Asking Investors for Funding: A Strategy for Success
Asking Investors for Funding
Finding funding for your startup company, whether it is a software company (Like Hook Security), a Managed I.T. provider, or something completely different, is a necessary challenge to tackle. Without operating capital, your organization will be stifled and suffocate under expenses and outlays. You will be unable to hire or retain top talent, invest in research and development, or properly pursue go to market strategies. Cash truly is king when it comes to operations. Asking an investor for funds is just like any other sale – but there is a lot more on the line for winning the deal. Making sure you have a proper strategy for success around presenting your data to potential investors is a must.
I had a chance to sit down with my friend Zach Eikenberry, CEO of Hook Security, about how he has pursued funding for their operation on our webinar series, The Thursday Process. He shared some insight about how you must create a narrative to go along with your data if you hope to attract an investor successfully. This article expands on that insight.
Data without a Narrative is Noise
Data is a special topic at Richardson & Richardson – Carrie, my wife, business partner, and far better half, has spent the better part of 10 years compiling a fantastic database that we utilized internally to support our go to market efforts, as well as those of our consulting client base. Her database has over 35,000 company entries around the I.T. Channel, including things like decision maker contact details, partnered vendors, and other similar data points.
Looking at that data, people might say “Huh, interesting stuff – that’s worth $30,000 for some contact details.” Indeed, without a proper presentation of the true value of the dataset, people fill in what the value is (contact details) instead of what the value could be (patterns, trends, and analysis).
Creating a Narrative
If I was to go one step further on my previous example and say that not only was there data points around contact details for those 35K companies, but I could tell you which ones took sales appointments versus didn’t, as well as what issues and challenges companies of certain sizes identify and care about via self-provided details and indication of interest through multiple mediums such as email and webinar attendance, AND provide timelines on how people choose to engage with sales teams over 10 years of historical data – your opinion of that data might significantly change (if that’s of interest to you, book some time at https://randr.consulting/connect and we can chat further).
If I then said that every time your sales team takes a demo call, it costs you 3 hours of payroll time to properly move forward on that lead whether they buy or not, and that you’re closing 3 out of 10 leads that come in the door, and that the other 7 leads are not even remotely close to your target client profile, you would have awareness of a problem that this data could solve. What if 7 out of 10 leads were qualified, and your team knew which ones where likely to engage because of those patterns and trends we discussed in the paragraph above this one? Now this data sounds like a goldmine.
That my friend is controlling the narrative.
People buy feelings, not facts. If you create a narrative to go along with your data that helps someone arrive at the feelings about your product, service, or company that you want them to experience, you can predict and influence the outcome of that conversation. Put another way, if you control the feelings, you can control the outcome.
If you’re struggling with creating narratives around your data, offerings, or company, figuring out how to effectively present that messaging to the marketplace, or getting alignment with your team on the need to invest in the effort, Richardson & Richardson can help. Check out our case studies for stories of organizations that we’ve assisted with similar issues and download our white papers for deep dives on tools you can use in your organization. If you’re wondering where to start, book a complimentary session with one of the Richardsons today to come up with a plan on how to move forward.
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