In hindsight, I failed to highlight the importance of entrepreneurs being able to effectively narrate what their company actually does. While admittedly this falls into the category of “duh, obviously”, I’m still seeing too many talented founders fall into buzzword purgatory when describing their company.
Here’s an example of an email I recently saw from a founder soliciting investment (For confidentiality, I’ve changed the name/business model, but left in the buzzwords):
“Healthchat is a disruptive multi-dimensional cloud based platform that provides a transformational offline and online experience via highly curated social communities within the healthcare, wellness, and medical sectors, while providing enterprises with access to valuable, granular level big data analytics. Led by (Insert name) and advised by top healthcare expert (some brand name), our innovative technology promises to deliver a best of breed solution to the multi-billion dollar healthcare vertical.”
These types of descriptions drive investors crazy and do a massive disservice to the entrepreneur and business.
The most common reaction investors have to emails like this is, “Hmm. I have no fricking idea what you do”. And instead of replying with clarifying questions or a request for a meeting, investors often ignore or delete these emails altogether. The rationale is if you can’t easily describe your business and mission to me, how can you possibly sell it to prospective customers and employees?
Fortunately, this is something that’s easy to remedy. Here are a few ways:
Eradicate common buzzwards from your vocabulary
We tend to rely on them too much (myself included), but they end up serving as meaningless fillers, distract from the message, and are discounted anyway. Here are some of the words that you should do your best to avoid:
– Big Data
– Next generation
– Best in breed
– Unicorn (please, please never use this).
Write the email as if the investor is dumb
While of course this isn’t (usually) true, you must assume that he or she knows nothing about the business and needs a “your company for dummies” version. Keep the company description simple and short with the following structure:
-Team: Who you are (1 sentence)
-Problem: The problem you are solving, and why (1-2 sentences)
-Product: What your solution is (1 sentence)
-Market: Who would use it or who is using it, and who will pay for it (1 sentence)
Here’s an example of this using the fictitious company described above:
“With a founding team comprised of former Google engineers and Stanford doctors, Healthchat enables physicians to treat patients remotely as effectively as in the clinic, which dramatically reduces expensive and unnecessary ER and doctor visits. Our technology quickly integrates with existing hospital ERP systems, and provides doctors with a dashboard that allows them to interact live with patients, view medical records, fill prescriptions, etc. We are currently live in over 50 clinics and hospitals and expect a larger roll out in Q2.
No buzzwords, and much simpler to understand – putting aside the business itself, this type of conveyance has a much better shot at a positive reply. Now go out and get your dream funded.