Once Upon a Time … The Importance of Storytelling when Pitching Investors
Think back to one of your most memorable experiences. At its foundation was likely a great story. It may have been your own or it could have been someone else’s, but a connection was made. You probably remember how you felt, where you were, maybe even a scent or what you were wearing. That’s what stories do – they connect people in a way that facts and figures never can. Whether you’re in a classroom, boardroom, or a room full of investors, your story (and how you tell it) is what will make people remember you.
Remember – investors invest in people, not in businesses. So, what do you offer that would make others take their money and risk it on you? What attributes do you possess that will help ensure they will benefit financially from doing so? Ultimately, why should they take a chance on you? Often, all of those answers come down to the connections you establish. And those connections come from the story you tell.
What About the Numbers?
Personal anecdotes, combined with a unifying passion, is what will make your business stand out in a pitch. This is not to minimize the importance of the numbers, data, and metrics. To the contrary, a great story without that critical data will lead you only to neverland. No matter how compelling a story, it cannot be a substitute for basic business essentials – a strong business plan, financials, and a proven track record. But to set that data apart from all the others, you need a compelling story to take the investors on your business’s own unique journey with you. It comes down to providing that information in a more memorable context to help you stand out among the rest.
Top 5 Storytelling Tips
Keep it Real. Authenticity is key in storytelling. An authentic story is what will set you apart from someone who is making a marketing, sales, or investor pitch for a specific business or solution. Through your story, and the way in which you tell it, investors can truly see the authentic you. And authenticity builds trust – a key component for any relationship.
Connect with Emotion. According to Inc.com, 90% of decisions are made based on emotion. Then, people use logic to go back and justify the decision they’ve already made. Use a story that includes the positive emotions your product, services, or solutions can generate.
Remember the Story Behind Your Why. Allow the investors to feel that same insight or pain that you felt when you developed your product or solution. You can only share your why effectively through storytelling. They will not only remember your message, but understand why it is so important.
Connect to a Higher Purpose. Your personal why or story likely has a far larger impact (or you wouldn’t have been able to make a business out of it). Your story becomes that much more powerful when you remind others of your personal commitment to a certain cause or providing your solutions on a larger scale to help others.
Share Another Story. Maybe the story isn’t yours. Maybe it’s from one of your clients or customers. How has your product or service improved their lives or businesses in some significant way? What have they shared with you? Focus on one particular person’s story. To be relatable, you want to be specific, and put the investors in the shoes of that person, not everyone overall.
Storytelling is not about performing as a comedian or an actor in a theatrical production. It means personalizing how you communicate your business. Storytelling builds relationships, which are at the foundation of all businesses – customers, clients, partnerships, and investors.
You want them invested more than financially … you want them invested emotionally. To capture their undivided attention during your pitch, tell them your story passionately and authentically. By creating connections, you will infuse passion and trust, leading to your own happy ending – the investment your business needs.
Barker Associates thrives in helping companies develop the right stories for their pitches. If you need assistance with yours, or have any other questions, we can help. Please click here to schedule a 30-minute consultation at a rate of $100.
Acquisition Integration – After the Ink Dries The “3 Ps” of Integration
Last week, we talked about defining your corporate strategy, and that oftentimes, those strategies include acquisitions of other entities for your company to grow to the next level. Whether it’s to streamline operations, introduce new products or services, or both, many companies define their corporate development strategy within the parameters of an acquisition.
There has been a shift in our global economy. And in that shift, acquisitions have become the norm, not the exception. Yet, according to Harvard Business Review, historically, 80% of companies that have been involved in an acquisition fall victim of the plethora of moving parts essential to the process and ultimately fail. Combining not only two companies, but two sets of stakeholders is fraught with potential landmines.
This week, we take the acquisition strategy a step further. The inevitable questions surface after the ink dries on the legal documents … How do we increase the chances of success? What exactly happens now that we’ve acquired another business? The due diligence is complete, the documents are signed, the lawyers have left – so, what’s next?
Acquisition integration is the process of combining the systems, process, operations, and personnel of the acquired company into your own by maximizing synergies and efficiencies. Logistically, the integration itself should be focused on what I like to call the “3 Ps” of Integration – Personnel, Plan, Practices.
Acquisition Integration – Personnel Issues
Appoint an Integration Manager and Team. The integration manager should have seniority and experience with your company, and be able to hold the team members accountable. The integration will be his or her full-time responsibility for as long as the process takes. The team should be made up of those with expertise in the various areas of integration, including information technology, operations, finance, and marketing.
Communicate the Good … and the Bad. Meet with those you plan on bringing onto the new team from the acquired company as soon as possible. Without some reassurances that they are staying, they will soon look elsewhere for career opportunities and may consider offers from competitors. For those who will not be moving forward, let them know quickly. This is for your own benefit, as much as their own. Indecision will lead to rumors, which inevitably paves the path to a lack of morale – no way to start a new venture.
Focus on Cultural Integration. Decide how much of the acquired company’s culture you are bringing into your own. Will they mesh? Are their conflicting values? What are the priorities on each side? Culture will have a huge impact on the new relationships going forward.
Acquisition Integration – Plan Issues
Develop and Follow a Conversion Plan. The conversion plan should incorporate all of the changes that need to be effectuated, as discovered during due diligence pre-acquisition. Additionally, understand who is responsible for each task and goal, along with applicable due dates. The manager and team must be held accountable to the conversion plan.
Modify the Plan as Needed. Through the integration process, additional opportunities may be discovered. Modify the plan accordingly to adjust for these opportunities, including the required resources, and communicate any changes to the team.
Use Metrics Consistently to Measure the Plan’s Success. Measure everything you are doing as it relates to the integration. Compare actual results to those anticipated, including timelines.
Acquisition Integration – Practices Issues
Identify Best Practices. Determine if the acquired company had practices that worked well and could enhance your own operational practices. If they bring value, develop ways to incorporate them into your own. Then, as always, communicate these Best Practices to the rest of the team.
Evaluate Practice Similarities and Differences. What services, products, and operations are the same? Which ones are different? Are there overlapping vendor practices or relationships? Which parts of the accounting and marketing are complementary? Which are contradictory?
Provide and Receive Feedback. Ask yourself the following: What went well with the integration? What didn’t? What are the expectations moving forward? Provide this feedback to the team. Additionally, accept any feedback provided to you and use it for improvements going forward.
Focusing on the “3 Ps” in acquisition integration is crucial for the long-term success of your business post-acquisition. Barker Associates has extensive experience helping companies with acquisition integrations. If you need assistance with yours, or have any other questions, we can help. Please click here to schedule a 30-minute consultation at a rate of $100.
Defining Your Corporate Development Strategy How to Navigate from Where You Are to Where You Want to Go
Typically, when you get into your car, you have a destination. You’re going somewhere and you know how to get there (or you have your smartphone or navigation to help you along the way). You don’t get into the car and sit there wondering absentmindedly about what you should do next (put the key in the ignition, put the car into gear) or where you should go (a quick trip to the store, a commute to work, or a longer road trip to a vacation destination). Rather, you know what your next steps are to take you where you want to go.
We’ve used this analogy before in our financial literacy series, but it holds true here just as much. Running a company is very similar to driving a car. You need to know the steps you need to take to get started, where you are going, and of course, how you will get there. Without them, much like as a driver, you will soon find yourself lost. And, with a company, you not only have to worry about yourself getting lost, but all of those others (staff, clients, vendors, partners) following close behind. It’s important to navigate and lead them along the right path, or, as I like to call it, your corporate development strategy.
What is a Corporate Development Strategy?
A corporate development strategy is best described as an actionable plan for your company. There are different strategies (or routes) you can take—Stability Strategy, Expansion Strategy, or Growth Strategy, to name just a few. And while they all will take you in different directions depending on the goals you have for your company, they all have the exact same foundation—understanding your financials, both current and future projections. Without a clear understanding of your revenue, expenses, and other financial data, it would be difficult to define your strategy based on where you want to drive the company in the future.
As you begin to define your own corporate development strategy, it’s important to put aside some common debates and confusion. Corporate strategy is not corporate finance (although it will always incorporate finance). Corporate strategy is also not business strategy. Like the distinction with finance, they are close, but distinctions abound. Business strategy deals specifically with how you are going to achieve your goals. Corporate strategy is more all-encompassing—it includes not merely your annual goals, but a clear overall strategy on where the company is going with well-researched answers to questions, such as:
Where do you want your business to be in terms of revenue in ten years (not three or five, as most business project)?
Note: This should be realistic, but not conservative.
What will it take each year to get there?
Who is in the competitive landscape?
How will you compete?
What are barriers to where you want to go?
Should you introduce new products/services? Should you remove any products/services?
If so, when?
If so, should you acquire another company with experience in that space?
Are their potential partners or suppliers in which you can outsource some of your operations?
How do you optimize productivity and profitability?
Do you need new technology?
Should you acquire a company with expertise in that technology?
Dig Deeper than a SWOT Analysis
This list in not all-inclusive, but should give you an idea of the scope of the due diligence required. Small companies often will think about some or all of these questions during an annual review (if they have one – let’s hope they do) where they dust off their white board and do a typical SWOT analysis. But a true corporate development strategy will dive much deeper than a four-section chart detailing the somewhat generic strengths, weaknesses, opportunities, and threats of a small business. To grow beyond a small business, there needs to be much more than the contents of four cubes on a whiteboard.
A successful corporate development strategy may include diversification, where a company acquires or establishes a business other than that of its current product. It could also include horizontal integration, where there is a merger or acquisition of a new business, or a vertical integration, which includes the integrating of successive stages of various processes under single management.
Many, but not all, corporate development strategies focused on growth will include a merger or acquisition at some point. It’s often the best way to truly grow your business to the next level. But it always begins with a decision made as you define the right corporate development strategy for your business.
Putting the appropriate strategy together is crucial for the long-term success of your business. If you need assistance defining your business’s future, or corporate development strategy, or have any other questions, Barker Associates can help. Please click here to schedule a 30-minute consultation at a rate of $100.
Finding the right investor, who is interested in your company and you, begins long before you actually may need money. Preparations include thinking about businesses that investors want to invest in and then modeling yours accordingly, maintaining up to date financial data, and building a strong consumer base. Once you’ve made the decision to search for capital to grow your business, you create two pitch decks (yes two), and the clock is now ticking. Your goal should be to secure funding within three months from making this decision. And the best way to do so is to have targeted contact list.
First, Some Introspection
Before you can ask anyone for money, you should first ask yourself some important questions. First and foremost, why are you raising money? Be very clear as to why you are doing so, why now is the time, and what the funds will ultimately do for your business. These answers should be weaved into the fabric of your business’s story and included in your decks and any accompanying materials you may present to potential investors.
You should also do a check on your core values. Are they aligned with the company’s vision and mission? Are they still as relevant as when you developed them? Are changes needed? Only when you are confident in what you stand for can you try to find someone who shares …
Who Should be on the List?
Your targeted list may include any combination of some or all of the following: family and friends, angel investors, angel groups, venture capital firms, private equity firms, and corporate investors.
Gather data by performing research on Crunchbase or Pitchbook, and simply networking with others. You should identify vertical industries to see what is happening there. Startup accelerators are also an invaluable resource. Follow groups on social media to see what they’re talking about and what they’re interested in.
Keep in mind that you are not just looking for money. You are looking for someone (or a group) who shares your values, will be excited about what you offer, and who fits with what you do and who you are. Identify who has money and is actively investing.
Factors to Consider in Building Your Contact List
Industry. Who is investing in your industry? Why? Is there some personal connection or is it just about the potential profit? Note that those interested in one particular type of industry often have a background, experience, and connections that can help your business.
Location. Some investors want to be close to the businesses they are investing in. Others give preference to local startups. It’s important to understand if this is a priority for them.
Amount. How much do they typically invest? Some may invest only smaller amounts than what you are looking for, whereas others may invest amounts that are larger that what you need. Ensure there is a good fit.
Longevity. Are they looking for long-term or short-term relationships? Will they be involved for your next round of fundraising or will they want out before then?
Track record. How many successful exits do they have? How many businesses they’ve invested in have failed?
Value. What value do they bring? Investments into a venture are rarely just about money. Do they have operational experience? Industry experience? What are their connections and network? Will they provide advice based on their knowledge and experience? All of this will factor into how quickly you scale.
This process is about targeting the right types of investors, focusing on quality over quantity. You want the best fit to bring the most value. As is with much in business, and life, it is about networking and cultivating relationships.
Once you’ve identified some strong potential investors, gather as much contact information as possible, including email, social media accounts, website, phone number, and address. Understand that they will want to see your pitch deck to determine if it is a good fit with their investment thesis before moving forward. Being prepared sets the right expectations from the start.
Your list should be an ongoing concern. Contacts will fall off and new ones will be added. By keeping it up to date, you can ensure that you will be ready for each round of funding in the future.
Your most limited resource is your time. And the time you spend finding investors is less time you have to focus on operations, marketing, or sales. Protect that time fiercely by targeting the right investors from the start. With increased focus comes increased efficiency and clarity on what and who you really need. You may need to talk to 100 or more contacts to get some interest, but you don’t want it to be thousands. That’s where your targeted list comes into play. So you’re not spending too much time and energy and burning out before the right person comes along.
Ultimately, if you need money for your business, you need people to pitch to and the more targeted your list, the more possible yeses you’ll have, and the greater ROI on your time.