Michelle Davey’s pitch to Jordan Nof of Tusk Venture Partners about Wheel, a startup focused on providing a full suite of virtual care solutions to clinicians, was front-loaded with early metrics. It may not be standard practice to start with the numbers, especially early on, but she explained to us why she chose that strategy — and Nof told us why it worked.
Davey and Nof joined us on a recent episode of Extra Crunch Live and went into detail on why Tusk was eager to finance Wheel, walking us through the startup’s Series B pitch deck and sharing which slides and bits clinched the deal.
Extra Crunch Live is a weekly virtual event series meant to help founders build better venture-backed businesses. We sit down with investors and the founders they finance to hear what brought them together, what they saw in each other and how they work together moving forward. We also host the Extra Crunch Live Pitch-Off, where founders in the audience can pitch their startups to our outstanding speakers.
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When to lead with traction
Davey emphasized the importance of not sticking to a rigid format for building a pitch deck. She said it’s important to instead focus on crafting your pitch around what makes you appealing and unique. That should be on the foreground and featured prominently.
For Wheel, that meant leading with traction, since the company had impressive uptake even early on. That remained true for their recent Series B raise, too.
“Typically, slide decks when you’re pitching, or at least your first 10 slides for your first pitch, follow a very similar structure,” Davey said. “But one of the tips that I have, it’s something I’ve done since the very beginning when meeting Jordan, all the way to our Series B is: [Emphasize] what’s that one thing that can really hook an investor, that really is exciting about your business? That may be the team you’ve assembled that can take and tackle this problem. For us, we were really in a position when raising our Series B where we had incredible growth over the year. And so we displayed that. We showed up front — this is why you should be excited to talk to us; we’ll tell you all about us later.”
When put into the proper context, what you emphasize early can signal attractive qualities about your company that might more or less win over an investor before you even really get to the details of what you’re trying to achieve.
“It’s not just about the big bolded numbers — it’s the relationships between the two,” Nof added. “I remember seeing the traction and noticing that, from a revenue run-rate perspective, that number was approaching, if not, at the time, already higher than the cumulative venture funding that the team had taken in to date. And to me that’s just screaming here is a really scrappy team that knows how to sell this product and get immediate traction in the market.”
Tell them what they need to believe
Another key tip, this time from Nof, was that entrepreneurs should always outline to investors what they need to believe in order to buy into the company and commit to an investment. Nof explains that this is always a key decision criteria for anyone on the investment side, but if they’re not told what they need to believe to be true for the company to work, then they’ll make up their own reason and judge based on that instead.
“The best way to illustrate this is just to tell an investor. You know, in my mind, I’m thinking, ‘What do I need to believe for this to become a multibillion dollar company?’,” he said. “And so just by laying out, ‘Here are the three things that you need to understand and believe in for this to be a business that you’re going to want to invest in,’ it takes a lot of guesswork out of the equation for the investor and it reorients them to focus on the right problem set that you’re solving. [ … ] You get this one shot to kind of influence what they think they need to believe to get an investment here, but if you don’t do that, by ourselves, in our Monday meeting, we’re gonna say what do we need to believe, and we could get pretty off base, so you want to kind of control that as much as possible.”
Davey laid out how she accomplished this for Wheel.
“We were proving that there had to be a different way, and that the status quo, where we were, it wasn’t going to scale, and that a marketplace, the business itself, and the business model was what was going to solve that,” she said. “You know, you could bring a lot of different business models to a market, you can bring many SaaS-based models or marketplaces, or you can call yourself a marketplace. But you should understand why it is that you chose that business model, and why it’s going to actually impact the problems and be the right solution to what you’re trying to solve.”