For startups, a good story can be the difference between investment and starvation

Your startup's story can make investors fall in love with you.

We’re big believers in the power of a good story, obviously. Yet even we were surprised when a finance colleague said he knew of many promising companies—not just one or two—that have failed to land investments because they didn’t have a good story.

His comment haunts me—all that lost potential. Entrepreneurs can hardly be faulted for thinking they’ll nail investment with compelling market data, new technology or great product, and a strong team, but that’s not enough. Investors put money into companies they love, and love does not live on spreadsheets alone.

So what do investors look for in a startup story? What drives you and how the world will be better when you succeed. The challenges you’ve overcome and what you’re facing. And why now is the time to do what you’re doing. These are all elements of a standout brand story. (For more on that, see our infographic.)

Of course, investors also want answers to nuts-and-bolts questions: What’s your competitive situation? Why will people buy this? How will you build your brand? Why are your growth projections realistic? Do you have a moat around your intellectual property? And, in the impact investing world, what’s your positive impact and how are you going to sustain it? (Finalists pitching at the 2017 Fish 2.0 Innovation Forum heard variations on all these questions from investor judges.)

Ideally, your story will wrap the answers into a brand narrative. Here are three keys to telling a story that resonates while bolstering your case for investment.

1. Lead with people, support with numbers

Yes, investors want to see a lot of numbers from you before they write a check. But first they have to believe people want what you’re selling. Your story needs to show you know how your target customer thinks and feels. You may be your target customer. Or you may know them as well as their own mother does.

Love the Wild CEO Jacqueline Claudia tells her customer story deftly, and it’s one reason her company went from “mostly vision” (her words) at the Fish 2.0 competition in late 2015 to a rising star in the seafood world today. (See her tell the Love the Wild story here.

2. Articulate a clear and inspiring vision

What will the world (or the portion you’re addressing) look like when you succeed? Describe the future state when you’ve changed lives for the better, opened up a whole new market or achieved whatever it is that’s making you want to devote years of your life to this venture.

We’re working with a circular economy startup, Pathway21, whose vision is a global manufacturing revolution that makes material reuse standard practice, allows companies to get top value from all the resources they buy or generate, and eliminates materials going to landfill. That’s a vision with a scope and benefits worth investing in.

3. Let your passion loose

You may have heard that investors invest in people, not companies. That’s because building a business is freakin’ hard. Investors want to know that you’re in it fully, for the long haul. If you have an inspiring vision, your true passion for your enterprise should come naturally—just say it out loud.

Sara Rademaker, CEO of sustainable eel-farming startup American Unagi, had the Fish 2.0 Forum audience eating out of her hand as soon as she expressed—with real feeling—her love for the wriggling pile of eels that opened her presentation.

Build a story that weaves these three strands together and gives shape to the company you want to build, and investors will have a feel for why you and your business are worth investing in. They may even fall in love—and that can mean the difference between a deal or no deal.