Storytelling

a Mexican VC
4 min readMar 20, 2022

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The role of storytelling while fundraising

Credit to bombermoon via istockfoto.com

Throughout human history, we have told each other stories. Before we invented writing, we learned through stories. This is how we communicated and shared information. Some stories were told face to face, some around campfires, and others while hunting and gathering. The first stories were told through pictures painted on caves, then through songs and now we are constantly telling and receiving stories through all the fine arts and our everyday social interactions.

Storytelling is an essential part of being human. It is what connects us emotionally to what happened in the past and what happened to others. Some say storytelling is what differentiates us from animals. Stories help us understand each other. Stories make information stick and help create memories.

Every single day we are entertained by stories: whether in a book, a film, a play, a series on your favorite streaming app, over dinner with a group of friends, or even in our own heads through the stories we are constantly telling ourselves. Through stories we become empathetic, we become followers, we become clients. Stories engage and influence us.

Psychological and neurological studies have shown that while listening to a story, experiences are processed in the brain as though they were our own. Our brains go through the same processes and produce the same chemicals as if those experiences were happening to us in real-time.

So, if stories are the best way to reach people, persuade them, and bring them on to your [insert whatever word you want here], why aren’t we taught to be better storytellers? If we think of the greatest leaders in history, most were amazing storytellers. They told stories that built connections and achieved followers that listened to their stories.

But what does all this have to do with fundraising for your startup? Let us never forget that venture capital is a “people business”, as VCs we primarily invest in people and teams. We surely also invest in ideas and companies, but we are engaged by the people and the stories they tell.

Therefore, I strongly believe that one of the most important traits in a start-up team is the ability to story tell. (Today, I honestly believe it is one of the most important abilities we should have as human beings). In an environment with ever-increasing levels of competition for attention, capital, talent, partners, and customers, the ability to tell your story and your company’s story in a way that attracts people is truly crucial.

As such, I have put together some tips that I believe will help in the storytelling process while raising capital:

- Tell your pitch as a story. Stories have a certain structure: beginning, middle and end. By having a certain order, your story (and therefore your pitch) will be familiar, predictable, and comforting.

- Make it memorable. By telling an engaging story rather than merely reciting dry facts, we remember the details more clearly.

- Make it clear. We relate to stories we understand. The clearer your story, your problem, and your solution, the more engagement will occur and hence, more empathy and likeability. Don’t overcomplicate your story. Don´t overcomplicate your solution. Less and simple is better and more.

- Start with a hook. How many times have you quit watching a television series because you weren’t “hooked” after the first 30 minutes of the show? How many times have you stopped reading a book because you weren’t engaged by page 25? The same thing happens with your pitch: you need to hook your audience at the beginning of your story.

- Tell a story that other people are going to want to tell. Word-of-mouth is one of the most powerful marketing tools, and all it really comes down to is other people telling your story.

- Tell your story with passion and excitement. Add some drama if you must, or make it personal, but always make sure you get our complete attention.

I think it’s important to note that stories are not necessarily fiction, and in the case of telling your startup’s story it shouldn’t be. In the case of startups, the stories must be real, and they must be backed up by data and facts. Any serious investor will ask you to back up your story. But the same facts can be revealed in many ways: all experiences can be told in very different ways. The exact same experience that you and I lived can be told completely different.

Find the story of your company that triggers our imagination and taps into our creativity. Find the story that engages us and makes us want to be a part of it. Find the story that makes doing whatever you are trying to do worthwhile. And once you’ve found it, tell it to whoever will listen.

I can’t wait to hear yours.

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a Mexican VC

Alejandro Diez Barroso. General Partner @ DILA Capital, a venture capital firm focused on Latin American and Hispanic startups.