The low-down Hide
As a founder without proven traction, you’ll need to appeal to one essential criteria investors apply in their decision-making: your value as a founding team.
By drawing on your powers of storytelling, you can trigger an emotional engagement that moves potential investors into a space of confidence.
The story you tell in your investor pitch should not be a laborious history of your company’s inception. It shouldn’t be dramatised or overblown. And it should always be tethered by facts, figures, data, and numbers to keep it grounded in the real world.
Here are five things to keep in mind when building your startup pitch story.
Storytell, but not like a screenwriter
Investors are not just investing in a company or an idea. They’re investing in you as a team. Colour your story with personal anecdotes and experience. Weave in your connection stories to your co-founders and your thoughts on why they’re so right for the job to cultivate trust and belief.
If you don’t have hockey stick-shaped growth graphs to show, use excerpts from customer interviews. Build a narrative around what’s working in your favour: your team, feedback from beta users, and a demonstrable MVP.
Remember: pre-revenue, a lot of your “story” will be based in the future. The trick is staying as close to the realm of facts as possible. Every point should be derivative of a fact, not a pie in the sky. Every plot line should be traceable back to the existing data points you do have.
This should be enough to foster the emotional investment that comes before the physical. But there’s one storytelling rule that doesn’t apply: building to a climax.
Don’t keep your investors in suspense. There shouldn’t be a punchline, twist, or big reveal. Lead with the most important information: the product. In professionally written PR pieces, the first paragraph comprises the who, what, when, and where. Start with a summary, and then elaborate as needed.
Name the other players
You’re not alone in the universe. Unacknowledged direct competitors will become the elephant in the room. Your company doesn’t exist in a vacuum, and will be affected by the industry-sharing companies that orbit you. Your company is the hero protagonist of your story. Your setting needs to include competitors as other players. And not necessarily as villains.
Acknowledging there are others out there doing the same thing as you doesn’t have to be a hindrance. Use their data to benchmark your position – the potential of the market, what you do differently, and how you do things better.
Don’t fall into the modesty trap
A salt of the earth brand that doesn’t blow its own horn can be a fantastic angle when marketing to consumers. See Ronseal, Levi’s, and Yellowtail wines for examples. These brands approach their customers with a laid back, down to earth modesty that sets them apart from their flashier, more arrogant competitors. But the founders didn’t walk into their investors’ boardrooms with this attitude.
It can be tempting to shun the status quo of startups. In contrast to the big ideas and bigger personalities, the ‘we’re just ordinary guys/gals with a lot of work ethic and a good product’ sounds like a refreshing take.
But the hard truth is: humble doesn’t fly in investment circles. Modesty can be read as a lack of vision, grit, confidence, or realism about the competition you’ll need to face. It can be interpreted as a misread of your investors’ intentions (‘what, you think we want to pour cash into a middle of the road solution?’). Worst of all, if your humble act is inauthentic, you’ll instantaneously lose trust.
Speak your investors’ language
If you have a highly advanced technological or scientific product, you need to find a way of communicating the core principle to a room of investors from varying backgrounds in less than 5 minutes. If they don’t grasp the core principle within that time, you risk mass zone-out.
This can be one of the most challenging parts of pitching. If you’re in blockchain tech, find alternative layman terms for the more technical terms you need to use. If you’re a brilliant programmer but you’re not good with words, get help from someone who is. Spend as much time as it takes with a wordy friend explaining your concept at length, then get them to explain it back to you. You might consider hiring a copy specialist if you’ve got the budget.
Adapt your story for different listeners
A conventional investor pitch will give 30 minutes (usually with 10 of those for Q&A). This is ample time to weave a compelling narrative. This longer-form story forms an excellent source for abridged material. Start there, then extract key nuggets for smaller interactions.
Consider also the personalities present. Early angel investors are likely to buy into an inspiring founder journey. VCs might value a more data-driven approach. An expert in your field will be happy to handle technical lingo (and may even feel patronised if you leave it out).
The ability to stand in a boardroom and sell a startup is not something we’re all born with. It’s a skill that can be learned. With every investor pitch, your storytelling will get stronger.
While you’re learning, here are three actionable pointers to keep in mind:
- When the meeting opens, don’t start with the technical jargon and follow up with “what that means is…”. Start with what it means, then deliver the techie stuff if necessary or if asked.
- Know who you’re meeting ahead of time, and tailor your analogies and examples to their field of knowledge.
- Remember: investors don’t necessarily need to know how it works. They need to know you know how it works.