Before our conversation on Extra Crunch Live, Marlon Nichols dropped a bomb on me. The MaC Venture Capital founding managing partner hadn’t actually seen Wonderschool’s original pitch deck before investing in the remote education startup. Our conversation with the company’s CEO, Chris Bennett was the first time he’d been through the seed-stage deck.
Their partnership was a bit of Silicon Valley luck, good timing and some old fashioned networking.
“He was a part of an organization that was helping to bring more diverse founders in touch with investors,” says Nichols. “That was happening when I first moved to the San Francisco Bay Area in 2011. We started to build a casual relationship then. Fast forward to 2016. At my first fund, Cross Culture [Ventures], we were interested in investing in early childhood care. We were actually looking at a number of different companies and one of my partners, Suzy [Ryoo] was like, ‘Have you heard of this company Wonderschool that Chris Bennett was starting, and I was like, ‘Holy shit, I know Chris.’ ”
According to Bennet, Nichols reached out about the opportunity on Facebook Messenger. After the initial conversation and assessing some direct competitors, Nichols says Wonderschool was ultimately the right fit for Cross Culture’s portfolio.
Fittingly, the startup’s origin also has its roots in SV networking.
“I used to go the TED conference every year,” says Bennett. “I met a woman who told me that early childhood education was really important [ … ] She said, ‘A lot of the skills I use today as a CEO, a lot of those seeds were planted before the age of five.’ I thought that was a really wild idea. I started doing research and realized there was a shortage of childcare in America.”
Bennett cringed slightly when we started the process of showing off the company’s early deck. The first thing that jumped out at all of us was just how bare bones the presentation is: white text on a blue background, largely made up of bullet points. There’s not flash — or even graphics — to be found in the entire thing. And the CEO adds that honestly, not much changed aesthetically between that first pitch and the Series A deck.
“It aligned with what we were valuing at the time,” says Bennett. “We were really focused on getting the product-market fit and really trying to understand what our customers needed. And we’re really focused on building the team.”
Perhaps there was something to it, however, as Wonderschool managed to raise $20 million for the latter.
“I think you have to represent what you’re trying to build,” says Nichols. “You’re trying to convince someone to part with their dollars and put them into this thing you’re building. So, the deck should be reflective of that. You can have fancy graphics and all of these things, but that doesn’t necessarily make it more professional.”
There were, however, some important changes going into the Series A pitch.
“We had a lot of traction going into our Series A,” says Bennett. “There were a lot of questions folks had around quality of childcare and how we solve for safety. There were also some questions around what were the different revenue line items that we could generation. [The early deck] was a lot more about here are the facts, and this is the opportunity. The Series A pitch was more of a story. I told much more of my personal story.”
The simplicity of the initial pitch was due, in part, to the fact that the company was approaching investors who, like Nichols, were already familiar with Wonderschool’s founders. The Series A, naturally, was going to be a much heavier lift, both in terms of the dollar amount the company was seeking and the fact that the founders were reaching outside their personal circle, requiring additional insight about the people behind the company.
Nichols adds that his interest in the early pitch wasn’t just a result of his conversation with Bennett. The early-stage company also had something tangible to bring to the table beyond a simple pitch deck.
“Before actually launching the company, Chris and his co-founder at the time actually piloted the concept and had real results to show, which made it clear that they were onto something, because they had the data,” says Nichols. “If I can give entrepreneurs one piece of advice, it’s that you want to build as much as you can, as early as you can and come to the table with some form of metrics — even if they’re super early. It’s more tangible, believable.”
As Bennett alluded to earlier in the conversation, he had no formal background in childcare prior to starting Wonderschool. When it comes to something as sacred as early childhood learning and care, how important is it that a startup’s founders are deeply versed in the subject matter?
“When you have those gaps in knowledge, you can recruit folks to support you,” says Bennett. “I’m not an engineer and one of the core components of Wonderschool is a really strong product. I’m not even a product manager — I don’t have a trained background in product. So, the way I think about the company is I’m always looking for where are the gaps within the leadership or the company or within me, and filling those gaps by getting the right person on the team.”
“To be honest, one of the competitors to Chris’s company had [childcare experience] in spades,” adds Nichols. “What he didn’t have was a very clear and proven track record of being thoughtful about building a business, about attacking a problem. It was very clear to me at the time that Chris had done a ton of research to come up to speed quickly on this problem. And he had a created a somewhat unique approach to solving it — and went a step further and tested it, using his dollars and his resources.”