At Oxford Capital, we see over 2,000 potential investment deals per year, equating to more than 70% of industry deals in our investment sector (Crunchbase). Our investment strategy is generalist with a focus on technology, and our investment team is accustomed to all sorts of specialised jargon and innovative ideas.
That said, it is surprising how many founders and tech entrepreneurs struggle to communicate their innovation stories effectively. Technical breakthroughs can be hard to describe and harder to understand. And, even though, with this many opportunities to consider, we’re keen to understand the main features of a proposition quickly, we pride ourselves on being able to get to the bottom of all the opportunities we are offered.
After all, as an active investor that partners with its investee companies, playing a part in driving the journey towards success, we can help with messaging, as long as the investment case is strong.
Nevertheless, at this stage, a very complex approach is not necessarily impressive. In fact, it can be frustrating. It’s important to remember that plain, clear writing is not dumbing down ideas. According to the Harvard Business Review, “If you are looking for a PhD in brain science to communicate brain science, then you’re not looking in the right place.” For a wider audience outside a project, simple language and straightforward writing will draw a broader audience. It’s important to keep it simple and to build a narrative from the foundation up – one idea at a time.
We know that explaining a technical topic is not always easy. In fact, getting across complicated detail in a comprehensible way, can be an art. And this is an art that founders should master. Our investment team have developed deep domain knowledge in a number of areas and through our due diligence we are used to grappling with detail and complexity. But effective communication of the story is a cornerstone to building the business. Founders will be surrounded by people who want to see their business succeed and the story can become the glue to amass an increasing group of stakeholders – from customers, suppliers, investors and others. A good story will be retold and will spread faster.
Unlike us, the majority of individual investors will not have the expertise or time to dig deep into the technology, understand the sector jargon and gain some proper knowledge of what really underpins the proposition. Of course, that’s where the value of our due diligence comes in.
So, the message to founders is, technology is great, but don’t underestimate the power of the words in your search for funding. And the message to investors is, unless you happen to have a deep knowledge of the nitty gritty of the investments you are making, it’s a good idea to leverage the expertise and due diligence of an experienced investment manager like Oxford Capital.