Why "Simplicity Sells"

I was having a conversation the other day with a friend of mine who helps run a VC fund and works with a lot of capital placement deals.

He told me one of the biggest reasons the investors they work with don’t end up investing is they just don’t understand it.

They don’t get the market. They don’t get the solution. It’s all too fluffed up and complex.

If you are speaking with an investor group that has a background outside of your industry, you should be able to explain what your product does in one sentence understandable by a 6th grader.

Here’s a great template to use:

“We help {market} do {solution} without {common problem} or {status quo in industry}”.

“We help eCommerce brands increase customer lifetime value without relying on constant paid ads or heavy discounting.”
“We help manufacturers predict equipment failures before they happen without expensive IoT hardware or manual inspections.”

Transparently, this is usually the biggest problem that comes across for our clients when they speak with investor groups. Getting people to “get it”. 

This is what I mean when I am talking about building a story.

Can you create something that another person can understand thoroughly, get excited about, and want to put their hard earned capital behind?

The founders we see a lot of the time want to “dress up” their products and overcomplicate things to try and make them seem more intelligent when giving pitches.

When a lot of the time, it’s the other way around. You should over-simplify your product.

Make your projection numbers more believable and bearish, come up with an addressable TAM that actually reflects your near-term opportunity - not a moonshot scenario.

Investors aren’t testing how big your imagination is, they’re testing how grounded your judgment is.

When someone can instantly understand what you do, who it’s for, and why it matters now, you’ve already won half the battle.

The smartest founders know that simplicity sells - because it signals focus.

Just something to think about as you’re building out your story, speaking to investment groups, and refining your pitches.

Hope this is helpful - feel free to reply if you have any questions.

Have a great Friday,

Ryan
Breakout Capital Group