Why Storytelling is the Key to Your Pitch

What's up, everyone? Welcome back to another episode of Founders Journal. I'm Alex Lieberman, co-founder and executive chairman of Morning Brew. Today we are kicking off a new format of the show that I think will be absolutely killer. Here's the quick context. I asked 300 early-stage entrepreneurs a very simple question: What is the number one challenge or priority in your business today? I got hundreds of answers, many of which were repeated over. And over and over. So with this new weekly show format, the goal is simple: I want to curate the smartest founders, investors, and operators who can share proven strategies for navigating each of these priorities and problems. And to kick off the inaugural episode, I brought on a world-class guest to tackle the most common founder challenge: successfully pitching investors. Robbie Crabtree is a world-class public speaker and storytelling coach. Robbie was a trial lawyer in Dallas's D. He also worked at the New York DA office, where he tried 102 murder, capital murder, and child abuse cases. And he went on to coach the national mock trial team at SMU Law School and personally coach founders who have gone on to raise a combined $600 million. On top of all of this, he's building a business called Potential AI, which is an AI storytelling business that helps tech entrepreneurs raise capital successfully. So without further ado, Robbie Crabtree on crushing investor pitches and successfully raising cash. Robbie Crabtree, thanks for joining Founders Journal.

Alex, good to be here.

Let's hop right into it. What makes a great startup pitch?

A great startup pitch is made when an investor can see the future that that person is talking about. The reality is a pitch really is a story. But deeper than that, beyond just a story, it's actually an exercise in world-building. And if you think about this, why some of the best founders are sci-fi and fantasy lovers, because in the worlds of sci-fi and fantasy, those authors, writers, directors, whatever you're talking about in the medium, are building brand new worlds and they're making them feel like it's real. And that really is the best pitch. When an investor can feel the future and say, that feels inevitable. One of the best examples of this are the Instagram founders, and Chris Sacca talks about this, right? The story they told was about years down the line when all these people were using Instagram and what it was going to look like. And he said, I knew they weren't there yet, but it felt like they already were, so I had to get on board so that I could actually catch that train. And that really is what the best pitch sounds like. It's not a bunch of facts and figures and features and technical details. It's making an investor say that is a future world that has to come true and I want to play a role in making it get there.

I love it. And, you know, you've obviously spent time with a number of founders raising a shit ton of money. And I think depending on who the entrepreneur is that is listening to this conversation, one thing they may be wondering is like, how is there nuance based on what stage of business you're at, right? Like whether you're a pre-seed and seed founder and you have no numbers to show. And it really is like you said about worldbuilding and painting this picture because you're selling basically the investor on the future and why they trust you to attain that future. But then you start talking about whether it's Series A, Series B. And I think at least the story that people have in their heads is this is where metrics start mattering more. This is where financials matter more. How do you see the startup pitch evolving as your business evolves?

It does evolve. And that is one of the traps that many founders fall into is they rely on the story that got them there and thinking that it's still gonna work at the later stages. And the reality is it, it doesn't. It's just like you as a person grow, you evolve. And the same should be true for a story at the beginning stages, right? The pre-seed, seed, you don't have a ton of metrics, but you still have some metrics. You need to be able to use data to back up the world that you're talking about. And that really comes down to understanding how to frame numbers correctly. I always say this, numbers on their own are meaningless. I can make numbers say good or bad no matter what. And this comes back from my background as a trial lawyer. In every case I tried, the facts were the same, but the way the prosecution, me, positioned it was very different from how the defense positioned it. The facts were still the same, just like the numbers are the same. Numbers mean what we say they mean. So even at the early stages, you need to have some numbers, but they're gonna be more about the opportunity size, right? Whereas the numbers you're talking about in later stage is gonna be the numbers of your business. It's gonna be all those metrics that we're talking about, right? LTV, ACV, CAC, all the things that you've gotta be able to explain and say, hey, this is why We see it working, and this is what happens if you put money into our business to take it to this next level. And what you're using the numbers to to show is you're still doing a future story, right? Like so, I always think even at the later stages, you're still telling who you are as a founder. So you're telling that story because at the end of the day, we know the best companies are built by the best people. It's why we associate Airbnb with Brian Chesky. It's why we associate Bumble with Whitney Wolfe Hurd. It's why we associate Canva with Melanie Perkins because those are great founders. And so you still have to let them know that, but you're gonna tell your origin story. Then you're gonna tell the future vision story. And that future vision story is still painting the picture of the world that you're building cuz you're not there yet. If you're at Series A, Series B, there's still so much more that you have to get right to get to an IPO, to get to an exit, to get to that future. And so you still want to say and paint that of where you're going to end up, but then you have to come back and say, oh, and here's where we've been at and here's how we know it's working so that the investor can say, okay, I see the world you're talking about and oh, you're— it's actually happening right now. And then what the founder needs to be able to do is say, the money that I'm asking you to give me, the capital that we need, is so that we can pour gasoline on what's already been working so we can get to that big future. And the reason why I say to do it this way is future and then go back to it's working is if an investor already knows what the end goal should look like, and then you come and say, here's all the data points that show us that we're on the right path, they're going to be able to actually fill in that gap in between and say, oh, I understand why my money is going to be able to help you do A, B, and C to get to that goal. Instead of trying to walk them from here's where we're at, here's why we need your money, here's what we're going to do, and this gets us to the finish line. It actually doesn't work nearly as well from a psychological perspective, which is why I say the order, the structure really matters, especially when you get to that later stage. Yeah, I love that.

It's— I don't know, the visual I have is like if, if your business is like a boat that's starting at one port by telling an investor the island you're going to and they can truly see that, and they see your business is starting to move towards there and you're basically asking them to be the wind at your sails. They understand what that wind is actually pushing you towards.

Beautiful, beautiful analogy right there. I love, I love that you went that direction.

Yeah, man, I love that. Okay, so let's talk. You talked about what a good pitch and a good story, irrespective of stage, looks like. Let's talk about some of the biggest mistakes you've seen when, when founders really botch pitches. What are the most common things you're seeing in what they're saying or what they're sharing?

A couple things. One is a lot of founders make the mistake of not sharing anything about who they are, both as a person and as a founder, which I think is one of the biggest mistakes that we see. A lot of founders think that investors only care about the business side of a founder. And the reality is, I want to know also the things about who you are as a person. Investors want to know that. We can learn a lot about someone if they were a competitive gamer growing up. We can learn a lot about someone if they did debate. We can learn a lot about someone if they're an immigrant and they speak 5 languages. Like, we can learn a lot about whether or not they're gonna succeed based on who they are as a person, even if it's not directly business related. So I think a lot of founders make the mistake of thinking investors don't care about anything about who I am. I just wanna focus on business. And what that does is it puts the investor into the logical brain side because all it is now is a business transaction. And a business transaction is gonna be much harder to prove because they're seeing so many business transactions. In business transactions, you look for red flags. When we like somebody, when we believe in them, when we connect to them, we look for green flags. We look for reasons to say yes. That's just human nature. And so that, that's kind of piece one. Piece 2 is founders are very proud of their products. They're very proud of the tech, and that is wonderful, and they should be. That's why you're building it. But the product and the tech don't speak for themselves. And so a lot of founders will think, well, we have a great product and we've built a really great product and we have a great product team, so you should invest in us so we can keep developing the product. And it's like, okay, but, but why are people gonna want to use this? And how are you gonna recruit salespeople onto your team if like you're just like, the product sells itself and you fall into this trap of, of thinking the product or the tech sells itself. And one of the things that Steve Jobs was so great at was Yeah, they— Apple built nice tech, but he was a great salesperson on stage. And, and that's really what you— you've got to be able to blend that and say, hey, I love the product, I love the tech, but I'm going to put it into language that is normal human speak, if you will. So that's the second one. And the third one I'll say is founders tend to fall into kind of 2 camps when they get things wrong in the story. They're either too weak when talking to investors especially, or they're too aggressive. And you really need like a Goldilocks zone here. You need this perfect kind of bit. So if a founder gets asked a tough question, many of them will just crumble and they'll be like, oh, you're right, Alex, that's a great point. We really should do it that way. It's like no investor wants to hear just, oh yeah, you're right, I'll just do it your way after like the first pushback. That's too weak. And that's where founders think, oh, well, the investor knows more than me. The reality is the founder is the expert in the room. They're devoting their life to this thing. So the founder has to realize that they are the expert in the room. Now, the problem is that can go too far to the other side. And this is where founders can come off as assholes, right? And they're like, I don't care what you have to say. I know more than you. And no investor wants to hear that because an investor does want a founder who's coachable and listens to advice. And so what I've actually come up with is this idea of what I call approachable expertise. And it's a tone that you want to deliver where it's like, hey, I know what I'm talking about. But Alex, like, if you have pushback, let's have the conversation. Let's, let's have a discussion about it and see where we come out. I'm not going to just back down because I think I'm right. That's why I'm saying my position. But I want to listen to you and I want you to test me. And if I'm wrong, I will make that acknowledgment after that discussion. So we want to make sure that we're in that Goldilocks zone of approachable expertise instead of falling into weak or aggressive.

I love that. And there's— I was taking voracious notes as you were talking through things because there are, I think, so many kind of key lessons in what you shared there. The first is, as you were sharing, like investors care about your story and actually it's the place for you to differentiate yourself when there— when there is so much kind of commoditization across business transaction. And what it reminds me of is there's this guy, Delian, who started Varda Space. Right. And What I always think about is the reason I'm so excited about the future for Varda beyond it just being like a crazy ambitious mission is not because Delian was like a partner at Founders Fund. It's actually a tweet that I remember of him putting out when everything going on with— was going on with Sam Bankman-Fried, where he put out a tweet that he used to be a competitive chess player and there was a tournament that he showed the standings of the leaderboard. Sam Bankman-Fried came in second place. He came in first. And, and to me, like him being a world-class chess player actually was more interesting to me than him being a partner at Founders Fund. And so I think what you shared is spot on. The second is you talk about the importance of storytelling and distribution beyond, right, just like great product. And I think Justin Kan has said this on Twitter where it's like first-time founders worry about product, second-time founders worry about distribution. And I think to your point, right, like this belief of build it and they will come is just a complete fallacy in the world of building business. And the third one that I'll just share on kind of what you talked about of this, like achieving this tone that straddles being a pushover with being arrogant, is it's— it reminds me of like, you know, Ray Dalio's entire thing on like an idea meritocracy. Where if you approach a conversation of like, you, all you care about is achieving the best ideas because those best ideas increase the probability of your business succeeding. If an investor knows that's how you're approaching things, you come from a place of being unemotional about holding on to what your current beliefs are.

It really is. It really is true. I mean, you have the best founders are just insatiable with their curiosity and they want to test and make sure that they're right.

Yep.

And the only way that you can do that, just you got to pressure test it, right? You want people holding the fire up to you. That's, you know, you don't create a sword by just putting the metal there, you know, the iron there one time, putting in the fire, taking it out and being done, right? That makes a really brittle sword. You actually have to go back and forth, back and forth, into the fire, out of the fire, into the fire, out of the fire, into the fire, out of the fire. That's what makes it so strong. And that's the same for the best founders. And investors understand that. And investors also, in my experience, want founders who are willing to stand up for themselves and to push back because it's a, it's a microcosm of, of their experience as a CEO long term. Will you stand up to your team? Will you stand up to customers? Will you stand up to other investors? There's so many aspects that investors are looking into when it comes to a fundraising conversation that goes well beyond fundraising.

Another question for you is for founders or future founders that are listening to this today and they're wondering, okay, there's a lot of good stuff here, but if there was one or two specific things that I could do or implement today to improve the quality of my pitch or improve the probability that I'm able to raise money in the future, what would those one or two things be?

I'm going to give one that's super Just like specific and tactical. And this is one that is really challenging for people. It's how long should a story be? And I think a story, when you're telling the vision story, it should be about 3 minutes long. 3 minutes for anyone out there is about 600 words. It's a little bit less if you're speaking slower, but many founders tend to speak fast. So anywhere between 500 to 600 words is about 3 minutes. That's the first piece is like, that's very tactical. Don't build a story that's going to take you more time than that. And what you should do when you build that story is go through the process of practicing it, refining it, internalizing it so that you can say it no matter what's happening around you. So that's kind of piece one that I would say. And piece two is remember the frame that you're wanting an investor to be looking at the deal through. And it's this: what if I'm right? And what I find many founders try to do in investor calls is they try to prove to the investor that they're right. They're trying to make them say with 100% certainty, Robbie, you're right about the thing that you're saying in the future. And I tell founders, you can't know 100% what the future is going to look like because things are going to change. Things are going to happen. Right? And the example I always give is 2019, no one expected a global pandemic to shut down everything. So like, you did not know that was coming. You have to get an investor out of the 100%, I have to agree with you. And it's really hard for founders cuz they want an investor to validate them. But instead it's just, hey, what if I'm right? Like, what if the world that I'm talking about up here, and I'm saying that I can build this because I have the right background, I have the right team, we understand what we need to do. Like, what if I'm right about that? And I'm not saying that there's a 100% chance it's gonna come true. I'm saying that there's a 15% chance that we pull it off. Everything goes right and there's a 15% chance. But like, if I'm right about that, how big does that get? Like, how impactful is that company? And if you get an investor thinking through the, the lens of what if I'm right, that's how you get them thinking about, oh, this is the fund returner. This is the outlier inside of the fund because now they're just thinking about the biggest upside case instead of all of the downside risk. And that's really a big mindset shift for founders to go from, I've got to prove to them I'm right, to what if I'm right?

I love that. And I think also what it does is, you know, of course there's always a little bit of, a little bit of irrationality to founders. But at the end of the day, I think there's a level of respect that comes from investors when they know that you're living like on planet Earth when you're thinking about your business. And so I think that's a huge advantage as well. I have two more questions that just came up as you were saying things that you know should be quick. The first is, I would say a lot of founders feel very comfortable pitching investors, storytelling. They're more extroverted in nature, like potentially you know they're they're they are the founder who you know potentially is focusing more on sales in the early days, business development, etc. But let's just say you know you're looking at a founding team that doesn't have that person that is like. The extrovert's extrovert. I think a lot of kind of introverts or people who are more reserved in nature worry about like, is there one way to tell a story well? And it's very like, you know, it feels like, you know, a better version of the used car salesman. What would you say to people who are more reserved or introverted in nature and how they can still be really good storytellers and pitchers?

I've worked with a lot of founders. I mean, you know this, the founders I've worked with, We've raised $600 million so far in capital, and I'm gonna tell you right now, not a single one of them looks the same. They all communicate very differently. Some are very charismatic. It's effortless for them to carry on a conversation. Others are like way on, on the end of the spectrum, super technical, don't like talking to people. But what we do is we lean into those strengths. So we just create the training ground and we help them understand like, what is an investor looking for so that they understand the process, whether they're extroverted, introverted, anywhere on that spectrum. What's an investor looking for and how can you show up in that way to deliver it to them? And so the technical founders tend to be much more like, they kind of follow a program out in their head. They know that if they say this, then I say this. If they say this, then I say this. And it's like, that's great. Do that. For the ones who are more comfortable and at ease and flow, we're like, hey, just kind of like carry on a conversation, see where it goes. Don't be afraid to go down rabbit trails. Like you have that level of mastery of communication. Great. We do that with them. And the ones in between, we're like, hey, let's kind of blend. Let's blend these 2. So like on certain topics, you know that you can go a little bit off, you know, off the reservation and you'll be fine. But for other ones, we need you to stick really closely. So one way to do this is think about all the questions that are going to come up. Prepare answers ahead of time. Think about like all the storytelling pieces you need to have. Do the work ahead of time. There's a great— you know, Justin Micheloy, who is a good friend and the former speechwriter for General Petraeus and General Madison. He says preparation creates precision. And whether you're an extrovert or an introvert, if you prepare well for your communication strategy, It's going to come across effortlessly. And this is one of those tricks that people don't realize. The best impromptu speakers are never speaking impromptu. Do that. I love that.

Last question for you is, and this is tactical, for pre-seed or seed founders who are potentially creating their first deck that they're going to use for investors, I guess this is a 2-parter. One is like, how much should you be relying on your deck versus it? What should the relationship be between what you say and what's in your presentation? And also, is there a typical template you follow of number of slides and what goes kind of the sequence of them in your first investor presentation?

Decks are largely right, sector, stage, and founder specific. So if you're in gaming, that oftentimes is a much more powerful deck because you're visualizing a lot of what they're gonna see if they were playing the game. If it's, you know, some sort of like deep tech or healthcare thing, like the deck is gonna be very different. It's gonna be more scientific and dry. I had one that was quantum computing. That deck is gonna look very different than these others. So realize there isn't really a standard that I would say, and that's actually one of the things that I would caution founders is don't go through generic advice because you need to really think about what yours is. The way that I think about decks though, are they are— they're a tool. They're a tool to help you clarify your thinking. They are also a tool to help investors dig in further to figure out what questions they want to ask you in especially a second meeting. I really like founders to be able to share the story and be able to lead a conversation without having to rely on the deck. Now, that takes a level of preparation to get to that point, but I think that founders who are out there raising capital and asking people to give them millions of dollars Or tens of millions of dollars should be at that level because you should take that responsibility seriously. And that means preparing. And, and I say this because if you meet an investor out at a coffee shop, you aren't gonna be able to pull up your deck to walk them through it. If you meet a perfect candidate for your CTO position, you're not gonna be able to say, hey, let me pull up my deck and walk you through it. You just have to have the conversation. If you're at New York Tech Week right now, you're not gonna be able to say, let me pull up my deck and walk you through it. You gotta be able to just tell the story. So what I like decks being is a tool to say, hey, here's some materials for you to review either beforehand or after our call so that you can dig in deeper. And part of this too, and this will be a slightly shameless plug, but you gotta let me do it, is that's partly what we're doing at Potential AI is, is not deck related, but it's how do founders build out their founder origin story and their startup vision story. And so we're using technology to enable those founders especially pre-seed and seed founders to build out that story so then they could take it to a deck designer and say, here's our story, can we put this into a deck format? And it's already concise and precise where it's going to be very easy to visualize it and bring it to life.

Love it. And just to that second part of the question, just to make sure there's clarity around that in terms of sequencing of the slides for a pre-seed or seed founder, is there a typical— like I know you mentioned the beginning when you were talking about like Series A or Series B, You like still going future first, like future first and then coming back to the present. So you create kind of a sense of destination for early stage businesses. Is there a sequence you like or no?

I mean, problems— problem solution is pretty classic. That's an easy one, especially if you're having to educate someone on the problem. If the problem is pretty well known, then oftentimes I like more of a strategic narrative approach, which is here's what the new world looks like and here's the current world that we're living in. That starts with what the new world is going to be, and you name that. And then you go back and you say, here's the old world and this is why it's a problem and this is why we're perfectly set up to solve it. Those are generally 2 pretty good structures. They're different, but it depends on how well known the problem is. So if you're really tackling something that's, you know, a little bit more challenging to describe the problem where you really need them to feel that pain because maybe the investor doesn't understand it right out of the gate, dig into the problem and then go into solution, the why now, why us, all that normal stuff. But if it's something that people generally understand, then go more strategic narrative and show what the new world looks like. Come back to the old world and then show how you are bridging that transition from old world to new world. So those are 2 kind of pretty classic ones that I like to use, but the founder needs to figure out which bucket they fit into.

Love it. Robbie Crabtree, this was amazing and I think is gonna be a huge help in leveling up early-stage founders' ability. to storytell their business and raise capital. Thank you so much for joining Founders Journal.

Thanks, Alex.

This was great. I hope you enjoyed this episode of Founders Journal. If you like this new format where I curate world-class entrepreneurs and investors to answer the most important questions for early-stage entrepreneurs, shoot me an email to alex@morningbrew.com to suggest a future question or challenge that you want answered, or feel free to suggest a specific expert that you would love to see come on the podcast. As always, thanks for listening, and I'll catch you next episode.