Effectively developing your Impact Narrative - for investees and funds
How do you tell the right story to investors?
And by investors, I mean everyone who trusts you and across your stakeholder groups.
Communities invest in their leaders, employees invest in their bosses and the company, Angel and Venture Capital investors put their faith in the startup team, Institutional Funds look to a raft of market indicators, societies look to Governments and Regulators - all of these necessitate effective communication.
Particularly useful, is ensuring the story of an investee is told well in the context of an investing fund’s strategy, as this encourages further capital commitments from those who trusted the fund in the first place!
Let's look at this in distinct stages:
Operations & Value Propositions >
Fundamental Strategy & Key Strategic Drivers >
Impact Measurement and Your Theory of Change >
Effective Engagement and Building for the Second Circle
Operations
A simple, useful starting point from an operational perspective is Strategyzers business model canvas - you have likely worked this out already.
However, if you’re not already clear on it, watch the 2 minute explainer video and fill in the template at https://www.strategyzer.com/library/the-business-model-canvas.
The Value Proposition is a subset of the Business Model Canvas, and I won’t go too deeply into it here as if you’re reading this you likely have a going concern of reasonable size, and the Value Proposition you provide to clients is clear to you, if not, there is work to do here (and I’d be happy to help).
…with that sorted:
Fundamental strategy will consistently answer
1. Why do we exist?
2. How do we add even more value?
3. What does future success look like?
The second question can be a challenge for early-stage businesses though once you have a solid fit between your value proposition and a customer segment, it's reasonable to expand on this.
Key Strategic Drivers
Now thinking through your stakeholder matrix, which when mapped properly will include everyone in your business world, including your investors, clients, team members and regulators, it's time to go deeper and generate insights from which you can build an effective framework to guide future decisions.
Most marketing focuses on Relatability and Attention, this is starting at the wrong end!
People need context, stop presenting solutions to people who are not yet problem-aware.
You can work through the questions underpinning each of these areas for free via http://bit.ly/investortrustscore, try it with your team members and see how you each score differently, and what the gap is between your perceptions of how well the business or fund is going.
For example, how would you rate yourself out of 10 in the following;
Positioning
Potential clients see us with the same significance we see ourselves
We are aware of the macro trends affecting what we do, and those coming to disrupt us
We are working on and dealing effectively with immediate and near-term industry challenges
Clients can clearly differentiate between us and our competitors, our advantages and disadvantages are obvious
Direction
The people who need to, clearly understand who we are AND where we are going
The scale at which we operate and for whom is clear
We are confident in verifying our impact and know the gap (if any) to best practice
People know we are being as effective as we can be with their money
Impact Measurement & Theory of Change
How do YOU define Impact? For some they mean directly improving outcomes for a stakeholder group, for others, they seek to comply with a particular methodology, others still mean feeling good about themselves and doing business they believe in.
This spectrum is a critical thing to become comfortable discussing, as everyone has a different take on it, and always will, particularly as they go through learning, adopting methodologies, responding to regulatory requirements or taking charge of different pools of capital with changing motivations.
Be prepared to be curious, to listen and seek to understand from those you are in, or planning to be, in business with.
Some useful examples that I’ve personally done include;
Impact Management & Measurement for the SDG’s - Duke University
Innovative Financial Solutions for Resilience - IIX Global
Measuring Impact for Sustainability - IIX Global
and check out Adventure Finance too.
A great question is whether your Impact Measurement framework informs your Theory of Change (TOC), or if you are applying a Measurement Framework to substantiate your TOC!
Either way, when it comes to Impact, I’d suggest your Theory of Change may blend the operational insights you have from the Business Model Canvas, the answers to your Fundamental Strategy and Key Drivers, and is validated by your Measurement framework.
Arguably this measurement framework could be the regulatory environment in which you operate, which as of January 2024 for sustainability standards looked something like this;
And, make sure to look at the International Foundation for Valuing Impact!
Effective Engagement and Building for the Second Circle
If you can have a reasonable go at answering the questions above, the best way to convey them to your audience is to put them in an easily shareable format.
And you know the most engaging, readily watched and easily shareable format in the modern world today, right? Short video, well arranged through compelling collateral.
The trouble is - and why I put ‘effective’ in the title - most corporate video is trash.
Every time I see another talking head video of a wooden corporate leader, with terrible audio, reading a teleprompter and looking off-camera at a distant person standing like a ghost over my shoulder, I want to bang the desk screaming “WHY?!"
Your viewers are largely on their phones, giving you their precious time, so speak directly to them, and do it passionately and honestly.
But how? Fair question. You need to do unscripted interviews, and ask insightful, leading questions.
Don’t expect your colleagues who aren’t professional actors to learn lines and deliver them to a degree that people believe. Otherwise they would be at the Oscars, not at work next to you.
And having done the work above this, you already know the story you’re all telling!
From that, you can derive the leading questions to ask, or I can if you need help.
With your strategy locked in, and knowing why you matter and who for, when your CEO goes on camera with your marketing team, or takes the stage for the next investment conference you’ve sponsored, or pitches your startup, they can be themselves.
“Tell me, why is it so important that we regenerate our soil?” - ask an AgTech leader that on camera and watch them come alive. Don’t give them a script. If it’s not good enough, ask them again, and if they are a bit stuck, make them do starjumps and encourage them to loosen up a little, have fun with it.
Most importantly, do the work.
Get it right once, then have it watched a thousand times.
It’s about respecting the trust and time of your stakeholders.
By asking relevant leading questions of your stakeholders, you can paint the picture of where you are heading, using the voices of your people!
Do you truly believe the scale at which you operate and for whom is clear? Get a person you impact who represents that scale on camera, and ask them to talk about how their life or business has changed as a result of working with you.
This will leave contrived marketing in the dust as far as effectiveness goes, and if you use a platform like Wistia, which is essentially a private business Netflix that people can binge-watch, they won’t get distracted by cat videos or random adverts interrupting them on youtube, and you’ll have useful analytics to empower your sales or fundraising.
Work through your stakeholder matrix, asking questions that will detail the 4 areas of Positioning, Direction, Attention and Relatability, and you’ll have a solid resource that achieves the fundamental necessity of good marketing - it’s built for the second circle!
Building for the Second Circle
When you are interacting with someone, you and they are the first circle. Once you leave the room, and that person interacts with their peers, colleagues or family members, and they talk about you, what have you got for them that conveys your unique take on the world? This is the second circle. Do it well, and the second circle passes it to the third, fourth and so on.
Watch this short video on it to go deeper on the Second Circle.
You can see examples of this used to close a $34M climate-tech fund here, the integration throughout a website of another used to secure institutional capital, as well as their Information Memorandum containing the videos, another for an investee here, and another for one of the worlds best Impact assessment firms.
You can see a broader collection of this style of unscripted interview shaped for business outcomes here and keep in mind, when you’re providing a download, insight or IM to your stakeholders, don’t just ask them for an email address and first name.
Design your system so users can tell you relevant information, ensuring you have better, actionable data.
If you’d like an easy-to-follow 1 page summary of the above, you can download it here.
Question: How was reading all that? Inspired? Motivated to act? Overwhelmed and confused? Do let me know!