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Entrepreneurs are generally comfortable discussing their business models, financials, and marketing strategies in great detail with investors. But their thorough investment pitches rarely include comprehensive information about the founders themselves.
That’s because to avoid coming across as self-aggrandizing, many leaders amplify the benefits of the product but don’t emphasize the value of its creator. Unfortunately, being modest only frustrates attempts to secure funding quickly.
Therefore, your priority when raising money should be to talk not only about your business, but also about yourself.
Here are three reasons why expressing your value proposition as a leader will position you as a confident entrepreneur worthy of affiliation in the mind of those who hold the purse.
Related: How Talking to Yourself Can Help You Be More Successful
1. You’re the real competitive advantage, so own it
Talking about yourself will help you raise money faster because you are the secret sauce that sells your brand. A firm is more than just an office, business plans, furnishings and stationery. Your enterprise is a combination of physical assets and intangibles that include your unique value proposition and, most importantly, the people behind it — with you at the helm.
According to a survey of hundreds of investors conducted by Stanford University, the founder and management team are the most important factors driving decisions to invest, as well as the entrepreneur’s experience and passion.
But how authentic and valuable is the pilot of this ambitious venture? No one knows unless you tell them.
Talking about yourself in greater detail shows potential backers the more intimate aspects of your operation, like your core competencies and values. It supplies them with critical information about your company culture and lets them appraise your startup with certainty.
An investor who knows and appreciates your organization’s intrinsic worth can quickly decide when and how much to invest.
2. Intimacy fosters trust
Would you give your hard-earned money to someone you don’t trust? Probably not, and the same holds true with investors.
A study of 600 executives conducted at Baylor University found that cultivating trust depends on a business owner’s technical competency, their ability to resolve conflict and the overall honesty and benevolence of the people behind the enterprise.
The study also noted that in the introduction stage — when two businesses are first meeting — buyers strongly consider a company’s reputation in order to calculate the risks associated with trusting the seller.
Though earning trust may feel like an insurmountable task when you’re starting out, it’s essential in acquiring capital. Fostering trust requires building a relationship with investors so they know more about you from both a professional and personal perspective.
To secure funding in a short time, you must be open to sharing personal details about yourself with investors, such as:
your background and value system
your inspiration for starting the business
your motivation to push through obstacles
your experience and track record
your mission and vision
Investors want to partner with people and companies whose values, objectives and missions align with their own. In fact, all respondents in a global institutional investor survey administered by Harvard University emphasized the role of environmental, social and corporate governance (ESG) factors in how they perceive a firm’s integrity.
The study also notes that 95% of investors use their regular engagement with the management team to evaluate a firm’s purpose and corporate culture, listening especially to how top representatives “communicate their purpose.”
In other words, interweaving your personal story, values and mission into your sales pitch can work wonders in developing rapport. A financier whose trust you’ve won will consider investing in you and your company over the competition.
Related: How to Use Storytelling to Sell Your Brand and Vision
3. Investors want to know if you can handle the stress
Running an enterprise and raising capital are inherently stressful. Operating a startup and being accountable to investors can be even more nerve-wracking.
Stress, however, clouds effective decision-making. Validating this premise is an experiment that observes how participants who were given oral steroids to replicate elevated stress hormones made much riskier decisions compared to individuals who only received a placebo.
Your future funding partners know the strain that comes with your position — they’ve been there. So when listening to your pitch and observing your mannerisms, they’ll try to gauge your ability to handle the pressure. An entrepreneur’s nervousness is off-putting to investors, and they may interpret timidity as an inability to cope with the demands that come with the territory of business ownership.
Rarely would an investor partner with a company whose captain folds under intense but logical questioning. Their fear is this: If I intimidate this entrepreneur this much now, how would they handle the tough decisions and negotiations involved in acquisitions, development, and operations?
Fortunately, you can influence how investors perceive your fortitude. To radiate strength and ease your nerves, take the time early on in your pitch to talk about yourself and confidently project what sets you apart.
Related: How to Raise Money Even When You Don’t Have ‘Traction’
Lead with you
As an entrepreneur, particularly one asking for money, you must sell investors on the greatest asset under your control: you.
Ventures come and go, and investors know this. That’s why they care more about the people behind the organization than anything else you promote in your pitch. To raise money as quickly and effectively as possible, emphasize who you are, your tenacity and the value you represent.