If you are proposing a merger or acquisition, or simply seeking an investor for your business, the process is the same. You have to put together a convincing story of a win-win opportunity for both sides. This may seem intuitively obvious, but as an angel investor, I have heard hundreds of new business pitches that focus heavily on the product, but don’t tell the rest of the story.
For example, if I don’t know you, and you didn’t sell your last company for $800 million, your story needs to educate me on why anyone would bet on you to succeed, and how you would reward me for success. Don’t forget that investors invest in people, more than ideas. Mark Zuckerberg was not the first to build a social media platform, so he had to find investors who believed in him.
Every business pitch has to tell a solid overall story, spanning the range from personal motivation, business opportunity, to return on investment for both you and me. I found some great guidance on how best to do this in a new book, “Let the Story Do the Work,” by Esther K. Choy. She speaks from years of experience coaching entrepreneurs and executives on the magic of a story.
I’m a believer in her five-step formula, paraphrased here, for weaving data around the context of an innovative solution, key players, and an effective business model, to paint a convincing picture of a compelling business proposal:
- Put yourself in the audience’s shoes and practice empathy.The first secret is to know your audience before you pitch. These days, with the wealth of information on the Internet and social media, there is no excuse for not finding a connection, even if the pitch is long distance. Address their challenges and interests in the story, not yours.
- Persuade with data from third-parties, rather than passion.When crafting business stories in today’s environments, you need proof from authoritative sources, and content to arouse the emotion and support of a specific audience. Remember that every person is different, and their emotion will likely not match yours. Temper your emotion with data.
- Use words to frame a limited set of numbers.Don’t try to overwhelm any audience with a large amount of data. The average person can only hold around seven numbers in working memory, so the words that position these critical figures are the key to making the story convincing and credible. Choose your points well, and make them memorable.
- Create meaning out of the data and emotion.To create meaning for decision-makers, focus on the whys of the relationship you are proposing. Remember the old storytelling basics of setting the scene and establishing the hook, followed by reminding, recounting, and reframing. In the end, tie back to how it all began, why your audience should care.
- Give them what they want to hear, then what they need. If your audience wants to hear about return-on-investment, don’t dodge that subject. Their minds won’t be open to more important points, until the first is addressed. Transition with a story to illuminate other critical needs, ending with the actions you need in the short and long term.
Unfortunately, too many business professionals see their story preparation as “window dressing,” or a waste of their valuable time in moving forward to success. In my experience, the right story, with all the right elements, is just as critical to long-term success as the right solution, with the right team. If you can’t attract the right investors, or the right strategic partners, all else is lost.
Indeed, when you get down to basics, crafting a business success story is the way you communicate to your team and external constituents, and how you market effectively to your customers. It pays to get it right the first time, since first impressions can make all the difference.