Speaking to Investors at the Behest of Ancient Instruction

Businesses are built on ideas, and these ideas, if represented poorly, can spiral into silence marked by the ‘investor pass over’. This phenomenon becomes disconcerting when one realises the solution to engaging investors is not only dependent of the founder’s logical reasoning but rather is dependent on the founder’s methods of persuasion. The untold deaths of good ideas that have succumbed to poor powers of persuasion is too regular an occurrence to ignore. Although we are encompassed by a multitude of ‘communication experts, sales mentors and marketing gurus’ who claim to have the answers, deeper research reveals the cornerstone of communicative arts trace back to the philosophers of Ancient Greece.

Ineffective communication, a serial killer of good ideas…

Before our historical retrieval, I want to relay what I’ve deduced firsthand in dealing with startups raising capital amongst a variety of sectors and stages. After witnessing founders hit center – stage with nothing more than a pitch – deck and an idea, you come to realise that in order to raise capital, you must hit these 3 benchmarks:

  1. Commercial viability
  2. Access to relevant investors
  3. Effective communication

The first is a matter for the founder, and the founder alone, they must build their thesis on science and reason to demonstrate both the technical and commercial viability of their venture.

The second is a matter of network as well as reach, persistence and budget.

The third, effective communication, is a pillar by which individuals can improve upon by simply heightening their level of audience awareness and reviewing the fundamentals of persuasion we so often forget.

There is no form of injustice quite like that of a good idea undergoing death by way of miscommunication. Research has demonstrated the consequences of this effect at the highest levels of commerce with the Holmes Report (A newsletter by the PR Media conglomerate) releasing the revelatory statistic that over a 5-year period, companies led by effective communicators had 47% higher total returns to shareholders
compared to those led by those with poor communication skills.

Communication between an investor and founder is a contention of opposing views, not small talk, and pleasantries…

Communication is a broad term, encompassing several disciplines. We must therefore identify the discipline most prevalent in communication between investors and founders during a capital raise. The answer – discourse.

If we can look beyond the belligerent nature of the term “discourse”, plainly put, it is the communicative act of exchanging viewpoints and ideas with the ultimate goal of arriving at an agreed upon truth between two parties.

The dynamic between investors and founders often takes this form, with the founder having built a well thought out argument based on knowledge and logic and the investor needing to be convinced of the idea’s commercial viability, culminating to a transaction (truth) that both parties agree upon.

In order to master the art of discourse, or at least begin the journey to mastery, we’ll first need to understand its history, there we’ll find those who unveiled the key elements of discourse, and therefore learn from the rightful authorities on the topic.

Discourse as an art…

The art of discourse was first taught in Ancient Greece as the convergence of the following three skills:

Grammar – the mechanics of language, using symbols to express thought.

Logic – the mechanics of thought analysis and composition of arguments.

Rhetoric – the mechanics of communicating thoughts from one mind to another.

When it comes to grammar, most of us already display competence as modern education empowers us with fluency in both the verbal and written communicative symbols – the English language. Logic, the ability to form an argument and the process by which we acquire knowledge is also a component that modern presenters are well versed in. It’s the use of rhetoric (the art of persuasive speaking or writing) that is often overlooked.

The topic of rhetoric was the subject of much debate. Its use was controversial but its utility in persuasion is undoubtedly effective. Aristotle, a major proponent of rhetoric, outlined the composition of the art form via his famous collection of thoughts ‘The Art of Rhetoric’.

This self–help book on persuasion dated back to 4th century BC. In simple terms, the philosopher divided rhetoric into 3 distinct modes of persuasion – logos (logical reasoning), ethos (establishment of credibility), and pathos (understanding of emotions). Persuasion, according to The Art of Rhetoric does not depend on one of these elements, but rather the careful balance of all three, a principle we often abandon.

“There are, then, these three means of effecting persuasion. The man who is to be in command of them must, it is clear, be able (1) to reason logically, (2) to understand human character and goodness in their various forms, and (3) to understand the emotions”

What fascinates me is that 2000+ years later science confirmed the philosopher’s observations

1. A multitude of studies were conducted in the field of “decision theory”  which undoubtedly demonstrates that emotion is in fact the dominant drive in decision making.

2. The infamous Milgram experiment shocked the world into understanding the power of “Obedience to Authority”



3. Cognitive scientific research has demonstrated the power of logical reasoning and its utility in justifying our beliefs and actions to others.

So, with philosophy and science in agreement on the need to fortify these three pillars of persuasion:

Why do we still remain ignorant?

Why do so many presentations fall short?

Why is the truth lost as a consequence?

The reality is, for many of us, the components of rhetoric such as invoking emotion, establishing credibility, and the demonstration of logic, are complex instruments of persuasion. Subsequently, presenters often overcompensate on one of these modes and underutilise another. Some depend on logic alone, with the notion that talking with reason is enough, on the opposite end others present with too much emotion
and lack both depth and substance. Luckily, Aristotle realised this, and in turn, worked to delineate the three modes to a level that any individual could grasp.

“Rhetoric was a teachable skill, that it could, usually in return for a fee, be passed from one skilled performer on to others, who might thereby achieve successes in their practical life that would otherwise have eluded them.” – Aristotle, The Art of Rhetoric


Although facts matter, a persuasive argument is not just a matter of facts…

As mentioned, Aristotle distills rhetoric, the ability to persuade, down to three ‘modes of persuasion’ – Logos, Pathos and Ethos, with a relationship best

represented by a triangular interdependence, now commonly referred to as the rhetorical triangle. What we’ll aim to achieve in the coming section is to translate these modes of persuasion into modern terms, and from there provide techniques that you can employ in order to fortify each one.

Starting with Ethos, an element that conveys the fundamental need to build a platform of authority /credibility before undertaking the act of persuasion. The utility of this device lies in its ability to ensure the mind of the audience is open to receiving the forthcoming communication from the orator/writer.

Breaking down this mode of persuasion further we see a composition of three building blocks, authority, credibility and trust. All of which, if the right techniques are employed, correctly form the Ethos of the speaker. The techniques mentioned include the following:

  • Illustrating the level of knowledge/awareness one has of the topic at hand, can be achieved by exhibiting your consideration of multiple viewpoints, sources of information and expertise when forming a thesis.
  • Demonstrate your mastery, which is usually best achieved by outlining the pathway of acquisition for said knowledge – your experience.

AirBnB ensuring the audience was fully aware of the depth of experience and commercial acumen the team had. Signifying two things:

  1. The expertise to grow
  2. The ability to attract top talent

Next is Pathos, employing the aforementioned powers of emotion. Achieving pathos is a matter of drawing empathy from your audience by appealing to their values, emotions and imaginations.

“Understand emotions – that is to name them and describe them, to know their causes and the way in which they are excited” – Aristotle, The Art of Rhetoric

Expansive research has demonstrated the power of both positive and negative emotions when forming the mental framework used to make a decision. Despite its obvious utility, the use of emotions is often overlooked, it’s often not in the nature of the presenter to invoke such emotions, and even if there was a will to do so, the execution is often marked with deliberation and a lack of subtlety.

So, how do we intersperse Pathos throughout a presentation, with subtlety?

  • Storytelling – The audience want to know that the presenter has perhaps entered the unknown, overcome challenges and returned with a new piece of information – a hero’s journey. This is best achieved in the business world by describing how one stumbles upon a problem and worked to find the solution, or, outlining the severity of the problem, its consequences and how they relate to the audience.
  • Descriptive use of language – Descriptive language involves the use of adjectives, adverbs, similes and metaphors that add an element of prose to your writing/speech. Note, it should be used with caution, and only to illustrate the imaginations of your audience or to add colour to a sentiment you are trying to convey.
  • Humour – Humour has the ability to invoke instantaneous positive emotion amongst an audience, but exercise it with caution. In other words, test the joke, it may not be funny and a joke followed by a feeling of awkwardness may be antithetical in the result.
  • MDA’s – This is a personal favorite of mine and definitely an under utilised practice. MDA, an acronym for minor damaging admissions, honesty, with the intent of minor dents in the hubris of the presenter. This works extremely well in building trust, and shows the audience you are honest enough to admit faults. This is best achieved in a presentation by detailing risks associated with your venture, BUT following on with mitigations you’ve taken to offset said risks.

With research leaning towards the conclusion that we tend to make decisions on the heels of horror, it can be expected to be exploited. However, sometimes problems that boast enough severity justify the incitement of fear – just make sure you, the bearer of bad news, also holds the key to the solution…

A business leader who does this best is Elon Musk, who despite his engineering mindset, and enigmatic ways, often arouses the emotions of the audience by exuding passion, inciting fear and offering a way out:

Elon Musk’s Emotional and Inspiring Speech at SXSW (2018)


Persuasion built on the truth will always trump persuasion built on emptiness. The key, therefore, is to firstly appear at the truth via unbiased investigation. From there, illustrate the path to the knowledge you have paved for the audience you wish to persuade. That way they can also arrive at your conclusion using a combination of the crumb trail you’ve left and their own powers of logical deduction. This is employing
the rhetorical tool of logos.

Bearing in mind, your audience in the capital raising arena, investors, are fundamentally rational people…which techniques can one employ in an effort to deliver the substance investors crave throughout your message?

  • Studies – The use of research, citing scientific studies which demonstrate evidence behind a theory. For example, as an individual building a software platform for the mitigation of time and cost overruns, you may want to present case – studies which show, in numbers, the effect of said software.
  • Historical Evidence – When exhibiting the problem, you are looking to solve, an effective way of conveying its severity is by presenting news articles of days past related to the issue at hand. This not only shows the issue’s authenticity, it also shows it was newsworthy and therefore relevant to many.
  • Easy–to–follow Rationality – Despite my lack of a better term, I was obliged to add this in. Referring to the presentation of your business plan. The best example of this would be a justification of numbers. For example, not only outlining what your venture expects to generate (revenue) over the next 12 months, but also adding substance by delineating the milestones you are looking to achieve in order to attain those numbers. In doing so, what seems to be ‘empty speak’ or ‘purely speculative’ is fortified with reasonable and value–adding actions.
  • Statistics – Whether it be in the form of market potential or the efficacy of a new vaccine, data represented by numbers is always an effective way to establish concrete understanding.

Three distinct divisions of persuasion, the culmination of which construct an indominable framework for any argument, and a well – worn path to success in discourse. The philosopher encouraged all to learn these fundamentals of persuasion, and noted that a lack of rhetorical knowledge could lead to missed opportunities, with affirmation.

An athletic mind to sharpen the tongue…

Aristotle wrote this treatise after careful observation of the techniques used by those present and past to himself, which indicates that we may be inherently persuasive when it’s called upon. What this great mind achieved via The Art of Rhetoric was a well-articulated prescription to keep us on track, much like an athlete can fall out of form, so too can we, by way of brevity or laziness diverge towards our duller forms of communication.

So, whether it be a team meeting, an announcement to your shareholders, or our main concern, raising capital from investors, as founders you should remain cognizant of these more effective tools of persuasion and presentation.

As trailblazers in your respective industries, your duty transcends the success of your product/service, it entails a responsibility to construct the knowledge and encourage the admiration of your invention from outsiders. Ensure the elements of persuasion are interspersed throughout your communications, and you may begin to find that there are more willing participants in your journey than once assumed.

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