this is me pitching my business idea to over 800 investors this exact presentation helped me raise two million dollars from the investors in this crowd alright so for those that don't know my name is Kong and I am the founder and CEO of a company called jump cut today I'm gonna show you that entire pitch and break it down step-by-step so that if you ever need to pitch investors for tens of thousands of dollars or even millions of dollars you will be much more knowledgeable because you've learned from my mistakes first let me give you a little bit of context so at this point it was 2016 I had a business idea that I really believed in and I needed investor money to fund my team at this point I was already pretty successful with a bunch of YouTube channels and I had some income coming in from that business but this new idea that I wanted to pursue would need a ton of capital more money than I had saved up in my bank account at that time so without investor money this business wouldn't be able to grow nearly as fast and probably wouldn't have even survived a few months basically if I didn't raise this money my business would die the only way I'd be able to succeed is if I convinced a bunch of strangers that my idea was worth their money and that's what I set out to do so in August of 2016 I had the opportunity to do something that most entrepreneurs can only dream of the opportunity to pitch 800 investors at once I only had one chance at this so I knew I had to get it right and if you're wondering how I even had that opportunity it's because I had the privilege of participating in a startup accelerator called Y Combinator if you don't know what that is I'll leave a link in the description if you're curious to learn more but for the sake of the story all you need to know is that it's a three month program where a ton of successful entrepreneurs people who have already sold their business for hundreds of millions or even billions of dollars help you grow your startup and at the end of the three months they hold an event called demo day where all the startups in the program get up on stage and pitch their company to hundreds of investors if any investors are interested in any of the startups they'll reach out to the founders to take one or two follow-up meetings and then a decision on whether or not they want to invest in your company so basically getting this pitch right was crucial because the quality of this pitch would directly impact how many people would be interested in investing in jump-cut and ultimately whether or not I'd be given a shot at pursuing this idea that I was passionate about so for weeks I researched everything I could find about successful business pitches I didn't watch previous YC founders on youtube I wrote and this isn't a joke seventy two different variations of the pitch and on top of all that I pitched you every single one of my friends at least wants to get feedback and at the end of the day it all paid off so now I'm going to show you that entire pitch then break down each section and tell you the thought process behind each one so without further ado here's the pitch that led to nearly two million dollars in investments into jump-cut 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 we launched four months ago and are already at eighty five thousand dollars of monthly subscription revenue growing at a hundred percent month-over-month our users pay $17 a month which is more than netflix and 90 percent of them continue to stay subscribed every month if you buy an online course anywhere else right now what you'll get is this guy a dry and uninspiring instructor who talks at the camera for hours on end if you're lucky he might include a PowerPoint now the reason why this is so silly is because we're in 2016 we have the ability to create avatar The Dark Knight Game of Thrones yet when it comes to something as important as education the best that we can do is this this is why course completion rates across the entire industry are at 10% at jump cut our course completion rates are 65% that's because we utilize storytelling soundtracks and cinematography to make each course feel like a movie my co-founders and I are the perfect team for this because we are viral video experts on YouTube alone we have over half a billion organic views so it's easy for us to create captivating content and get users on top of that we've previously scaled our last video subscription company to over 2 million dollars in annual revenue so we've done this before and now we're taking our experience to change the way that people learn we're starting with professional development courses such as social media the art of networking how to build your brand's last year 32 billion dollars was spent on online courses in this space but I could just be pulling this number out of my ass the easier way to think about it is that Linda built a 1.5 billion dollar business by recording people reading PowerPoint presentations our courses our courses are six times better than theirs and we're only four months in so to summarize we create courses that feel like movies we're already at a million dollar run rate in four months and 90% of our customers stay subscribed month over month now if you want to see an example of what the coolest course in the world looks like come see me afterward thank you alright so looking back it's pretty remarkable that those three minutes are what resulted in me being able to raise two million dollars now before I get started on breaking down the entire pitch keep in mind that for most people you're not going to be pitching in front of hundreds of investors for most people you're probably going to be pitching one investor over coffee or maybe a group of investors in their office now while that happens some investors will just let you say the whole presentation and then ask questions after some will interrupt you during that presentation and say hold that slide I have a few questions for you and they're gonna do it that way so I'm gonna break down this pitch with that in mind so that all of the takeaways of this pitch can be applied to your particular situation in the future as well all right so let's rewind to the first part and break it down hi I'm Cong CEO of jump-cut we make online courses that feel like movies imagine if Khan Academy courses were directed by Steven Spielberg one thing that many people gloss over are the first few sentences of their pitch so these first couple of sentences feel insignificant but it's actually extremely important as an entrepreneur you have to be able to communicate what your business does clearly and concisely within one or two sentences think of this as your 10 second elevator pitch if you're not clear within those first 10 seconds people will be less curious and excited to hear what you have to say next this is super in when you're networking when you're trying to get customers and in this case when you're trying to raise money from investors this is how they will remember you so you have to make sure that it's as simple as possible now many people like to over complicate things here and make their idea sound super impressive like my company creates virtual classes that empower students by utilizing psychological strategies found an oscar-nominated traditional cinema something like that might sound cool to you but nobody knows what the that means keep it simple so simple that your grandma would be able to understand it the goal of the 10-second elevator pitch is not to have people understand your entire business the goal is to get them interested and curious enough to ask more questions but if you make it too complicated or hard to understand they're just gonna say cool and probably walk away so for me I went with courses that feel like movies now inherently this is kind of hard to imagine since the product itself is very visual in nature so I added another sentence as well imagine if Khan Academy courses were directed by Steven Spielberg now keep in mind that nobody can actually imagine what that looks like unless they're in the creative video industry themselves but what I'm doing here is I'm taking two things that they are familiar with Khan Academy and Steven Spielberg and using those two things to amplify the idea to amplify the vision of the company and get investors curious to learn more we launched four months ago and are already at 85 thousand dollars of monthly subscription revenue growing out a hundred percent month-over-month there are a lot of conflicting ideas out there about what to put as your second slide but in my opinion you should always lead with whatever is the strongest point of your pitch if you're pitching an investor over coffee or at their office think about what their day looks like they're doing five to ten of these kinds of meetings per day it's monotonous it's easy for them to mentally check out as soon as they see a boring point in your deck so you need to constantly working hard to keep their interest and attention in my situation there were 45 other companies presenting on stage as well so I needed a way to stand out from everybody else knowing this I decided to go with our revenue numbers because the vast majority of companies in Y Combinator either had significantly lower revenue numbers than us or had no revenue at all which is actually not uncommon in startups most new startups were struggling to find initial customers but my team and I didn't really have this problem because I was still making youtube videos at the time and I promoted jump cut to my YouTube audience so I used this to my advantage and put this as the second slide our users pay $17 a month which is more than netflix and 90% of them continue to stay subscribed every month this is one of the mistakes that I made in this presentation at the time we had a 10% churn rate which means every single month 10% of people were unsubscribing from our product back then I thought that this was a really impressive number however after having follow-up meetings with investors after this presentation I realized that it was actually pretty weak for a subscription business investors want to see a lower than 5% churn rate and just for context Netflix's churn is about 3% now given that we had just launched a few months ago 10% is not the worst thing in the world but it's also not something to really be proud of definitely not something worth putting so much emphasis on so if I were to go back in time here I would either put this slide toward the end of the presentation or maybe even cut it out altogether and let them ask me about it during a longer follow-up meeting if you yeah I don't know what happened there i misclicked happens by an online course anywhere else right now what you'll get is this guy a dry and uninspiring instructor who talks at the camera for hours on end if you're lucky he might include a PowerPoint now the reason why this is so silly is because we're in 2016 we have the ability to create avatar The Dark Knight Game of Thrones yet when it comes to something as important as education the best that we can do is this so this part is the beginning of our problem solution as you probably know every business that exists is a solution to some problem that people have so to help investors understand your business you have to tell them the problem that you're trying to solve and then present your product as the solution for us the problem was pretty easy to communicate because most investors already know that online courses suck as I mentioned later in the presentation most online education platforms only see a 10 percent completion rate on their courses this is a pretty commonly cited statistic in the industry so most investors are already familiar with it but it's not just enough to explain the problem that you're trying to solve you have to make investors care about the problem you have to make them agree that this is an issue that needs solving so I amplified this problem and made investors feel the pain by contrasting how boring current online courses are to epic cinematic movies that they know of I'm not just saying that hey look there's a problem course completion rates are 10% I'm amplifying it and illustrating the problem by communicating that humans are capable of so much when it comes to entertainment and it is atrocious that we haven't applied this to education this is why course completion rates across the entire industry are at 10% at jump cut our course completion rates are 65% that's because we utilize storytelling soundtracks and cinematography to make each course feel like a movie I did a lot of practice pitches before this one and one thing I realized was that it's incredibly hard to describe in words what a cinematic online course would look like think about if you had to explain what makes a good movie right it's usually not just one thing that you can point to it's a lot of things combined together on top of that every movie has their different strengths and weaknesses just because one movie is really good with one aspect of things doesn't mean another great movie isn't going to have that same strength so there's no single correct answer there's not one way you explain what a cinematic online course is one of my ideas was to actually show an example of a lecture versus a jump cut course something like this the golden rule of viral videos is elicits an emotional response this is the key and this doesn't just applied to videos this applies to all content think about every phenomenal book you've ever read every great movie you have ever seen every song that's ever moved you all these things made you feel something and that's why you love them so much that's why you recommend them to your friends videos are no different the best videos elicit an emotion from you happiness sadness anger nostalgia hope inspiration think about your loved ones they share things with you because they want to share the experience with you they want you to feel the same emotions they felt it's one of the ways that humans connect with one another the golden rule of viral videos is [Music] elicits an emotional response this is the key and this doesn't just apply to videos this applies to all content think about every phenomenal book you've ever read every great movie you've ever seen every song that's ever moved you all these things made you feel something and that's why you'll love them so much that's why you share them with your friends videos are no different the best videos elicit an emotion from you happiness sadness anger nostalgia hope laughter inspiration think about your loved ones they share things with you because they want to share the experience with you they want you to feel the same emotions they felt it's one of the ways that humans connect with one another as you create your content ask yourself this important question unfortunately we had a time limit on the presentation and that would have taken too much time I was also advised not to put any videos into the presentation because it's very likely that the program is going to crash if there's video embedded so instead I decided to show this slide first and prove to the investors that our solution our product works while the industry gets 10% completion rates we get 65% after that I only give a high level version of what we do we utilize storytelling soundtracks and cinematography it doesn't really matter that they can't visualize it at this point because they already know that it works six times better than the industry average so while showing them what we could potentially do would be better here it just wasn't possible instead I felt like the next best thing to do was to just tell them that look this is already working and this gets them to think whatever these guys are doing it must be amazing my co-founders and I are the perfect team for this because we are viral video experts on YouTube alone we have over half a billion organic views so it's easy for us to create captivating content and get users on top of that we've previously scaled our last video subscription company to over 2 million dollars in annual revenue so we've done this before and now we're taking our experience to change the way that people learn this part is about my founders and myself basically why we are the perfect team for this particular startup I made a video a couple weeks ago where I explained the importance of product founder fit this slide basically explains that to the investors one thing to note here is that when investors are evaluating early-stage startups this is one of the main things that they look at whether or not you in particular or you and your team would be great founders for this particular business idea the reality is that no matter what your initial business pitch is you're inevitably going to need to pivot and make changes to your business you're going to iterate on your business idea and what it is today is not going to look like what it is in five years so these investors want to be convinced that you will be able to figure it out as your business evolves Airbnb started out as a website where you can just rent out air beds from people eventually it turned into something where you can rent entire houses from people some startups completely change their idea into something else like Twitter which used to be a podcasting platform called OTO solook investors know that your business plan is going to change in fact they know that your business might pivot to something completely different than your original product that you pitched and that's why for an early-stage startup they need to be confident about you just as much as they are about your product we're starting with professional development courses such as social media the art of networking how to build your brand's last year 32 billion dollars was spent on online courses in the space this slide shows investors how big your market is the bigger your market the more potential your startup has to eventually make tons of money now there are a couple ways to calculate your market size and if you find yourself meeting with an investor over coffee you should actually know these numbers pretty well because they'll want to discuss it with you I won't go into it in this video so I'll leave a link in the description for anyone who's interested in it for the sake of this presentation I don't need to show them how I did the math I just need to prove to them that this is a huge market now keep in mind that every single startup has the slide and it has some huge number on there like this is a hundred billion dollar industry and we're gonna get like 1% of it so I wanted to do something more memorable here I wanted to amputate it is that Linda built a 1.5 billion dollar business by recording people reading PowerPoint presentations our courses our courses are six times better than theirs and we're only four months in a few months before I made this pitch a site called lynda.com sold to linked-in for about 1 billion dollars pretty much every investor knew about this so I used it to make my point they were able to sell for a billion dollars by selling power points now he's that an oversimplification of what Linda does of course the investors know that too but again I'm amplifying the point here so that it becomes more memorable I also mentioned that our courses are six times better than theirs so I'm creating an open loop in their mind and almost planting a seed that gets them to think okay if Linda sold for a billion dollars ants jump cut is six times better than them then jump cut could potentially be worth six billion dollars someday I also haven't joke in there as well that Linda equals ambien this is kind of similar to The Daily Show or John Oliver where the host says one thing and then there's a hidden joke on screen Johnny Depp I'm sorry sorry that's just a fedora atop a part of greasy hair actor Johnny Depp sorry that's just a trash bag full of scars in hindsight I actually wish I had two or three of these in the presentation I think it would have made it much more entertaining and I want to emphasize again that that is another example of amplifying something calling Linda this prescription drug that puts you to sleep so to summarize we create courses that feel like movies we're already at a million dollar run rate in four months and 90% of our customers stay subscribed month over month now if you want to see an example of what the coolest course in the world looks like come see me afterward thank you all right so at the end here I give my three best points that I want them to remember so again keep in mind that these investors are literally watching 50 presentations over two days they're not going to remember every single fact so by adding this slide in I'm telling them here's what you should remember and as I mentioned before this 90 percent number is not as great as I so I would have put something else here but Matt what are you gonna do sometimes I make mistakes now you also probably noticed in that clip that I say come see me after obviously this is very particular to my situation and why cease demo day basically every hour or so they have coffee breaks where investors can talk to founders and just get a conversation started because our product is very visual in nature I actually stood out in the lobby with this big iPad and $400 noise cancelling headphones to show them the same example that you saw earlier after this presentation we had over 200 investors interested in taking a meeting with us so for five weeks straight my co-founder Peter and I took back to back to back to back meetings every single day with various investors this is what my calendar looks like during that time it got so crazy that you'll notice we had to take meetings on Saturdays and Sundays too it was one of the most mentally and emotionally taxing times of my career because every single meeting I was pouring my heart out about this grand vision and and how I'm going to change the world and most investors basically said sorry I don't believe in you I'm not gonna invest anyway I'll save that story for another time if you're interested in hearing it hit the like button so I know you're into videos like this in the end though after nearly 200 meetings we finally got a small handful of investors who believed in us and in total invested one point eight five million dollars into jump cut the check sizes range anywhere from twenty-five thousand dollars all the way up to five hundred thousand dollars so after that whole experience here are my top three tips for a great pitch for when you decide to raise money yourself keep in mind that unless you go through a startup accelerator like Y Combinator you're probably going to be doing your pitch one investor at a time most likely over coffee as I mentioned some of them will let you do the entire page to then ask questions some of them will interrupt your pitch to ask questions as they come up so just be prepared for that with that said these tips are universally enough to work in those environments as well so tip number one get as much traction as you can without investor unless you're a successful entrepreneur who has sold a company for a billion dollars before it's incredibly hard to raise money without some sort of traction whether that's users on your app or better yet revenue if you have a ton of traction and your metrics check out then investors will be begging to invest in your business tip number two have a simple clear concise 10 second elevator pitch for your business not only will this help investors understand and remember what your product is it also forces you to simplify your product and focus on the most important thing tip number 3 amplify amplify amplify look it's important to present logical points to pitch your company but it's also important to get these investors emotionally invested to make them feel the pain of the problem you're trying to solve get them excited about how your product is going to change the world enlighten them in a way that gets them to think about things from a different perspective so those are my three biggest takeaways from that experience I hope that you found this helpful if you have any questions at all about the fundraising process Y Combinator or anything like that feel free to leave a comment I'll be answering them for the first couple of days of uploading this video just make sure you hit that like button first if you haven't already also make sure you subscribe to this channel for more stories and lessons from my entrepreneurship journey and with that said thanks for watching I'll see you again soon [Music] you