Why financial storytelling is so important when you are looking for funding
What makes the difference between founders who raise and those who don't, is the ability to tell a story with their numbers.
Take this example, Founder A presents a series of numbers but doesn't have the story to back them. They don't have the understanding behind the numbers.
Founder B presents their numbers and tells the story behind the numbers.
Where do you find yourself right now?
If you are like Founder A, your chances to find investment are low. If you are in the same position as Founder B, you are more likely to get funded.
So how to tell the story behind your numbers?
For example, if you say that you expect to make £200k of revenue in year 2, without a story it is highly unlikely that an investor will believe that you can make this amount of money.
Now if you say that you will make £200k of revenue in year 2 because you are targeting to attract 5,000 visitors on your website every month and expect the conversion rate to be 3%, while each of your customers spends on average £110, you have a story that backs your numbers.
That is 150 customers a month, so £16,500 of revenue a month, so about £200k in the year.
Thanks to the story, you've connected your numbers together. This allows an investor to understand what it takes for you to get to your numbers.
So what is the reason for that?
Because as human beings we connect everything through stories. Stories are what link independent facts together into a coherent sequence of events. The opposite is random facts.
And an investor is a human being first and foremost, so the more you can connect with them through stories, the more they'll be engaged with you.