Allison Byers set out in 2020 to build Scroobious, as she aimed to meaningfully increase capital to diverse founders and provide a true resource, and it has blossomed to become a leading pitch deck development platform.
Pitch decks can be one of the most challenging hurdles for a founder to clear when raising capital, as founders attempt to have their concept/business stand out from the crowd and truly resonate with an investor.
Founders have often been left in the dark in regards to guidance and valuable feedback where they can help make their pitch, or process, more concise and appealing, but Scroobious is here to help.
“While Scroobious is a technology platform and marketplace, we work hard to offer our members as many opportunities as we can to get direct feedback from active investors while they are refining their pitch material” Byers said of Scroobious, in an interview with NFuzer. ”
We have been running in-person pitch practice sessions with our founders and fund managers in collaboration with our partners at SVB and the Emerging Venture Capitalists Association (EVCA), which are incredibly valuable opportunities to get feedback in a friendly setting and to establish new connections.”
“We wanted to create a similar space for founders and angel investors without regional restrictions, so we launched our virtual Pitch Studios. Each month we bring together five founders and five active angel investors in an authentic space for learning, growth, and connections. The Pitch Studio is NOT a live pitch for investment. Our members present five-minute pitches for the purpose of receiving direct, helpful feedback in a safe space. After the pitches and feedback conclude, our members stay on a bit longer to digest and interpret feedback received with each other and our team. We share contact information after the event and encourage participants to continue discussions.”
Scroobious has proven to be a benefit for founders, and offers a solid tool for tacking the challenging process of building and presenting a pitch deck.
A pitch is unlike any other presentation a founder has to give. It is intuitive to sell your solution to a customer or partner. It is not intuitive to sell the opportunity for your solution to return profit to an investor. An investor might never be interesting in buying what you’re selling, but they may see the company’s vision and the investment opportunity.
“Many founders have never been an investor themselves, and first-time founders have no experience creating and delivering a pitch to this audience” says Byers. “If you can’t understand how your audience thinks, it is extremely difficult to create a presentation that will be compelling to them. We’ve worked with over 400 founders in the past few years and here are three common mishaps we see in early stage pitch material:
- Missing origin story. At the early stage, the founder CEO is just as important, if not more, than the business itself. The investor is entrusting the founder as the steward of their capital, which makes it critical to understand why the impetus for starting the company. There is a big risk that when it gets really hard, which it inevitably will, that the founder will walk away or stop caring enough to make good decisions. Starting a pitch with the founder’s origin story – what made you decide to start this particular company – is not only powerful, but it provides critical information for the investor.
- Confusing narrative. Investors spend three minutes on average looking at a pitch. That is not much time. A pitch needs to have a clear narrative that walks an investor through the story of your opportunity. We often see pitches that meander. It will start talking about the solution, then the market, then the problem, then the solution again, and around in circles. Each slide should fall into a section and the sections should be arranged to tell a story. We have a core ten framework on our website and in our platform that tends to work well for most early stage investors.
- Top-down market size. Market sizing is a huge challenge for founders and we see this mistake all. the. time. A top down approach comes from secondary research, which often sounds like, “Industry spend is $XB and if we get 1% it’s this much.” This approach is not compelling because it isn’t specific to your business. There’s a whole lot of spend in there that has nothing to do with what you’re selling. Investors use a bottom-up approach, and so should founders. We teach how to do this in our platform and run workshops just on this topic all the time. A bottom-up market size takes into account your actual customer segments and your business model to calculate your revenue opportunity in the form of TAM, SAM, and SOM.”
Allison Byers is motivated to continue to build Scroobious and feels the platform is important for the industry.
“I experienced intense gender bias while raising nearly $10M for the medical device company I helped launch and co-ran prior to Scroobious” Byers explains. “After that company was acquired I researched the space of fundraising and capital allocation at first to understand if what I went through was common, and then I couldn’t stop going down the rabbit hole of data highlighting the extreme inequity in the space.
Entrepreneurship is a foundational method for building generational wealth and growing a region’s economy. To date, venture capital has been the primary funding vehicle for entrepreneurs. The allocation of venture capital to underrepresented founders has not changed in decades, and we cannot expect it to meaningfully change in the near future. Emerging fund managers are doing important work, but they currently suffer from the same bias phenomenon as diverse founders in that they are unable to raise comparable amounts from limited partners. Some are pushing for important regulations and legislation, but this is an arduous and long process.
Angel investors are a massive capital class and diverse founders represent a nearly unfathomable opportunity. There is a connection issue at play as angels are a fragmented market of millions in the US alone. Fundraising has not been viewed as an industry historically, but it is, and it’s an antiquated one. Scroobious and other innovative technology companies have the potential to transform how startups are capitalized, who gets to receive that capital, and who builds generational wealth.”
While Venture Capital investors dominated the headlines in 2022, particularly during the drop of Web3 properties, Byers points to the value of Angel investments as a launchpad for investors.
“Venture capital has been greatly romanticized and many founders think it is the only way to finance their business” said Byers. “However, venture capital is only one form of capital and there are others that founders should consider. Venture capital is often at odds with an early stage company’s need to moderate its pace of growth and the competing directives can have dire consequences.
A key difference between venture capital and angel capital is that general partners (GPs) of venture funds are managing other people’s money and their fiduciary responsibility is to their limited partners, or LPs. There is pressure for a GP to report fast growth to their LPs to signal a promising investment with a sightline to exit. This can result in artificially fast timelines for a startup that jeopardizes creating a stable revenue model and cashflow.
On top of that, capital allocation by venture funds is extremely inequitable with only 1.9% going to women, 1.5% to Latinx founders, and 1% to Black founders (Pitchbook). Funding to Black entrepreneurs went down by 50% in 2022. In Massachusetts, my home state, women only receive 0.9% of VC funds, with Black women getting a fraction of that. This means that if you’re a Black woman in the Boston area, you have a higher chance (4%) of winning a prize in the Mega Millions lottery than obtaining venture funding.
Angel investors are managing their own money and can decide to allocate their dollars however they like. They are also more diverse as a group and are more likely to fund diverse entrepreneurs. Angels invest $25B in startups annually; they are a real capital allocation class. If you’re an early stage diverse founder, you have a higher chance of raising from them than from a VC. Angel investors also don’t have the same return requirements or expectations that a fund does, which creates more patient capital. Many entrepreneurs can use Angel funds to build profitable businesses with a path to strategic acquisition or private equity buyout circumventing the need for venture capital entirely. ”
Scroobious continues their journey in 2023 and Byers aims to have the platform continue their impressive growth trajectory, while providing a innovative benefit and optimizing the connection between founders and investors.
- Sign up for investor portal waitlist: https://www.scroobious.com/
- Sign up for a pitch studio: https://www.scroobious.com/