Storytelling for a Persuasive Investor Pitch

Copyright © 2016 BullHaus
Storytelling for a persuasive investor pitch
Erik Bullen
May 23, 2019 @Venture Lane
PERFECTING YOUR PITCH

Agenda
1. Introductions
2. Perspectives on Crafting Your Pitch
3. 5 min Quick Pitches with 5 min Feedback
4. Ask Me Anything…else
Copyright © 2019 BullHaus Ventures, LLC

Introductions
1. Who you are, company/product, stage
2. What do you want to get out of today’s session?
3. What is one thing that makes a pitch effective?
4. What is one thing that makes a pitch ineffective?

Crafting Your Pitch

THE BIG IDEAS
Effective* pitches have elements of good
storytelling in common. They are:
1. Simple : Written, visual, and verbal content that is concise, relevant,
cohesive, and tailored to the audience
2. Persuasive: Connect with a listener* on a rational and emotional level and
provides context for change
3. Flowing: Include natural flow and tension. A strong narrative arc (written
and spoken) building to a finale.
4. Credible: Speaker, plan, and supporting data that delivered evidence of
truth.
*Being effective is NOT the same as being successful (i.e.,
importance of fit).
** Qualified!Copyright © 2019 BullHaus Ventures, LLC

Framework for Constructing Your Pitch
1. Problem
2. Solution / USP
THE BIG IDEAS
The Opening The Body The Ask
The
Close
Narrative Arc
3. How It Works
4. Customers
5. Market Opportunity
6. Business Model
7. Competition
8. Go-To-Market
14. Funding Ask
15. Use of Funds
16. Why Us?9. Vision
10. Team
11. Traction
12. Exit Strategy
13. Financial Projections
Why à Why Us à Why Now à What à How à Proof à What We Need à Why Us?
Considerations: Structure, Content, Style, Delivery, Fit*

Simplicity

SIMPLICITY: WHY IT’S IMPORTANT
Humans prefer simplicity (and beauty)
Simplicity makes concepts easier to understand and remember.
And it makes the experience more pleasurable.
(But it’s hard and takes time, so plan for it)

A supporting theory
Processing fluency, the ease of information processing by humans, influences
many experiential factors such as perception of effort, risk, product value, and
aesthetic pleasure (e.g., a persons attractiveness).

The idea in history
“Je n’ai fait celle-ci plus longue que parce que je n’ai
pas eu le loisir de la faire plus courte.”
(“I have made this [letter] longer than usual because I
have not had time to make it shorter.”)
- Blaise Pascal, Lettres Provinciales, 1657

The idea in history
“Any intelligent fool can make things
bigger and more complex… It takes a
touch of genius—and a lot of courage to
move in the opposite direction.”
- Albert Einstein

The idea in action
”Researchers in Japan setup two ATMs, ‘identical in function, the number of buttons,
and how they worked.’ The only difference was that one machine’s buttons and screens
were arranged more attractively than the other.
In both Japan and Israel (where this study was repeated) researchers observed that
subjects encountered fewer difficulties with the more attractive machine. The attractive
machine actually worked better.”
- Stephen Anderson, A List Apart, referencing Donald Norman’s book Emotional Design

The problem with verbose, data heavy, jargon-
filled content
1. You are causing cognitive dissonance by forcing the audience to switch
between reading and listening. And they need to work harder.
2. You are Increasing the odds that investors won't understand your business.
3. You're missing an opportunity to really think about your business
4. You're showing that you aren't a good communicator, a skill that is extremely
important for you as a leader and executive.

SIMPLICITY: HOW TO DO IT WELL
Reduce complexity. Reduce choice. Images over text.
1. Tailor to venue and audience.
2. Reduce the messages to their essence. Spend time thinking about your business.
3. One takeaway per slide. Use that as your header, and put supporting content in
the slide body.
4. Put relevant details into the appendix so that if questions do come up during Q&A,
you can pull the appropriate slide to show that you understand your business in
depth.
5. Use visuals such as images and infographics.
6. Hire a good designer if need be.

SIMPLICITY: HOW TO DO IT WELL
Keep in mind
You are pitching to either get to the next pitch OR the due
diligence phase.

Persuasion
Persuasion

STORY TELLING: WHY IT’S IMPORTANT
Stories are extremely persuasive
Story telling is unique to our species because it enables sharing
of experiences. It’s what binds us together on a rational and
emotional level; transfers values and ideas, drives behavior, and
creates collective movements.

If you want to change what someone does, you
need to change what they feel, and not just
what they think.
Human Behavior and Decision Making
=
Rational Thought + Emotion
(Even for many VCs)

“Everybody experiences far
more than he understands.
Yet it is experience, rather
than understanding, that
influences behavior.”
- Marshall McLuhan, Philosopher

Fundraising is sales
Your job is to persuade potential investors that they should buy
into your story.

QUALIFYING INVESTORS
Some factors determining investor fit
1. Industry
2. Market
3. Technology / Product
4. Team
5. Stage
6. Existing Portfolio
6. Funding Amount
7. ROI
8. Overall Risk
9. Other Investors
10. X-Factor

Address All Keys to Persuasion
1. Do I believe you?
2. Do I believe that this business is
feasible?
1. Does this feel right?
2. Will this investment be
meaningful for me?
Logic
Credibility
1. If I give you my money today, what might be my
return in 5-7 years?
2. What are the odds of that happening?
3. Why should I give YOU my money instead of one
of the 20+ other startups that I saw this week?
Top Questions on Investors’ Minds (answer these in your pitch)
STORY TELLING: HOW TO DO IT WELL
Emotion

“Very few people or companies can clearly
articulate WHY they do WHAT they do.
By WHY I mean your purpose, cause, or
belief. Why does your company exist?
WHY do you get out of bed in the
morning?
And WHY should anyone care?
People don’t buy WHAT you do, they buy
WHY you do it.”
- Simon Sinek , Speaker and Consultant
Start with the Why

Start with Why?
1. Your personal story – Why are you doing this?
2. A Use Case – Customer Day-in-Life
3. An unexpected, interesting fact – Did you know?
4. A question – How many of you? (use selectively based on
audience / venue)
You have 30-60 seconds to build interest

Continue Why You and Why Now?
1. How are you solving the problem?
2. What makes you special? What is your x-factor?
You have 30-60 seconds to maintain
interest

End with 4 Reasons Why You, Why Now, Why
You’ll Win and a Call-To-Action
Think like an attorney and make a strong closing argument (30 sec).
Your audience will only remember 1) 4 facts and 2) how they felt 3) a
call-to-action.
Worse, this memory will be biased to what they heard last. Make it
memorable by reconnecting emotionally on the impact you’ll have.
In many pitches this is a lost opportunity.

Narrative Flow
Tips and Considerations

NARRATIVE FLOW: TIPS AND CONSIDERATION
Things to Keep in Mind about Topics
1. You don’t absolutely need to stick to a set number of slides (e.g., 15). Content,
flow, and timing are just as important.
2. The sequence of topics is a general guideline. You should always stick with
certain topics in sequence (e.g., starting with problem/solution and ending
with a closing argument). However, there may be a few topics that fit better in
one sequence than another (e.g., exit strategy) or may be covered together
(e.g., talking about customers in problem and business model sections).

NARRATIVE FLOW: TIPS AND CONSIDERATION
The 3/6/20/60 Presentation Guideline
You will have to give presentations that are roughly 3, 6, 20, or
60 minutes in length. Tailor your presentation accordingly in
structure, flow, content, and messaging.

NARRATIVE: TIPS AND CONSIDERATIONS
How It Works
Consider including this, particular if a product is difficult to
understand, multi-faceted, or really sets up apart. However,
don’t make what’s difficult to understand in concept difficult to
understand on page. Abstract, use visuals, and only highlight the
most important points.

Customers
Optional and only if you can’t clearly explain who your
customers and customer segments are prior to this section.

Market Opportunity
Help the investor understand the realistic market opportunity
for *your* product and based on your GTM. Show tops down
and bottoms up. Don’t fall into the 1% of China trap nor conflate
markets.

Business Model
How do you or will you make money? How reasonable is is that
customers are willing to pay? How well tested is your pricing
model?

Acknowledge the Competition
By informing investors of the competition, you are showing several things:
1. you did your research
2. you understand the industry and the market
3. you are self-aware and
4. you know how to position your product
5. you are special and unique enough to have high odds of success. Even better, you
might teach me something that I didn't know.
Finally, if you truly don't have competition, then it's on you to convince the investor
within the small window of time that this is the case.

Go-To-Market Plan
Help the investor understand how you to go to market. What
has worked and what hasn’t worked? Be up front if you are still
testing and experimenting.

Vision
Do you have growth opportunities beyond the current business once you execute
on your 3-5 year strategy? Keep in mind that focus is important, but that some
companies can open greater opportunities once a beachhead and certain traction
has been established.

Traction
Have one slide on traction, and always keep this slide up-to-date with status,
accomplishments, proof-points, timelines, and milestones.
Note: Customer testimonials are a just ok indicator but not nearly as valuable as
hard proof, particularly *paying* customers.

Financial Projections
If you’re raising from venture capital you need to show VC scale growth (e.g.,
$50M/$100M revenue in 5-7 years, but anyone can throw up a hockey-stick
growth projection. The question is, based on everything you just told the investor,
are your projections believable and reasonable?
Bonus points: Show me that you’ve done a scenario analysis and produced a
reasonable growth range.

Exit Strategy
Investors have a 5-7 year exit horizon, and most exits are by acquisition, not IPO.
Do you have a reasonable exit strategy, and does your business strategy account
for and prepare you for these exit scenarios?

Team
Do you have a core team that can execute, and are you surrounding yourself with
advisors, board members, and mentors that can help you fill gaps and that provide
strategic value? Don’t add vanity advisors without their explicit consent nor the
ability to provide strategic value. And in most cases, cap your narrative with the
team instead of starting with it.

Funding Ask
Do you have a core team that can execute, and are you surrounding yourself with
advisors, board members, and mentors that can help you fill gaps and that provide
strategic value? Don’t add vanity advisors without their explicit consent nor the
ability to provide strategic value. And in most cases, cap your narrative with the
team instead of starting with it.

Use of Funds
I’m giving you money. Tell me how you plan to apply that money to grow
according to your forecasts. Is the allocation reasonable based on company stage,
strategy, and comparatives?

Credibility

CREDIBILITY: TIPS AND CONSIDERATIONS
Layer credibility throughout the narrative
When pitching, it’s about what you say and do, not about your
slide deck. Credibility is 90% talk and body language and 10%
written content.
See How to sound smart in your TEDx Talk | Will Stephen | TEDxNewYork

Factors of speaker credibility
1. Authenticity
2. Confidence
3. Coachability
4. Presence
5. Clarity
6. Ownership
6. Timing and Flow
7. Orientation (Self or Others)
8. Look
9. Word Choice
10. Conviction (Not Delusion)
11. Likability

Oh, and don’t spin - or worse – lie. Ever.
Always tell the truth. Be upfront about the challenges, the
threats, what's working, what's not working, and what needs to
happen for you to be successful. If you don't, they will find out
during due diligence. Self-awareness is a critical trait. Like any
good, long-term relationship, start it off right, so that both
parties understand the full extent of the situation.

Let’s Pitch!

Ask Me Anything

Storytelling for a Persuasive Investor Pitch

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