Why Buy Anything? Why You? Why Now?
Three WHYs for Fundraising, Sales, and More
I recently heard Mark Suster from Upfront Ventures share on a podcast three key questions to answer when it comes to fundraising and sales. Whether it’s for raising for a new startup or fund, enterprise sales, or convincing a client to work with us at the agency, I’ve seen hundreds of pitches and given a fair share of my own, so thought I’d share how to use these three WHYs as a useful framework.
Let’s say you’re pitching a potential investor named Frank to invest in your startup.
Why Buy Anything?
When pitching a startup to any potential investor, one of the most important things to do first is to establish your target investor set and qualify who you’re talking to. Research why Frank should care — has he invested in something similar? Maybe Frank has written blog posts or tweets about the problem. Is there something about his background that might make him resonate with the mission or problem? If you don’t qualify Frank first, you’ll spend a lot of wasted time trying to change your pitch for an already-skeptical audience.
Investors want to invest in opportunities that can make them a lot of money. That means the potential market opportunity has to be big. Fundamentally, a good pitch is a good story. Many founders demonstrate market size with a slide showing a $XB+ opportunity. While statistics and figures can be helpful, demonstrating the problem or market with a personal story or a specific customer’s pain point will help Frank emotionally understand, but more importantly, remember the opportunity at hand.
Why You?
Once you’ve demonstrated that the market opportunity is large and convincing, prospective buyers and investors need to understand why YOU and your product are the right ones to bet on.
This is all about differentiation. What about your team or expertise gives you a clear advantage? Can you demonstrate progress through a demo or past results/experience? In marketing speak, what’s your unique selling proposition?
“Why you” is also a good time to leverage references and external people who can vouch for you, who can champion who you are and why you’re a good bet. Ask mutual friends and references to ping Frank and stay top of mind in Frank’s social feeds and inbox. Reinforcing the “Why you” is key, and external positive reinforcement is extremely helpful.
Why Now?
Every good opportunity has a “why now” — whether its market conditions, user behaviors, or macro forces that pave the way for the opportunity to flourish now. However the other dimension to “Why now” — why someone should invest in or buy now into the opportunity — can be the hardest to answer. There’s always more progress that could be made, whether it’s more customers or more traction.
In the case of fundraising, creating scarcity and FOMO for prospective investors can help. Being oversubscribed with interest or being willing to walk away is key. Every investor needs to know there’s a chance they could miss out if they don’t commit now.
These WHYs — why buy anything, why you, why now — are crucial to what distinguishes a great pitch from a mere good one. If you want your pitch to stand out, make sure you’ve thought through and nailed these answers.
If you have additional thoughts or are interested in discussing any of the above, please reach out at karine@slope.agency!
