This week I was invited to run a Storytelling workshop for Startup Investor Pitches.
Some investors hear up to two thousand pitches. In one year.
That breaks down to a dozen or more on the same day.
Why are some investor pitches memorable and others are quickly forgotten?
Startup founders are usually well prepared with slides full of statistics, but focusing on the numbers often distracts them from the most underrated investment criterion:
Them.
Why Startup Founders need to talk about themselves
Harvard Business School professor Amy Cuddy and team have done over a decade of research on first impressions. They have identified two questions foremost in people’s minds when they first encounter someone.
One: ‘Can I trust this person?’
And two: ‘Can I respect this person?’
The study found that even in a business context, trustworthiness was more important than competence.
As Warren Buffett said: You don’t want to hire someone with intelligence and energy if they are going to turn their gifts on you. The first criteria for hiring someone, then, is integrity.
Storytelling for Startup Investor Pitch
Of course an entrepreneur needs convincing numbers for their investor pitch.
If they’re good, they’ll arrange those numbers to tell a compelling story.
But there’s a third layer…
Something that can make a founder stand out to investors…
A ‘secret sauce’ of a pitch that will make the founder stand out.
They can tell their founder story.
Founder storytelling: Three Types of Founder Story
You have a vision. You’re on a mission.
But what inspired that vision and what fuels that mission?
It was my pleasure to work with 18 startup founders, intrepid entrepreneurs from Switzerland, India and South Africa.
The storytelling workshop helped the founders discover and articulate their personal mission and motivation. Over the course of the afternoon, with a questionnaire and exercises, I helped them get to the root of questions such as: When did they decide they wanted to devote years of their life to this problem?
In my storytelling work with startups over the years, I’ve observed that founder stories often fall in to one of three categories.
1) Empathy-Driven Founder Story
Now it’s personal.
Some founders are motivated by personal experience or witnessing the impact of a problem firsthand.
Key question: Why do you personally care? (Were you or someone you know affected?)
Example: One of my startup founders remembered the moment when her first test subject could move her prosthetic arm for the first time in years. This moment, along with the success of initial tests, convinced her to go all-in and focus on helping people with mobility problems after severe injuries. This made for a great founder story.
The empathy could relate to the founder and a target market, or between the audience and the founder. For example, Drew Houston built Dropbox because he kept forgetting his USB stick. The founding team developed a prototype to solve their own problem, and millions could relate.
2) Insight-Driven Founder Story
Inside job.
Some startup founders are fuelled by unique industry knowledge or a breakthrough realization. Many of these are university spinoffs.
Key question: Why are you the right person to solve this problem? (What experience or expertise led to you recognizing the opportunity/solution?)
Example: While most companies used to rely on gut instinct and snapshot data to improve workflows, the founders of Celonis leveraged end-to-end process mining to expose inefficiencies and unlock hidden value.
3) Ambition-Driven Founder Story
Davis vs Goliath.
Some entrepreneurs are motivated to capitalise on an opportunity others can’t see and outmanoeuvre established players or prove critics wrong. They thrive on proving that entrenched assumptions don’t hold true. Their underdog or challenger status is personally exhilarating for them.
Key question: Why is conventional wisdom wrong?
Example: Elon Musk ignored hybrid vehicles and set out to accelerate the transition to renewable energy by creating an high-end, electric sports car that would finance a series of increasingly affordable electric cars (Tesla).
Choosing a Startup Founder Story
Overlap is fine—a story can have multiple plotlines. The idea is to see what angle works best for each founder and startup.
Just like a pitch talks about product-market fit, so too we need to find the right story-startup fit.
Fundraising for startups is hard. With good storytelling, pitch marathons can become more fun and fulfilling — not to mention successful. For both sides of the table.
Thank you to ZHAW and VentureLab for having me speak and generously providing a copy of my book to each participant!
Whether or not you are a startup founder, you can tell a similar Origin Story that connects your personal to your organisational purpose.
This will help people connect with you, the messenger, as well as with your message.