The Storyteller's Playbook
Hello to all the founders, storytellers, and leaders.
It’s so good to be back writing and sharing the first edition of the Storyteller’s Playbook with you. While this won’t be an NFT you can sell quickly, if you read and implement what we talk about here on a weekly basis, you’ll be far richer in the years to come.
Over the past six months, I’ve gone deep into the trenches working with dozens of founders 1 on 1, partnering with tier 1 VCs, and studying countless books and videos and pitches to further master this craft of storytelling and fundraising. Now, it’s time to share what I've learned with you—and help turn you into the world's best fundraising founders and 10x storytellers to ultimately become what I call…
The Chief Storytelling Officer.
I believe in this so much that I've been writing my book the past 15 months with that title. That book will be launching later this year.
With this weekly newsletter expect deep dives into what I’m seeing in the fundraising world and how best to deploy storytelling to its full potential.
This week, let’s dive into why the best storytelling founders will be the big winners in a down market.
I’m glad you’re here.
Welcome to a grand adventure.
DEEP DIVE: Fundraising in a Down Market
When everyone is yelling "The sky is falling!" you should know there's a huge opportunity. A few weeks ago, we saw the YC letter "get leaked" that sent many founders into a panic. We saw David Sacks publicly post the state of the market that he gave to his portfolio companies.
Here’s the thing: Fundraising just got harder. It looks a lot more like 2013-2019 than 2021.
For great founders, this is great news—down periods create massive winners. (Just go search companies founded in recessions. It’s a crazy list of the best of the best.)
So what does that mean for founders in this market?
Three key things right now:
1. Preparation is more important than ever. You need CRMs of investors; you need to know how you’re going to pitch your concept; you need to know what your FAQs are and how to answer them; and you need to nail down all your numbers before you meet with an investor.
It pains me when a founder comes to me and tells me they need to fundraise next month but haven’t built any relationships or an intro network. It’s a recipe for failure. And I hate seeing founders fail.
Let's break this down into two different groups and how best to prepare.
Pre-seed or Seed founders raising for the first time need to spend 6-12 months building relationships with founders, operators, and investors. Join communities of other founders and start getting to know people. Warm intros matter and that doesn't happen overnight. Make sure to spend time building out which investors fit your sector and stage so that you can find ways to get to know them. Otherwise it's wasting time.
Series A and beyond founders should have a network already if you've previously raised a priced round. That being said, many founders get lazy at this stage and stop seeking out relationships with new investors. This is a mistake as the investors in those later rounds are often times different. This is also why when you raise those earlier rounds, a great founder is thinking through future rounds and which investors will follow on and which investors have deep networks to help them land the bigger checks.
2. Investors are doing their due diligence earlier than ever and only investing in the very best. That means a longer timeline for you as a founder. A runway that was one month last year is going to be three to four months this year. Do the legwork, know your business inside and out, and be prepared when the opportunity comes.
Investors aren’t just throwing money at deals after they have the first meeting (yes, I’ve had that happen with a few founders I coached last year). They want to dive in, talk to customers, and build the conviction that the founder can win. So start sooner than you think, because it’s a longer process now.
What used to be 1-3 months now looks much more like 2-6 months depending on how hot you make the deal. Think deeply about your runway and what that looks like. One big reminder is that nobody knows when the market will improve so waiting to fundraise "until the market improves" could be a death sentence for your startup.
3. Storytelling is still the biggest differentiator for early-stage startups. Simply put, this checks a bunch of boxes for investors. It shows clarity of thinking by the founder. Storytelling is an exercise in structure, clarity, and delivery. It’s why Ben Horowitz says, “The story is the strategy.”
A great storytelling founder can fill multiple fundraising rounds. They can recruit A+ talent. They can draw people into their world. Storytelling is the currency of the world’s elite. Go spend time at a dinner with a bunch of wealthy and successful people. Watch how they communicate. (It’s all storytelling.)
So at the end of the day, it’s pattern recognition for these investors.
Now don't think this means you don't have to be a great builder too. The problem in 2021 was too much easy capital going to people telling stories without any substance behind them. The next decade belongs to the storyteller-founders that back up their message with real execution.
The simple truth is that the riff-raff will get washed away.
A down market is a good thing for the best founders. Because when investors pick you—as one of the backable founders—you get a headstart on your competition that’s nearly impossible to make up.
Get to it. Do the work. And reap the rewards.
RESOURCES for Founders and Storytellers
It felt like 2021 was everyone saying the words crypto, blockchain, and web3 to get investment dollars. Times are changing as investors take a closer look at new projects, but one thing we know is that crypto is here to stay. a16z put out this great breakdown of where things are, and it’s worth reading if you’re a founder or in the startup world.
Check out this Tweet thread from Elizabeth Yin at Hustle Fund (also shout-out to her for investing in companies quickly rather than dragging the process out) breaking down valuation caps and discounts on SAFEs. This is a tricky topic for many founders as they are so focused on building the product and getting the funds that these details get missed or overlooked.
Last but not least, here’s an article on one of the greatest storytellers of this generation. Steve Jobs went from poor storyteller pre-Pixar to absolutely world-class. It’s always useful to hear other people’s perspectives on what made him such a great storyteller.
I’m glad to be back here writing and sharing with you. I hope you’re excited for what’s to come in this new adventure.
Have thoughts you want to share about the newsletter? Reply and let me know. I'll read it.
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