Need To Raise Startup Capital: Tell A Great Story - Black Enterprise

Need To Raise Startup Capital: Tell A Great Story

Gerard Murphy is the co-founder / CEO of Mosaic, which helps photographers protect, organize, share and preserve their best photos in an increasingly cloud and mobile world. Telling a great story is what helped Mosaic raise over a million dollars in seed funding, according to Murphy in his Forbes’ Young Entrepreneur Council column. Sure, investors liked Mosaic’s team, technology, traction and financial model, but in the end, investors could relate to the story they told and believed that we were the team to solve it. Murphy added that storytelling is a powerful tool for entrepreneurs looking to raise a seed or venture round.

“Humans are hardwired to love a great story. Stories inspire us. Stories get retold. We remember stories. As the late Maya Angelou said: ‘People will forget what you did, but people will never forget how you made them feel,'” Murphy wrote. “The same is true with potential investors. They may forget what your company does or the specifics of your business model, but they will remember how they felt when they heard your company’s story.”

Murphy notes that a good story needs to inform, inspire and involve:

Inform: This is the part that most people get right. This is the plot of your story. One sales trick I learned along the way is that people like ideas they think they came up with themselves. In other words, don’t just give your investor the number four. Give them two plus two and then help them realize the answer is four.

Involve: Make your pitch personal to the investor. This usually involves listening. Don’t spend all your time talking. All of us want to be listened to; better yet, all of us want to be heard. When you listen to people, they tend to listen to you back. Listening gives you great insight into their concerns and gives you an opportunity to overcome them. Use what you learned about the investor to make your pitch specific to them.

Inspire: This part is the hardest. You need to make the investor care.  This is the emotional aftertaste. It’s about finding the essence of how your product will change lives, and then giving the investor the confidence that you are the person to lead that change.

There is an old sales adage to “tell, don’t sell.” If you want to raise money for your business, know the facts cold; but more importantly, figure out the story that your business is going to tell. If you want to raise seed or venture money, become a great storyteller.