Three stories every startup needs to know when pitching

The big mistake a lot of entrepreneurs make when giving an investor pitch is failing to tell their stories. This is detrimental because no matter what business you are in you are also in the storytelling business. 

A compelling story is key to attracting investors time, money and energy and for that matter also new employees and customers. Here are three stories every entrepreneur must be able to give during an investor pitch.

The Vision Story: 

What is your future vision of the world? What is your version of the promised land? Avoid at this stage pitching your actual product. A good story only becomes interesting when there is a conflict. What is the problem or conflict and what would the world look like without this problem (aka your dream)? Pain and gain are the only two motivational drivers when we boil motivation into its most fundamental parts so dive deep into both the pain and gain in a broader sense.  

You must be able to create a fascinating narrative that the investors can see themselves being part of. In every good story there are certain elements and those should be included in your vision story.

A conflict is the foundation. Furthermore, you must have a hero and a solution. Can you create a vision story where the investors can become the hero (we all love to be the hero don't we)? Share your vision story and let them know you need help (aka investors being the hero that saves the day). When telling your story make sure you paint pictures and speak to our senses (e.g. smell, sound and sight) because if we can’t see it, hear it or smell it it is not there! Make it inspirational. Make it exciting. Make it a no-brainer to support your vision!

Here is an amazing quote from Howard Schultz (founder of Starbucks) which shows the difference between a simple product such as coffee and the power of a vision story. 

“We’re not in the coffee business.  It’s what we sell as a product but we’re in the people business—hiring hundreds of employees  a week, serving sixty million customers a week, it’s all human connection”.

The Team Story: 

The truth is that investors will invest just as much in the people (if not more) as in the idea. Imagine a great business idea with a mediocre team Vs. a mediocre idea with an amazing team behind it. Who do you think has the highest likelihood of succeeding and where would you put your money, time and energy if you were an investor? Most likely, you would put your money on the better team despite the idea being mediocre.

So how can you tell your team story? Here are three must have points that should be included in your team story:

1. Let them feel your PASSION: Talk about why you are passionate about the idea? Let them feel your passion. Share a personal story. Maybe you, a family member or someone else close to you experienced hardship and at some point you became obsessed with solving the problem. It is much easier to convince the investors that you are ready to work 10-12 hrs a day 6 days a week if they can feel your passion.

2. Share past FAILURES: Share your past failures. No one is perfect and neither are you, but by sharing your imperfections you become highly likeable. We love to do business with people we like so that is one reason why I recommend sharing your past failures. Furthermore, by sharing your failures everything else you share becomes more credible. Final reason why sharing your failures is a must is because it shows that you learn from your mistakes. 

3. Share your STRENGTHS & WEAKNESSES: Share your strengths on the team and the areas where you lack some skills and competence. This will help you match up with investors not only for capital reasons, but also for getting some valuable mentoring and advice from your investors. Knowing your weaknesses is a major strength so don’t be afraid to show drawbacks in your skills.  

The Sales Story: 

Let’s assume the investors love your vision of a better world and they think you are a great person! However, no business can survive on only good intentions and good relationships. Therefore you must show them how your team can materialize your vision into money. 

The sales story could be built around a typical day for a person in your target market. You tell the investors where the customer encounters their problem, how you get their attention, make them buy your product and how they end up becoming life-long fans of your brand/product and buy again and again. During your story you share why you are better than all the others (Your Unique Selling Proposition). Your USP is NOT that you have a great team, lots experience or that there is a big market. No, your USP is about your idea – why is your idea superior to others? Talk about the idea and be specific about how it solves the problem for the user better than any other product.

Summary

Share your vision story, team story and sales story in a compelling manner and you are increasing your odds of successfully closing the investor pitch. Don’t be too frustrated if you get a no because typically only 1% to 2% end up making a partnership after an investor pitch, but with these 3 stories you are well-equipped to rather sooner than later succeed. Do also remember that investors are humans too and make mistakes so don’t give up right away if they don’t believe in you. 

I would love to hear your take on my article - agree, disagree, points to add etc? Let's help each other by sharing our knowledge through a fruitful positive discussion and sharing points of views.

Best of luck with your investor pitch!

Asger Lindholdt