Explaining complex science or technology is no small task. As a founder, you probably know your product inside out. But the same can’t be said for potential investors.
If investors don’t know exactly what your product does or why it matters, they’ll move on. Investors won’t buy what they don’t understand, and they certainly won’t fund it.
The stakes are high, but the solution isn’t oversimplifying. It’s about communicating clearly and persuasively. In this article, learn how to bridge the gap and and effectively explain tech to investors.
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The Challenge: Different Understandings
What’s obvious to you can be overwhelming for others, especially when it comes to science and tech. Investors often lack the deep domain knowledge you have, and their days are packed with back-to-back pitches. Even the most innovative product can get lost in translation without clear communication.
Some things that could be working against you:
- Knowing Too Much: While you need to know your product inside out, you may tend to over-explain.
- Defaulting to Features: You focus on what your product does instead of why it matters.
- The Familiarity Bias: If they’ve heard similar pitches, your product might feel redundant, even if it’s not.
To overcome these challenges, you have to make the unique value of your tech crystal clear and fast.
Clarity + Innovation = Investment
Of course, investors won’t put their money into something they don’t understand. But it’s important to remember that investors also make decisions as much with their gut as their head.
If you don’t communicate your pitch in a way that strikes a chord, it’s over. In fact, 67% of VCs prioritise a founder’s ability to execute their vision above all else.
Clarity is essential, but what moves the needle is making your potential investors feel like they’re betting on something transformative.
Triggering emotional engagment with your product results in:
- Differentiation: Your story rises above the noise.
- Urgency: Investors feel like they’ll miss out if they don’t act.
- Confidence: They believe in both the product and the team behind it.
Investors don’t need to be experts in your field. They just need to grasp why your product matters and how it will deliver returns.
6 Tips to Explain Tech to Investors
1. Speak Plainly and Use Visuals
Trade technical jargon for plain language. Aim for relatability over complexity.
- Illustrate your points: Use visuals like diagrams or animations to clarify complex ideas.
- Lean on analogies: Comparing your tech to familiar concepts makes it relatable. For example, “It’s like a GPS, but for supply chains.”
Example: Instead of “We use blockchain for supply chain transparency,” say, “You can trace every product, every step of the way”.
2. Don’t Simplify, Streamline
You need to make your product understandable. But instead of “dumbing it down” so it loses its edge, remove what doesn’t matter. To keep it concise, you can:
- Lead with the problem: Before you dive into features, outline the problem you’re solving in human terms.
- Compliment with contrast: Show what the world looks like without your product, then paint the picture of what changes with it.
Example: Don’t say, “We improve data processing speeds.” Say, “Right now, companies waste 40% of their time waiting for outdated systems to crunch data. We cut that to seconds.”
3. Use Data, But Keep It Interesting
Investors need evidence, but they don’t want to wade through pages of reports. A snapshot of your data in action can be much more effective.
- Focus on movement: Show progression over time rather than static figures.
- Link metrics to meaning: Explain what your product’s performance enables.
Example: Instead of, “We’ve seen a 200% ROI for our clients,” say, “One client used our tool to increase sales by €500K, which they reinvested into doubling their R&D team.”
4. Embed Micro-Visuals
To really grab attention, go beyond static charts or demo reels. Show, don’t tell.
- Use micro-moments: These are 5-10 second visual snippets demonstrating specific outcomes (e.g., a before-and-after simulation).
- Layer your visuals: Combine motion graphics with real-world footage to anchor abstract concepts in reality.
Example: A materials science company might show a time-lapse of their product surviving extreme stress tests, proving durability without saying a word.
5. Turn Risks Into Catalysts
Investors will inevitably question risks. But you can reframe these risks as opportunities to impress.
- Own the challenge: Acknowledge potential hurdles and show how you’re prepared to overcome them.
- Leverage scarcity: If your innovation’s risky because it’s new, highlight how early adoption creates a competitive edge.
Example: Instead of downplaying regulatory hurdles, position them as a moat: “We’re already ahead of upcoming standards, giving us a two-year advantage over competitors.”
6. Show Team Synergy, Not Just Expertise
Your pitch to investors should be about the product as well as the people building it.
- Highlight collaboration: Show how your team’s diverse expertise creates a unique advantage.
- Demonstrate adaptability: Share an example of how your team solved a complex challenge together.
Example: Instead of listing credentials, describe how your lead engineer and marketing head collaborated to identify a critical product-market fit insight.
Final Thoughts – How to Explain Tech to Investors
To win the backing of investors, your pitch needs to go beyond explanation. It must inspire belief in your vision and confidence in your ability to deliver.
The secret to achieving investment is embracing storytelling that prioritises resonance over detail. Make investors see the world through your eyes and make them want to be part of building it.
If your pitch isn’t there yet, it’s time to rethink how you’re telling your story.
Need help perfecting your pitch?
Waking Dreams Media can help – get in touch today.
