When it comes to Steady, the platform that helps hourly workers manage their income, maximize their income, and access deals on things like benefits and financial services, the strengths of the business are clear. But it took time for founder and CEO Adam Roseman to clearly define and communicate each of them in his quest for fundraising.
To date, Steady has raised just under $30 million with investors that include Loeb.nyc, Recruit Strategic Partners, Propel Ventures and Flourish Ventures. In fact, Flourish’s Emmalyn Shaw sits on the board, having led the company’s Series A round in 2018.
As a partner at a $500 million fintech fund, her expertise in not only how fintech companies should think about fundraising but what it takes for them to be successful is invaluable. Lucky for us, we got the chance to sit down with both Steady CEO Adam Roseman and Emmalyn Shaw for a recent episode of Extra Crunch Live.
The duo were gracious enough to walk us through Steady’s Series A deck, explaining the importance of highlighting the strengths of the business. They went into detail on how Steady was successful in that during that fundraising process, and what the company could have done differently to be more effectively.
Shaw and Roseman also gave some fantastic advice for founders during the Pitch Deck Teardown, wherein speakers give their expert feedback on decks submitted by the audience. (If you’d like to have your pitch deck featured on an episode of Extra Crunch Live, hit up this link.)
Relationships first
Roseman shared that the best investors are ones that not only understand the business but understand you as a founder and a person. He explained that he and Shaw had plenty of time to get to know each other before the Series A deal.
“I’ve been a part of businesses in the past as an entrepreneur and on boards where it’s been the worst situation, especially when they don’t understand your business,” said Roseman. “Flourish took the time to understand it through and through and was entirely aligned. That makes for the best long-term partnership.”
While it’s a cliche, it remains true that investors often place bets based on a team and not an idea or a product. But what exactly makes a great team or founder? According to Shaw, it’s about vision and passion.
“In Adam’s case, he has a direction connection to what Steady is trying to do,” said Shaw. “That makes a huge difference in terms of commitment because you have ups and downs. They bring experience in terms of understanding the space, how to penetrate and scale and a deep understanding of fintech.”
Roseman first built Steady because his father, who moved to Savannah to retire, soon realized he hadn’t saved enough to live off of. He needed hourly work, and the process of finding it, maximizing income and getting access to services like benefits and financial services was fragmented and difficult at best.
Roseman realized that his father wasn’t alone. The number of hourly workers has only increased and will only continue to grow as the gig economy booms.
With an early-stage business, so much is subject to change, whether it’s the feature sets you provide or the business model you use or the composition of your team. But the problem and the vision often remain the same, and Roseman believes the key to fundraising is communicating that.
“So long as you’re clear and decisive around the problems you’re trying to solve and the market that’s experiencing that problem set, you’re going to be successful.”
Steady’s Series A pitch deck
Steady’s strengths are wrapped up in those very issues. The problem set faced by hourly workers, a growing demographic, are complicated. The company’s Series A pitch deck did a fantastic job of outlining that, and it attracted Shaw.
Roseman and Shaw walked us through the pitch deck and shined a light on what worked and the few things that didn’t.
That starts with Roseman’s connection to the problem, discussed earlier. He actually put his father on one of the earliest slides in the deck, with voiceover that explained that his father was going through some of the same struggles as the customer base of Steady as a whole.
This understanding of the user then led into proof points, with the deck showing the startup’s growth. From April 2018 to October 2018, the company had 200,000 installs, 140,000 registered users and 165,000 job applications started.
Shaw added that Roseman didn’t include the CAC (cost to acquire a customer) on the slide itself, but mentioned it in voiceover and that it was “very compelling, particularly in fintech, where sometimes you’re paying quite a bit to acquire a customer.”
Product-market fit had been demonstrated. The deck then struck another chord: market size. The deck showed that 94% of all net job growth came from alternative work, with the alternative workforce growing from 15 million in 2005 to a projected 125 million in 2025.
Though Roseman did a thorough job of identifying not only the size of market but the intricacy of the problem set, including income volatility of target users, he said that he regrets not painting a clearer picture on the ROI for users.
“We had been able to demonstrate that our initial member base was getting value in the form of incremental income we were generating for those individuals,” said Roseman. “Based on the uniqueness of our business model, and that connectivity into their financial accounts (which helps us to measure that impact), we did have some of that early data but we didn’t put it forth in the deck. I don’t know why we didn’t. That was a big mistake.”
But a big problem in a big market does not a successful business make. The feature set has to meet the demands of the problem not only in a way that’s clear, but unique.
Steady Series A Deck by Jordan Crook on Scribd
“What we wanted to do was define how we were different, and we did that by taking the world of financial health/personal financial management, and taking the worlds of job search and navigation and bringing them together,” said Roseman. “We changed the narrative from focusing on a person searching for a job to searching for income and maximize that income.”
The deck outlines how the feature set is positioned around income, and the long-term optimization of that income and personal financial health over “getting a job today.”
That said, Shaw believes that one shortcoming of the deck is how much detail went into the feature set. All said, six slides in the 20-slide deck are reserved for an explanation of the features of Steady’s product.
“That could have been in an appendix, I think,” said Shaw. “Every investor comes with a deeper level of expertise or baseline experience. You need to figure out how much you want in the decks versus an appendix or follow-up. There is probably some more balance that could have been achieved here.”
Roseman also thinks he could have done more to emphasize that Steady is first and foremost a data business. In the case of Steady, there are many strengths to choose from. Identifying them and clearly explaining them without being verbose is a good challenge to have, but a challenge nonetheless. It’s something he says he’s improved on over time.
Today, Steady doesn’t have to do as much work explaining the market itself or the size of the problem, which was one of its earlier strengths. But he does wish that he spent more time showing off the startup’s differentiation as a data business.
“Identifying your core value that’s going to help differentiate in the market, and build a moat around the business, a barrier from others getting into that market,” said Roseman. “We were starting to accumulate and utilize an important data set, and it is really core to everything we do. I’m surprised that we didn’t touch on that in the deck.”
The pitch deck teardown
Steady’s Series A deck wasn’t the only deck we looked at on this episode of Extra Crunch Live. Each episode features the Pitch Deck Teardown, where our esteemed guests take a look at decks submitted by the audience and give live feedback. (If you’d like your deck to be featured on an upcoming episode of Extra Crunch Live, hit up this link.)
Here are some insights from Shaw and Roseman about how to be successful with your deck:
- Don’t get ahead of yourself with financials. Showing financial projections four years out, as an early-stage business, is far less credible than showing actual revenue today.
I think it’s important to have a clearer sense of where those revenue streams are today. [It] is much more important than trying to show your ability to forecast the monthly financials for the course of the next four years.
- To that point, it’s more important to show your understanding of the variables that may affect revenue than to just show projections of that revenue in the future.
Are you clearly defining the variables? I think those variables are what are going to change over time. But do you understand what those variables are? Have you thought them through? Do they make sense? If you’re able to tell a story, an investor may or may not agree with your assumptions, but you want them to agree with the fact that you’re at least thinking about the business in the right way.
- Paint a clear picture of not only the numbers of your CAC, ARR, etc. but also your plan to turn leads into conversions and proof points around LTV.
What’s the entry point with any one of their preexisting customers? How does it grow over time? What does penetration look like? How does upsell work? How do you think about that? And what is your distribution channel? Because if you really have a CAC of, whatever, $600+, that’s pretty substantial. So how do you think about acquiring these customers? How do you get them to quickly pay back in terms of LTV?
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