Funding is important for startups — it allows them to innovate with all its potential and grow in this ever-competitive industry. However, it is not an easy task to gain significant funding from VCs; a company must show and prove that they are worth the amount of money. And this can be done when you have a strong pitch deck.
Data vs Story
It’s not always about just having a pitch deck, it is also about what to use in the pitch deck — data or story. This is a huge dilemma for startups when they seek funding. While many startups prefer to add as many numbers and details as possible on the pitch deck to show their credibility, there are companies that prefer to take the process ahead with storytelling.
If you are a startup and you have worked for a certain time, you would definitely prefer to put up a lot of data about — from revenues created to capital spent on resources to acquiring customers. And this definitely is important. When you have the credibility, why not show it with the data.
But despite the importance of data in a pitch deck, reports suggest that storytelling is way more effective when pitching to a VC.
The major reason behind storytelling being one of the driving forces that helps you land investment is that it pulls your audience in and allow you to create an emotional connection. When you incorporate storytelling with your pitch deck, you take your potential investor to a journey and make them feel connected, which is more likely to make them invest not only on your company or product but also on your vision.
How To Incorporate Storytelling In Your Pitch Deck
Storytelling works only when you know how to incorporate it with your pitch deck. While there are many methods and ways to make your pitch deck stand out, we would like to share some points that you definitely need to keep in mind when you create a pitch deck.
When we talk about storytelling, the things we have to focus on are building a scenario, the problem and the solution.
When it comes to the scenario, it’s about creating a character and a complete scene that investors would like to connect with. Your potential investor wouldn’t be interested in knowing about your product right away. Rather, they would like to know about a person — with a name, with a designation, and would like to know about him/her.
Here is an example: Tinder Pitch Deck
Doesn’t matter which domain you are in if you know the art of storytelling, even your data science startup raise that much-needed fund.
Once you are done setting up the scenario, now is the time to talk about that problem that is bugging your character. The problem cannot come up out of the blue, your character must have discovered it — tell them about it too.
One of the best ways to make more impact is to compare your character’s problem with your potential investor’s problem. Make them feel that it is actually something that needs to be taken care of.
For example, if you are pitching for your data science startup, you have to do your homework and see if your potential investors have any data science aspect. If they have, is there any challenge they are facing or could face? Create tension in the mind of the listener and then jump onto the solution.
When you talk about solving the problem, you have to make sure that your product gets enough attention. It is not just about the solution to the problem but more about how your product would solve the problem. Furthermore, you also have to state how your product going to scale, how it is better than the ones in the market (only if there’s any) and is there only one problem that your product deals with.
That is not all, you also have to tell them how the team has worked to make the product. Tell them about each one’s role.
Storytelling is definitely one of the core pillars but that doesn’t mean data has no role to play. If you have been operating your startup from past few years and if you have generated some certain amount of revenue, you definitely should add your stats. Some of the stats you can add:
- Growth rate
- Number of clients or customers using your product
- Investments you have made
- The revenue you have generated
- How do you understand your clients/customer behaviour and make changes to your product
- Your marketing strategy etc.
To give you an example of Problem and Solution and even the use data, here is the AirBnb Pitch Deck where they showcased the perfect way of stating the problem and the solution along with data.
The number of startups emerging in different domains is massive. However, not every startup is successful when it’s about convincing the sharks. They either don’t have any experience about the process of pitching or they neglect the imperative points. If that’s the case, then it’s high time to understand that data and storytelling go hand in hand, and the startups who are making the best use of these two are more likely to bag some significant funding.