from The Health Care Blog at https://bit.ly/3QIZDHY on August 18, 2022 at 02:25PM
BY MICHELLE SNYDER
Unless you have been off the grid for the past few months (which frankly sounds kind of nice right now), you know that the digital health market has changed dramatically. While not surprising to those of us who have been through the boom-and-bust cycles of the past two decades, it nevertheless has been an awakening for many investors and entrepreneurs.
As an entrepreneur, there are some things you cannot control – the macro-economic climate, supply chain disruptions and narcissist led wars halfway around the world. But what is entirely within your control is how you tell your company’s story and your ability to make investors want to join you on the journey.
As a longtime storyteller for several digital health companies and a current story listener (aka investor), I’ve been thinking about this topic a lot lately. Though the word “storyteller” can have negative connotations for some people, I value and appreciate great storytellers who engage me right off the bat, get me excited about the “why” and clearly articulate why it’s in my best interest to invest in their company.
The art of storytelling has always been important, but in the current digital health funding environment, it is quickly becoming essential for success. Are you telling your company’s story in the most effective way? Read on to find out.
Know Your Audience
So simple to do – yet so often overlooked. Before you even pitch your company to me, have you looked at my firm’s portfolio? Have you checked to see what companies I have personally invested in? Have you read any articles I have written or quotes in publications to give you a clue as to what excites me? Have you shot me a quick email to ask if there is anything you want to make sure is covered in the pitch?
Even taking 30 minutes to do some research on me (or whomever you are pitching) allows you to 1) focus your pitch on things that I am most likely to be interested in, 2) get me to talk about my companies and viewpoints (investors are people too – they like to talk about themselves and their investments), and 3) make sure you don’t end the pitch without hitting on at least one topic that I really care about.
Show Me Your Passion
As an entrepreneur I know you may be tired. You’re likely working 80-100 hours per week and haven’t had a real vacation in a long time. I’ve been there – I get it. But I also need to see and feel your excitement and passion. When you tell me the story, you are telling me more than just what your company does. You are also telling me whether I believe that you will be able to inspire and motivate your employees through both the good and bad times and whether you will be able to inspire future investors and sell your vision.
I have had a few pitches recently with interesting companies, and I was fully bought into the future vision and business model. The problem was I was more excited than the CEO. As your investor, I will always be one of your biggest champions, but I can’t be the best champion. That’s you.
Make Me Care
When marketing a product, the customer should always be the hero. It’s no different in fundraising. Make the investor believe that they can be a hero too. That they not only have the chance to make a great return but have the opportunity to be part of something that could be game changing for patients or the industry.
Take a page from Simon Sinek and “Start with the Why”. People (investors, customers, employees) won’t truly buy into your company, product, or service until they understand the WHY behind it. I obviously still care about the WHAT, but I will care a lot more if I am bought into the WHY.
Forget About the Deck
I’ve been there – reworking a deck for days on end to get just the right words on the page. Having a solid deck is important but frankly what’s more important is how you tell me the story – what you say, how you say it, and the dialogue we have during the call. Don’t spend so much of your time perfecting the words on the page that you neglect practicing the story. The more you practice, the easier it will be for you to go “off script” which I guarantee happens in pretty much every good meeting I have been in.
Don’t Wait To Tell Me The Punchline?
Most of my favorite books have one thing in common – I was drawn into the story early. It’s no different when fundraising. Don’t wait until the middle or end of the story to get to the good stuff (e.g., your rock star team, fantastic outcomes data, recently signed massive 3-year contracts). If you draw me in upfront, I am not even tempted to check email and am listening more intently to your pitch. Always assume you may not make it all the way through the deck – don’t save the best for last.
“Choose Your Own Adventure”
I loved reading these books with my son when he was little – the possibilities were endless. As an investor, however, I get more confused than inspired if there are too many options in your story. Yes, I want to believe there is significant upside in the business and know there could be multiple future customer segments that get you to “a billion dollars”. But I also need to see prioritization and focus (now more than ever!) and feel comfortable buying into the initial path you are taking.
How Does the Story End?
So, you showed me your passion, made me care and I can envision being part of your story. How does the story end? As an investor, I am always thinking about what an exit looks like and “who buys this company?” Please don’t be the entrepreneur who says, “let me get back to you on that” or “I’m not sure, that’s a great question”. You need to have a few ideas (right or wrong) based on who in the market would value your company’s customer base, technology, or expertise. As an investor, I need to believe there are multiple (not one!) possible exit opportunities and a few deep pockets that would see value in what you will create.
I’m not going to lie. The next few years will be more challenging for digital health companies looking to raise money. The bar has been raised and there will be more scrutiny on your business. Great storytelling is not necessarily going to help you if your business doesn’t make financial sense in the first place. However, for those companies who are solving a real problem in a cost-efficient way, investors will always be looking for passionate entrepreneurs who can make them a hero.
Michelle Snyder is an investor at McKesson Ventures. Previously she ran marketing at Welltok and Epocrates.