Funding is all about story telling



In my experience raising capital – successfully over multiple rounds for four startups, unsuccessfully for a few more – investors decide with their gut, then justify their decisions with the numbers and logical process they seemingly went through to make their decision.

You don’t get to the gut with numbers, comps, or logical argument – you get there via story telling.

As written in another post, you first need to capture investors’ imaginations, then their wallets will follow.

In the article Would-Be Carmakers Tap the Wisdom, and Dollars, of Crowds  by Eric Taub in The New York Times Darren Marble, chief executive of CrowdfundX says:

Crowdfunding is all about storytelling,. You need to tell a story that emotionally inspires people. Financial return is secondary to this for investors.

While it’s the received wisdom that crowd funders and angels make their decisions less on financial return than “professional” or institutional investors like venture capitalists, even VCs can be influenced by factors other than financial return, even if not consciously.

There are a number of workshops and online aids to story telling. If you aren’t a natural story teller, investing time in learning the craft will have a big ROI if you are planning on raising funds for your venture.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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