Lesson: Fundraising Series Seed with Jenny Lefcourt

Step #3 Narrative: Work backwards from the points you want to convey

I think entrepreneurs have to be really careful when they’re pitching. That they are so thoughtful about, “What am I trying to tell the person on the other side?” And then think about the points that will let them do that, instead of what I call working forward. “Well, I have to tell them A, B, C, D, E, and F” It’s like, “No, I need to tell them this point and these three points make them understand that point more than any other.”

So I always say, every slide has a moral of the story. But a lot times, entrepreneurs do work forwards. “Well, I’m going to tell them this and I’m going to tell them that and I’m going to tell them this.” Instead of, “I need them to get its big. So I’ll tell them these three things. I need them to know that it’s broken. I’ll tell them these three things,”

So I guess my biggest advice is, work backwards. When you walk out, what points do you want to have made? What points do you want them to have had? And then, make sure you’ve given them the support so that they get those points and believe in those points.

When you’re beginning to think about your story, your narrative, your deck, you really want to think about it as, “What are the key points I need to cover and how do I best tell the story and keep their attention?” So I think you want to first think about the fact of what are you? Right? So you have to come in and say who you are. You have to explain who you are as a person, who your team is. People want to know who they’re talking with, first and foremost.

Then you want to give them the big idea and it has to be big. I mean, at this point, you could either lose someone and they’re checking their cell phone. Or they could, I call it the “lean in moment” where they’re sitting up and they’re paying attention because what you said is interesting enough.

So you have to have a big idea and a big market and then you have to explain how broken it is. Like, what’s happening today? And how much better it’s going to be, once your product is in the hands and at that point, if you have a product demo, you show the product demo. But your narrative is to really paint a picture of how big and painful a market exists today and how much better it’s going to be once you exist.

I think it’s important that entrepreneurs not get stuck in what I call “no man’s land.” So, they raise a little bit of money and they raise it based on sort of the hope and the dream. But they don’t raise enough to prove anything. And it’s much harder, there are certain times where it’s good to raise money. One is you have no data. So you have to just convince someone this needs to exist in the world and you’re the person to do it. And there are people who will give you money then. Then you have some data. You have some traction and there are people who like that early traction, they’ll give you money then.

When you have a little data but you haven’t had enough time to make the data good, very hard time to get money. So that’s why I often talk about thinking about milestones. What do you need to prove to get the next milestone and make sure you have enough money and make sure you have buffer so that you have the time to prove that out because getting stuck in the middle is the hardest time to fund raise.

Up and to the right means that there are going to be some key metrics that are going to drive your business and those key metrics get better and better over time. So, it could be the number of accounts that you’ve signed on. It could be how much money you get per account. So, whatever the main drivers are of your business, you want to plot those over time and you want to have them going, over time, increasing, up and to the right. You know, and the more steep it is, the better it is.

It depends on where a company is. So if they’ve barely launched, they haven’t launched, or they don’t have metrics yet, it’s a little hard to be up and to the right. But yet, the company’s been at it for a year and there’s something that’s flat. It’s missing. Everyone is out for traction. So when you’re investing, you want to see that whatever stage they’re in, that people have liked it, whether it’s five people, a hundred people, a thousand people. Obviously, the more the better. But you really want to see that, if B2B, that the companies can’t get enough of it and they’re sending other companies or that consumers are coming in droves.

Whatever it is, it’s nice to see that the key drivers of the business are growing and hopefully growing exponentially, if that is an option.