The Importance of Compelling Storytelling and Using Heart To Attract Investors
Bill Reichert, VC investor at Garage Ventures, offers his advice on how start-ups can grab the attention of investors and get them to understand your company and its product or service.
With investors receiving hundreds of emails and attending countless meetings and events every month, it’s not always easy to connect with them, let alone meet with them.
Bill Reichert is the Managing Director of Garage Technology Ventures, an early-stage venture capital firm that he co-founded with Guy Kawasaki. Some of the firm’s most successful startups include Pandora, Tripwire, LeftHand Networks, Coremetrics, Hoku Scientific, Kaboodle, WhiteHat Security and Simply Hired.
Expert advice on getting investors to WOW
During an event at Founders Floor, Bill took the audience through some of his personal tips for grabbing the attention of a potential investor and impressing them at the same time.
Being able to get to WOW starts with how you communicate. An effective communicator engages using three body parts:
- The head. You have to connect with the brain in order to communicate.
- The heart. People make decisions with their hearts as well as their brains, which is why it matters in communication.
- The gut. You have to appeal to the gut when communicating because people make decisions based on their gut instincts.
While many entrepreneurs might think that logic and the brain are the most important body parts, it’s actually the heart. The reason that Bill believes this is because if a VC doesn’t fall in love with a business or an idea, they’re not going to bother doing the due diligence. So, focus on the reasons why your company is lovable aka WOW and you’ll be off to a good start.
Pitch coach wisdom
As an entrepreneur, your pitch is naturally very important. Before you start formulating your pitch, however, here are some words of wisdom from Bill on how to approach your pitch if you want to grab the attention of an investor.
- Don’t start with the problem. Many start-ups believe that you should start a pitch by outlining a problem but the truth is that you actually just need to tell an investor what you do and they’ll generally be able to figure this out themselves, so rather lead with that. By all means, include a problem slide in your presentation but there’s no need to start with it.
- Keep those stories brief. Research shows that humans retain stories better than they retain facts. If you are planning to use a story in your pitch, it’s important to note that most investors would prefer it if you can tell a story in one sentence instead of going on for 10 minutes.
- Use templates as a guideline. Entrepreneurs are no strangers to using templates for their presentations and business planning but very often the templates that you’re using are wrong for your company. When you use specific templates to pitch your business, there is a chance that you’re going to miss the opportunity to tell your story well so rather use any templates as a guideline only.
- Focus on value. Instead of telling investors what you do word for word and going into detail about your products or services, rather tell them what value you create for what customers.
- Show a big market. Investors want to see a big market. It destroys your credibility when it shows that you don’t know how to segment a market so make this a priority when developing your pitch.
This pitch coach wisdom alone will not get you to WOW. The reality is that you only have 20 seconds to be compelling and grab the attention of a potential investor.
The principles of getting to WOW
If you’re serious about attracting the right investor, you need to focus on the 3 C’s. In the first 20 seconds, you need to accomplish the following:
- Be clear. Be absolutely clear about what you do
- Be compelling. Say something that gets an investor’s heart beating a little faster
- Be credible. If you start blowing smoke with hyperboles, you’re simply going to destroy your credibility so keep things simple yet factual and interesting
Steps for crafting your WOW
In order to create the perfect WOW, follow the following steps:
Step 1: Create a sentence that clearly describes what you do. Make this a normal human sentence that most people would understand. It’s not about dumbing it down but it should be intelligible to a relatively broad audience. Remember to make this short enough so that it’s easy for people to remember.
Step 2: Create a compelling sentence around the benefit that you offer and to whom. Entrepreneurs will generally go into their features at this point but you should be focusing on the value that you create for the marketplace and the people who will benefit. You need to showcase benefits and not just a set of features. What would get someone to say they love your product or service?
Step 3: Create a sentence on how you’re different. It’s really rare for investors to hear a truly unique idea. When you’re pitching investors, mention previous brands or companies that have tried to do the same thing and how you’re going to do it differently.
While the above steps might be a type of template, chances are you’re going to need to be able to answer these questions at some point in your business so it helps to have these sentences ready.
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