The Love Triangle: Start-ups, Investors and Storytelling

Mankind has relied on storytelling for as long as history has allowed us to document. The idea is not to relay a fantasy world but rather communicate a non-fictional story in an appealing way. Numbers and data are mere sides to the platter that is the core appeal of a company. More often than not, startups focus on the product that they have poured their soul into building, all behind the scenes. This does not resonate with investors for the very fact that you cannot marry the product to your company unless investors are able to admire the intangible aspects of your startup.

At the same time, storytelling has its hardships because the single room of a startup has many façades and each façade should be able to tell the same story of who is in the room but in a different manner, based on who the listener is.

“Maybe stories are just data with a soul.” Brene Brown

The 3Es of the entrepreneurial storytelling process are:

1. Entrepreneurial Identification
2. Elaboration of Strategies
3. Embedding Familiar and Unfamiliar Contextual Elements

Step 1 ensures that the facts are outlined in a format that speaks of how the founder arrived upon the idea and how the team was then established. This also covers the factual pillars beyond data statements and allows the start-ups core values to come forward in a memorable manner. The best of investors invest in the entrepreneur and not a legal entity.

Step 2 of Entrepreneurial Storytelling covers the “How” for a start-up. The bigger picture always speaks of overnight success but micro storytelling covers the moments of burning oil at midnight. Beyond speaking about tactical strategies, the art of storytelling to investors relies upon drawing empathy and painting a picture of a tough journey that is not quite complete yet. It is important to state data and figures to get actual investment, but the key lies in this step where data turns into metaphorical obstacles that speak of the start-up’s strategic war play.

Step 3 frames the macro environment in which the start-up functions. Assuming that the audience is hooked onto the story, the introduction of characters, situations and contextual elements allows investors to perceive and understand the strategic readiness of the start-up without having to deep dive into cold, hard data.

From Nike amplifying its values in its early days to Uber using storytelling to arrive upon its singular tagline, “Everyone’s private driver”, successful start-ups have thrived upon embodying emotion as the driver for engagement, whether it is with customers or investors. The biggest problem that investors have when they hear pitches from start-ups is the uncertainty of the start-up’s success and trust in the entrepreneur. Humans are wired to believe personal stories, where the protagonist comes in and saves the day. The idea is to state that there was a Eureka moment, which led to development of the idea, the core that is built up by a team, which is central to humanising the story, and then moving on to these characters identifying strategic methods to overcome obstacles. The flow of the story is just as important as the material.

To conclude this story, investors are humans and thus, understanding what investors look for in start-ups is not rocket science. It is merely about humanising data by placing it in the room during your meeting whilst narrating its life story.