Interview with Danielle Lewis, co-founder and CEO of Scrunch
Posted 4 years ago
Seeking investment for your business can seem daunting – where to start? Who to speak to? What should your pitch include?
We spoke to Danielle Lewis, co-founder and CEO of Scrunch, and asked her to share her personal experience pitching for investment and seeking capital to grow and scale her business.
Tell us a bit about yourself and your business.
Hi! I’m Danielle, Co-founder & CEO of Scrunch. My story starts out pretty much like everyone else. I did well in high school, went to uni, got a full-time job, and started saving for a house….. ticking all the boxes. I had absolutely no one in my life who ran a business, so I never thought of it as a possibility.
My background is in corporate sales, actually sales anything! I’ve been in sales my whole career from retail, small business, enterprise, eCommerce, wholesale… you name it I’ve sold it. And then the story changed (super corny!) after I read The Four Hour Work Week by Tim Ferris. I discovered online business and became absolutely obsessed.
After building a lifestyle blog, all the way back before Instagram, I met the co-founder of Scrunch and we began a wild tech startup journey. After several major pivots, we finally struck gold with an idea to build an Influencer Marketing platform just as Influencers were rising in popularity, about 7 years ago.
Scrunch is now a global analytics and education platform for Influencer Marketing. We’ve taken a data-driven approach to Influencers and given brands and agencies access to over 20 million Influencers across multiple channels with audience insights and organisational tools to make running in-house campaigns super easy.
In a recent Female Founders workshop, Aysegul Kayahan from Brisbane Angels mentioned your pitch as an example of how to pitch well. When did you pitch to Brisbane Angels?
We first pitched to Brisbane Angels in 2016. Fortunately, by that time we had settled on the Influencer Marketing platform so we pitched Scrunch with exactly the platform we are today. Aysegul and the Brisbane Angels have been able to see us evolve and grow in the same industry since they first invested.
How did you get an invitation to pitch?
At that time, we were out in the market talking to A LOT of investors. One particular individual I was pitching to only invested through the Brisbane Angels entity, so they made the introduction. We were then invited to pitch to the broader network.
It was a good testament to the fact that your network is everything when you are raising capital!
In the early days, a lot of your outreach to investors will be cold, and that’s ok – it still works. But if you can, always ask your investors or mentors to introduce you to anyone they think is relevant. A warm introduction can open doors to some individuals or organisations who won’t take cold pitches, and you will build up your network over time.
“Your network is everything when you are raising capital!”
What did you include in your pitch deck?
Our pitch deck always included the problem we solved, our growth and traction to date, and our financial projections. However, we did have to spend a little more time on storytelling as the concept of Influencer Marketing was quite foreign to a lot of investors at the time. It was important for us to break it down and make the concept relatable and understandable to the audience.
Everyone will have feedback on your pitch deck no matter what format you use, and it’s easy to spend a lot of time updating your deck to try and suit everyone. My advice is to have a short and a long version of your pitch deck so that you can easily adapt it and refer to other slides depending on your different audience needs.
Just don’t get trapped spending heaps of time updating a deck for an investor that’s just giving you ‘advice’ and doesn’t plan on investing.
“Have a short and a long version of your pitch deck so that you can easily adapt it
and refer to other slides depending on your different audience needs.”
How many times did you have to pitch before you secured investment?
For the Brisbane Angels pitch, we had to pitch to the group twice to secure investment. However, that was part of a larger round, so during the round itself, I pitched hundreds of times to other individuals and groups.
Landing your ideal investor in the first shot is pretty rare, especially if you don’t have an established network yet. Back in the early days of Scrunch we treated capital raising like a sales process, identifying all of the potential investors in the market and working our way through connecting, building a relationship, and pitching to each and every one.
Yes, it’s hugely time-consuming and energy-draining. But if that is your capital strategy, it’s just something you have to do. It can take a lot of your focus and time away from the day-to-day running of the business, so make sure you are ready for that.
What did you learn from the experience of pitching?
The biggest thing I learned from pitching is that most investors expect a similar format and have similar questions. I remember I would write down each of the investors’ questions after each meeting, and I would start memorizing really strong answers to those questions. By the end of it, I could answer most of those questions clearly, accurately, and succinctly, and I knew a lot more about my business.
How did you use your investment money?
Being a software product, the majority of our capital was deployed into product development and a small amount into sales and marketing. In hindsight, I would have adjusted that to 50/50 but everything is a learning curve in startup land!
In your opinion, what makes a really excellent pitch?
Confidence, and knowing your numbers.
If you are serious about capital raising you should practice and perfect your pitch just like you would prepare for an important sales meeting or a public speaking gig. When you know your content you can relax, and your confidence grows.
Know that there will ALWAYS be hard questions about your financials, so having an intimate understanding of where you are at, where you plan to be, and exactly how you’ll get there is critical. Take the time to really dive into your financial information, talk to your accountant, and trawl through the projections and statements and spreadsheets until you know everything inside-out. You’ll be glad you did.
“There will ALWAYS be hard questions about your financials, so having an intimate understanding of
where you are at, where you plan to be, and exactly how you’ll get there is critical.”
For Female Founders about to embark on their first capital raise, what’s your advice about how to get started?
My best advice is to know what you are in for. Capital raising is a full-time job, so getting organized early will save you so much time.
- Get your deck ready
- Have a dropbox folder with supporting materials (like financial statements, board packs, technical diagrams)
- Create a tracking spreadsheet to manage all of your conversations.
And if you haven’t seen it before, check out this map of the Australian investment landscape, it’s a great place to start if you don’t know which investors to approach!
You can find out more about Danielle and her businesses here: https://www.daniellelewis.io/about
For more information and resources about what investors want and preparing your pitch, visit Female Founders Learning Links
To apply for three free mentoring sessions with a business advisor (to help you prepare for investment), visit Female Founders Growth and Scale Mentoring