How To Create The Financial Story Behind Your Idea so that Investors “Get” It

aka, The Big Hole Most Entrepreneurs Struggle With and are Never Taught in School (Part 2)

If you haven’t read Part 1, start here.

What do I mean by “financially describing” why investors should care about your company’s goals?

It’s all about Rule 2: Professional investors see stories in numbers.

When investors read company filings like 10-K’s, they read the copy to understand the details of why the company’s state is how it is now and what management plans to accomplish in the future. But they see the financial statements and numbers as hard-core, objective backup. In many ways, the numbers carry more weight, attesting to what management will actually do.

As a startup, you won’t have as many numbers as a publicly traded company to offer up to your potential investors. That’s beyond okay. It’s expected. They know they’re taking a bigger risk by investing in an early stage company like yours.

You’ll still need to help them understand your business in numbers, even when describing the Problem your company is looking to solve, or they’ll be internally/externally pissy about the fact that you’re making them translate everything back to their native tongue.

I mean this. You can certainly say, “Map-making is a dying art and Cartography Inc. plans to bring it back to the modern age.” Sounds nice.

But to investors, stating a Problem this way is even stronger: “Traditional map-making is a declining business with low 2–5% net margin, while small-to-medium business’ demand for real-time, accurate digital mapping capabilities is growing at 18% year-over-year (according to Gartner’s report, 2015* I’m just making stuff up) with a potential for 35%+ net margin.” Hmm… big juicy financial problem just waiting to be solved. Perhaps by you.

When using numbers, try to make apples to apples comparisons while citing stats on any of your investment deck pages. “Declining” revenues vs. “18% growth” in sales, or “2–5% net margin” vs. “35%+ net margin.” It keeps the data clean and easy to interpret by your audience so they stay with you.

Another hint: incorporating the Problem’s size by using terms like Total Available Market size (or “TAM”) would be a great idea to quantify the scope of the darned Problem.

Once you’ve outlined the Problem you’re planning on solving, and why potential investors should financially care about it, you’re ready to move on to what’s probably most important to you as an entrepreneur — your kick-ass Solution.


You Solution page is really code for the details of your Vision. You can have the Solution slide be two or even three pages if you want — the overarching, big picture solution, and then more detailed bullets pages that map out how your solution will be implemented operationally and on a daily basis.

No matter the layout or whether you use one page or multiple pages, you’ll want to to showcase what your particular Solution does, how somebody uses it, and why it would be valuable to the end user or customer.

Your Solution could read: “An application that takes a user’s location and maps out the local businesses around the user in real-time, allowing small to medium sized businesses to directly advertise to consumers who are approximate to their location.”

You could add the bullets, “Serve 4x the traditional map-making market size and target small-to-medium businesses by harnessing an app structure. Encourage open forum mapping by communities and rating of accuracy by users. Grow revenues organically faster than 18% by leveraging small-to-medium business current market base.”

It’s good to be a little more detailed with your Solution description. You want to show investors that you have an execution and implementation plan. Puff statements like, “We’ll be huge,” have no place in a professional investor presentation. They want to know how.

Let me say something here that you may or may not have realized up to this point: investors are trying to decide if they want to love you. Sounds cheesy, but it’s ultimately what we’re dealing with. They want to know —

Are you emotionally, mentally, and financially mature or immature?

How intentional are you as a leader and a creator? Do you know how to build teams?

Do you engage with difficult realities like details? Are you methodical?

Are you capable of reciprocating the love, long-term, particularly if they are looking to invest equity (which means they won’t rationally expect to be “paid” back for a long, long while)?

Can they believe you? Can they trust you?

Can they love you?

If the answers to these questions aren’t evident as day in your presentation deck, you’ve got to go back to the drawing board.

Seasoned investors know that where they invest their money is an expression of who they believe in, who they’ll fight for with their hard-earned financial currency, and who they’ll love.

Before they commit, they’re trying to figure out if you’re worthy of their love and how much they want to love you. Whether you’re a good match, and together, you can create more.

To recap, we started with a Vision, shared the financial Opportunity as well as the Problem we plan to solve, and presented our Solution. At this point, you should take a few deep, deep breaths and feel thanks. You’ve done the hardest part — you’ve articulated your business to an audience that lives outside of your own head. It’s a big deal.

You’ll want to close this first segment of the presentation with a bio of Team You. Who are you? What is your role? What led you to create this Solution? Remember that every great story has a heroine, a struggle, and a purpose. Don’t be shy. Be confident in yourself and what brought you here.

From here on out, the order of the following pages can be more flexible, although each say something important about how you plan to make your Solution an awesome reality.

They are the Market Readiness page, the Competitive Landscape page, the Projected Timeline page, the Accomplishments page, and The Offer page where you straight-up ask for what you want from the current round of financing. “We’re raising $XX at a $XX valuation with these following terms.”

If you really want to impress potential investors, you’ll mention how you intend to spend their money in some detail. You can even insert this into your Projected Timeline page, where after the date of the funding, you note “Hire product development team — 4, acquire sales team — 2, launch marketing campaign…” etc.

Be open to feedback from your investors. Unless you’ve completely confused them or wowed them, you’re going to get a ton of unsolicited comments and opinions on what you’re doing and how you’re going about it.

Don’t take anything personally. Everyone is entitled to their opinion, and in their way, these critics are well-meaning people who are trying to help you do what you’re doing better. Of course, you’ll occasionally run into assholes on ego-trips too. It’s just part of the job.

Do take personally what you want to incorporate from feedback and what you do not.

In the end, your business is yours. You’re the creator, the executor, the manager, and ultimately, the reason it succeeds or fails.

Make your presentation as representative of your actual Vision as you can. If you align how you operate in your personal life, how you manage your relationships in your professional life, how you create your financial life, and how you lead in your public life, your signal to everyone, including investors, will be clear. Write a financial story for your business idea that reflects everything else that you’re already doing for your business. You’ll find believers.

First they ignore you, then they laugh at you, then they fight you, then you win. — Gandhi

Raising money is hard. Your purpose is worth it.

If you resonated with this blog, it would mean the world to me if you hit that HEART button below. I notice each one and am incredibly thankful. xo Jane

www.moneyschooled.com