  • $1,500,000 Equity
  • Raise Source: Investors
  • May 2018
  • $300,000 Equity
  • Raise Source: Friends
  • May 2017

Frequently Asked Questions

What experience does management have at disrupting large consumer industries?

Jo Lawson was an executive at Apple from 2001 to 2010 during a period of tremendous growth. Mark de Naray was CEO at the Sleep Number Bed from $1 million in sales to $160 million, and it is $1.5+ billion today. Patrick Hopf was the Chairman of Sleep Number Bed for 12 years.

How big is the U.S. diamond industry and how much of that is engagement?

Annual sales are approximately $22 billion, and engagement accounts for about $14 billion in sales. There are 2.3 million marriages, and the average engagement ring costs about $6,000. The average age of first marriages is now flat at 29, and the engagement market is flat to growing slightly.

Are most diamonds unbranded or branded?

Most diamonds are unbranded, thus providing an opportunity for a new brand featuring superior diamond products with 50-100% more Sparkle. The largest brands are Forevermark (De Beers), Neil Lane (Kay's) and Tiffany's. Other specialty jewelry brands include Pandora and Swarovski.

Who are your primary customers?

Engagement is 65% of the market, and most people getting engaged are millennials. Women are highly influential in the purchase, as they have probably been looking at jewelry sites for a year before the engagement occurs. To date, we have sold engagement rings with prices ranging between $1,500 and $19,000. In addition, self-purchase by women is increasing rapidly, particularly for studs and right hand rings.

How will you market to those customers?

Social media marketing is the primary way to reach consumers. In addition, the use of email, YouTube, PR and influencers will also be important.

Are consumers able to see your diamonds somewhere?

Not currently, however, we are in discussions with companies which sell to or own jewelry stores. We could then have a Location Finder on our website which would direct consumers to jewelry showrooms where they could see our diamonds and become educated about them. Some consumers may buy at the showroom, and others may return to the website and buy there.

Will the product line expand over time?

Yes. Currently we offer Sparkle Cut diamonds only in round shapes, which account for more than 60% of the market. We will add additional shapes over the next year. Although we can customize any size diamond, most of the diamonds we offer on the website are .5 to 1.5 carats. We are also adding new diamond designs in studs, pendants and right hand rings.

How will the proceeds be used?

Primarily for hiring marketing staff and paying for marketing initiatives.

What are the company's long-term goals?

By offering exceptional products and a better customer experience, we hope to become a leading brand in the diamond industry. Leading brands today have sales of greater than $100 million per year.

Who are the largest e-commerce sellers of diamond jewelry?

We believe Costco is the biggest, but they do not focus on branded diamonds or customer service. Blue Nile is the largest e-commerce retailer. Online sales account for 11% of diamond sales today, and this is expected to increase to over 15% within 3 years. Other e-commerce sellers offer primarily commodity diamonds with a focus on price, not superior, branded diamonds with a focus on service.

Will investors receive a discount on diamond jewelry purchases?

Yes. They will get a 10% discount all year, and special offers will be made available also. Jewelry can be purchased from the website, or special orders can be handled by our merchandising staff.

Where do you get the diamonds and are they natural?

More than 90% of all diamonds are shipped from mines around the world to India to be cut. We buy diamonds which have been cut in India, and we apply our patent-pending Sparkle Cut to those diamonds in the U.S. Some people regard this as a "finishing cut," which is designed to improve the diamond. We currently work on and sell only ethically sourced, natural diamonds.

Can you improve the Sparkle of my existing diamond?

Yes we can, however, we are not offering this service at this time. We have chosen to focus on selling our new, branded diamonds instead. A number of people have asked "why won't all diamonds have a Sparkle Cut eventually," and this can be accomplished by offering an aftermarket service in the future.

Does the Sparkle Cut change the structural integrity or carat weight of a diamond?

No. We are re-directing the beams of light trapped inside a diamond up thru the top, but we are not using laser treatments. The micro-cuts we are applying cannot be seen with a 30X microscope, and the weight is not changed. We also do not change color or clarity. Sparkle is a sub-component of Cut, and we do improve the Sparkle of diamonds and therefore this element of Cut.

What are you doing to generate consumer trust?

We strongly believe in having Integrity be the watchword for all our actions. As a result, we have instituted a series of Promises on our website, which are highly unusual in the jewelry industry. One Promise is to offer consumers an industry leading 40 day return policy. Building trust will take excellent execution daily for years, but by providing the highest Sparkle diamonds, an exceptional consumer experience, and great values, we hope to develop an incredibly positive word-of-mouth over time.

Most of your diamonds are J and K colors rather than DEF; why is that?

There is NO correlation between color and Sparkle. You could have a great D color diamond, and it may have poor Sparkle. Or you could have a Sparkle Cut K color diamond, and it will have exceptional Sparkle. DEF color diamonds cost two to three times as much as J and K color diamonds, but Sparkle Cut diamonds look as good or better! Customers can save 50% or more by purchasing one of our JK color diamonds with a Sparkle Cut, or they can spend the same amount of money and buy a much larger diamond! Diamond industry insiders don't like us telling consumers to not waste their money on high color diamonds, but if you could buy a 2.5 carat diamond for the same price as a 1.75 carat diamond with a DEF color, and the 2.5 carat diamond had significantly more Sparkle, wouldn't you?

Risks & Disclosures

See Risk Factors Document.

Documents

Confidential

Loading...