Writer and Entrepreneur
The GrooveBook pitch was one of my favorite pitches to date. There are several elements in it that truly provide entrepreneurs keen insight into both building a business and successfully closing a deal with investors.
One thing that truly impressed me about Julie and Brian Whiteman was their knowledge of their business. They knew all of the numbers that an investor likes to see when assessing any investment opportunity.
With a cost of $2.99 per month for their photo subscription service, their cost of $2.30 left them with $0.70 profit per book. However, even with 18,000 subscribers in 8 months, they were still losing cash. With this business model, it would take 30,000 monthly subscribers to break even on their $21,000 of cost each month, with a profit of $0.70 per subscriber per month there after.
Another thing that impressed me was their commitment to this business. Having invested $400,000 of their own money, their passion for the business was quite apparent. Their ask of $150,000 for 20% of their business wasn't pulled out of a hat; it was well thought through and appropriate.
