How a better brand story helps you successfully attract investment
2 July 2019 | Storytech Team
For start-ups or young companies, seeking early-stage investment from angel or venture capital investors is increasingly popular. But with reportedly under 1% of start-ups raising successfully, it’s no doddle.
Barnaby Marshall is a partner at Icehouse Ventures - an investment group that backs New Zealand’s leading high growth companies. The group includes the Ice Angels and ArcAngels investor networks, Tuhua Ventures, Eden Ventures, First Cut Ventures, and the FluxAccelerator. They have collectively invested more than $100m into 165 start-ups since 2001.
Barnaby talked to us about how important a strong brand story is for companies seeking investment, and why that is.
“Early stage investment is all about investing in the people and their vision for the future,” says Barnaby. “How well the entrepreneur can articulate that vision is instrumental in the capital raising process.”
Typically, early-stage investors look for a handful of signals that a business is a good investment. They like entrepreneurs with deep domain expertise and unique insights in their industry. They want to see evidence that the pain point they are solving is real. They look for big market opportunities - billion dollar markets. And they need to believe the start-up has a defensible business strategy – a business that becomes more valuable as it scales, due to it building more defensibility.
The ability for a founder to wrap these aspects up into a strong, clear story for their venture is critical because, Barnaby says, “strong stories signal clarity. Clarity means execution excellence. When companies execute well, they learn quickly, and ultimately have a better chance to find market-fit and grow.”
“Strong stories signal clarity. Clarity means execution excellence.”
Icehouse Ventures Partner Barnaby Marshall
So the presence of a strong story is a signal that the founder is likely to be strong in other areas too.
And it’s becoming more important. “There’s more noise than ever,” says Barnaby. “So having a succinct story is possibly more important than it’s ever been. People have limited time and lots of incoming messages, so it’s all about simplicity, clarity and therefore cut through.”
And a story can also help raise money more efficiently. “Investing in start-ups is part rational part emotional,” says Barnaby. “Companies with a strong emotional appeal, those that can capture the minds and hearts of investors will be able to raise more money, faster with a higher valuation.”
Ultimately, he says, “fund raising is story telling.” But it’s not as easy as you’d think. “It’s sometimes hard as an entrepreneur to see the wood from the trees. To reduce a complex problem or solution into a succinct few sentences is hard. That’s why it’s important to follow a process to try and force the story into something that can be easily and clearly communicated.”
Storytech’s process makes it a lot easier – in just one day, you’ll get to a simple, clear, compelling story for your business.
And once you’re there, why not try your luck with Icehouse Ventures by pitching your story to them here.
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