Decades ago, selling anything was something that could easily be done by the book. While sales itself still presented a wide range of challenges, people trying to sell knew the basic script: Present a product, explain the benefits of using such a product, explain why that product might be better than whatever alternatives are currently available, and call prospects to action. Anyone who could do this persuasively and effectively, it seemed, would position themselves for long-term success.
Of course, to sell anything in the modern era, you still need to know the benefits and value that your product (or service or whatever it is you’re selling) provides. If you are running a real estate syndication, for example, you’ll want to understand why the location for an upcoming building project will be lucrative, why investors can expect a strong ROI, and why the specific type of building will be in demand.
But these details alone will not be enough. In fact, none of these specific details will really matter until you have already attracted the attention of your prospective investor.
Nothing’s really changed from techniques for raising money 100 years ago and today. Your prospects aren’t necessarily looking to buy a product—instead, what you sell them on is a story.
While stories are not something a person can hold in their hands, they are, in fact, something that can be incredibly valuable. Our entire lives, in a way, are extensive stories—these are narratives that we can control.
If a deal can be connected to a narrative that you, and others, want to be a part of, it becomes inevitable that prospects will view these opportunities as something more valuable than a simple list of numbers.
It goes something like this.
By adding one simple detail to a pitch to raise money for a deal, that deal becomes more attractive. For example, you might say, “I have an apartment building deal that we are raising $5 million for. Projected returns are 17% internal rate of return (IRR), 1.9x equity multiple for this investment.”
Or you might say, “I have an apartment building deal we are raising $5 million for. It is a distressed deal where the owner must sell in a hurry because they are in default on their loan and in danger of losing the property to the bank. Projected returns are 17% IRR, 1.9x equity multiple.”
The second description will raise more money easier than the first because, while the returns serve as the bait that attracts investors, having a story creates the hook upon which they will be caught.
What Is Storyselling?
Perhaps one of the reasons that the value of “storyselling” is often overlooked is that, because stories are intangible, it is difficult for us to conceptualize (or quantify) things—such as stories—that we cannot physically touch or hold. But when all else is equal, it’s clear that properties that are accompanied by a compelling story will attract significantly more attention than properties without one.
By finding a way to animate a property and effectively make it real, the property is able to distinguish itself from the many comparable investment options available, fundamentally shifting the demand curve (without even needing to physically change the property itself).
While we may not be able to assign an exact numerical value to a story—it would be foolish, for example, to claim that a story is worth $50,000 or any quantifiable amount—it is clear that this value still exists. And in a hyper-competitive market, every single source of additional value (even those that are difficult to measure) will be worth pursuing.
Because of this, infusing the story and the property into one comprehensive product should not be considered icing on the cake; rather, it should be considered an integral, necessary part of the entire marketing process.
Learn how using YouTube to tell your story can help build relationships online with investors in this short video segment from a conversation the author of this article, Adam Gower, had with Gary Lipovetsky who manages multiple million+ YouTube channels.
The Value of a Narrative
Inevitably, recognizing the need for storyselling will be the easy part. The hard part of this process is coming up with a story that is authentic, beneficial, and relatable for investors. The story will need to be something that is deeper than what an investor can find on paper.
Investors want to make a profit, but generally, they also want to feel good about doing so. They want to see that not only were they able to earn their expected rate of return, but they were also able to get an edge on fierce competition. This is especially true in the crowdfunding space, where successfully completing a project will typically require getting many different people to be on your side.
The art of story selling will not replace the financial component of attracting investors, but it can certainly supplement what is being promised on paper and, consequently, help build a competitive advantage.
Fortunately, in today’s highly diversified world of media, there are many different platforms where storyselling can take place. YouTube, for example, gives sponsors an opportunity to put a human face behind a project, offer visuals showing what the property will be like, and generally increase their credibility. Other platforms, such as LinkedIn, Facebook, Instagram, BiggerPockets, and others, can also help serve this very important purpose.
There is rarely a single variable that causes someone to invest or not invest. This decision will usually be the result of many different, often competing, factors. However, there is no denying that, of these many variables, the story behind the property will be among the most important.
If the project itself lacks a relatable “why,” very few investors will be interested in considering the “how.”
Have you used storyselling to close a deal?
Tell us about it in the comments.