I was recently talking with a startup who had a photo service.
He spent $3K to test out his business model. He found he could sign up one photographer for every dollar spent and how much revenue he could generate with each one.
As he spoke, I found myself engaging with his pitch when he had numbers. He talked about how he spent his $3K to demonstrate the cost of customer acquisition and the average lifetime use.
Later in the discussion, I found my eyes glazing over when he started talking about how “everyone loves this service.” “It works great.” and other statements that spoke generally about the product but not specifically about the business.
With investors, anecdotes tell, but numbers sell.
Use numbers when you talk about your business. Demonstrate your expertise and the results of your research with specific facts.
Show the unit economic numbers around your business model and make the case that you have a business that works.
Make sure you don’t show up with general anecdotes as you may see the investors interest wane.
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Hall T. Martin is the Director of Investor Connect which is 501c3 non-profit dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.