Frequently, founders determine the worth of their company based on the time and effort required to establish it. It may be difficult for businesspersons to objectively evaluate a company established on sleepless nights, hard hours, and personal financial risk.
Hence, when obtaining capital to expand your business, you must evaluate it as an investor would.
Know your sector’s risks?
Healthcare has unique dangers. Healthcare investors worry about FDA clearance and IP strength. Will the clinical experiment succeed? FDA approval—how long? Cost of approval?
Rodnae/Pexels | A strategic narrative is essential. Exhibit long-term thinking and believe in the company’s growth
Early in the funding process, an entrepreneur can utilize storytelling to set out the regulatory road, including FDA approval and patent filing milestones. Our portfolio firms’ Storytelling for Impact Model quantifies regulatory approval and IP risk.
CEOs frequently ignore this problem, arguing it’s too early to meet with FDA regulatory authorities, that regulatory clearance will be many years away so the firm can discuss it later, or that submitting several patents in different nations isn’t essential until the business is more mature. This is a significant error that typically causes investors to overestimate the risk, decreasing resource financing.
Author and businessman Gary Vaynerchuk says storytelling is the most undervalued business talent. To receive funding, entrepreneurs must identify investor risk pain points and de-risk them. Storytelling with impact lets you control the story and talk to investors with authority, stressing your leadership and vision to reduce investment risk.
Can you execute your business plan?
Showcase your team, board, and commercialization initiatives to boost your competitiveness.
Most CEOs think a lack of funding will sink their firm. Startups fail due to team, commercialization, and go-to-market issues, according to a study. Show investors your firm has the greatest staff to execute a well-articulated business concept. Investors worry about organizational structure-related operational and execution risks.
Tell a compelling story about how your team’s track record, skill sets, and competencies will execute your well-thought-out business strategy and lead the startup to revenue and profitability.
Rodnae/Pexels | CEOs underestimate the influence of a strong board of directors
Investors want to see the board too. They worry less about execution risk with a diversified, competent board managing the strategic goal and reviewing operational integrity and milestones. Storytelling about your network will demonstrate your association with professionals and celebrities. It boosts investor confidence by validating your business and value offer.
Is the innovation even marketable?
The firm may have a fantastic idea, but logistical issues in production, distribution, or acceptance may preclude economic viability. Entrepreneurs must demonstrate product scalability and profitability in their company strategy.
Present a compelling customer problem-solving story to investors. Show that the idea meets a major demand using data. Big, increasing markets are needed. Investors want to see if the product can serve numerous markets and produce multiple income streams.
Rodnae/Pexels | CEOs worry that briefing investors about several use cases may look unfocused or wasteful
However, investors don’t see it that way, therefore you must recast your message to convince them of your product’s market potential. You don’t have to deploy several market strategies, but you may tier them in a scalable timetable to prove your product is ubiquitous across sectors.
