Business Pitch Breakdown: Raising $2 Million for Jump Cut

Jul 21, 2024

Business Pitch Breakdown: Raising $2 Million for Jump Cut

Introduction

  • Speaker: Kong, Founder, and CEO of Jump Cut
  • Objective: To share the pitch that helped raise $2M from investors and to provide insights for others pitching their businesses.
  • Background: In 2016, had a successful YouTube channel but needed more capital for a new business venture.

Context

  • Pitch Date: August 2016
  • Venue: Y Combinator's Demo Day
  • Audience: 800 investors
  • Stakes: Without funding, the business would fail.
  • Preparation:
    • Participated in Y Combinator, a startup accelerator.
    • Created 72 pitch variations.
    • Practiced pitches with friends.

The Pitch

Opening

  • "Hi, I’m Kong, CEO of Jump Cut. We make online courses that feel like movies. Imagine if Khan Academy courses were directed by Steven Spielberg."
  • Importance of a clear and concise opening (10-second elevator pitch).
    • Avoid overcomplicating.
    • Goal: Get the audience interested and curious.

Strongest Points Up Front

  • Quick traction: Launched four months ago, $85K in monthly subscription revenue, growing 100% MoM.
  • Importance of leading with strong points to grab attention.

Subscription Details

  • Users pay $17/month (more than Netflix).
  • 90% retention rate.
  • Reflection: A 10% churn rate, in hindsight, not impressive for subscription businesses.

Problem-Solution

  • Current online courses are uninspiring and have low completion rates (10%).
  • Contrast with the cinematic quality of movies.
  • Jump Cut's solution: Courses with storytelling, soundtracks, and cinematography.
  • Jump Cut’s course completion rate: 65%

Team and Expertise

  • Founders’ Background: Viral video experts with half a billion organic views on YouTube.
  • Previously scaled a subscription video company to $2M in annual revenue.
  • Emphasis: Investors evaluate founders’ capability and product-founder fit.

Market Potential

  • Target Market: Professional development courses (social media, networking, branding).
  • $32 billion spent on online courses annually.
  • Unique comparison: Linda.com’s $1.5 billion acquisition by LinkedIn for PowerPoint presentations.
  • Implication: Jump Cut’s courses are six times better.

Summary Slide

  • Key points for investors to remember:
    • Courses that feel like movies.
    • $1M run rate in four months.
    • 90% monthly customer retention rate.
  • Invitation for further discussions.

Post-Pitch Experience

  • Result: Over 200 investors showed interest.
  • Process: Conducted nearly 200 meetings.
  • Challenges: Mentally and emotionally taxing.
  • Final Outcome: Raised $1.85 million.

Key Tips for a Successful Pitch

  1. Get Traction: Obtain as much user and revenue traction as possible before pitching.
  2. Clear Elevator Pitch: Craft a 10-second pitch that’s simple and easy to understand.
  3. Amplify Your Points: Use emotional hooks and amplifications to make your pitch memorable. Show the pain and excitement around your product.

Conclusion

  • Answering questions about fundraising and Y Combinator.
  • Encouragement to subscribe for more entrepreneurship stories and lessons.